On Oct. 26, Gerard Cassidy addressed the weekly Student Portfolio Investment Fund (SPIFFY) meeting in Donald P. Corbett Hall (DPC) 115. SPIFFY is an extracurricular group that gives University of Maine students the opportunity to get real world investment experience.
Gerard Cassidy, a UMaine alumnus, is the director of equity research at Tucker Anthony Sutro Capital Markets, a subsidiary of the Royal Bank of Canada. Cassidy travels to firms to present his research to fund managers. This research aids fund managers in deciding what stocks to invest in.
His research led to the development of the Texas Ratio. The Texas Ratio was originally applied during the 1980s oil bust, but is still widely used today to predict likelihood of a loan failure.
Cassidy received a bachelor’s degree in accounting and finance from the University of Maine and a master’s degree in business administration from St. John’s University. His insights on markets are often featured in mainstream media outlets such as Forbes Magazine and The New York Times.
Most of SPIFFY’s operations occur inside UMaine’s state-of-the-art Capital Investments Lab, which Cassidy donated to the Maine Business School.
Students involved in SPIFFY have a portion of the University’s endowment money to invest. Investments are made based on group-wide efforts in research, with members ultimately voting on plans pitched during weekly meetings. UMaine’s SPIFFY started with $200,000 to invest in 1993. Today SPIFFY is worth just over $2.3 million.
Cassidy gave a summary of his background in investment with stories about hard work and humility. He stressed the importance of being passionate, even when the job becomes strenuous. Cassidy urged students to have soft skills such as writing, math and teamwork. He suggested only investing what one can afford to lose and following the trends of industries.
During the question–and–answer portion of his discussion, Cassidy weighed in on the outcome of the 2016 presidential election and its effect on the stock market. He attempted to remain neutral while still keeping investors’ best interests in mind, explaining that some of the taxes Trump wants to lower may allow for more corporations to produce products in the U.S. This increase in U.S manufacturing could provide more investment opportunities in the future, Cassidy said.
Cassidy also touched upon the relationship between the Wells Fargo scandal and the health of the banking industry as a whole. Cassidy claimed the scandal would not be a huge hit to the market. The health of the banking industry would depend on the decisions of the Federal Reserve. The Federal Reserve is a non-governmental institution that enacts monetary policy. It is monitored by congress and board members are chosen by the president.
Anthony Sementelli, a finance student and co-president of SPIFFY, discussed the advantages of membership.
“On any given day, you’ll find someone from SPIFFY in here [Capital Investments Lab] working on something. This is all real world experience, we’re using real money, it’s all student run. The experience you get from it you can’t get in a classroom,” Sementelli said.
Sementelli explained how pivotal Cassidy’s donation of the Capital Investments Lab was to SPIFFY’s operation. The lab provides student investors with nine monitors that stream Bloomberg data, which research and investment pitches are based on.
“I’m not really sure how they did it before they had this room, because it’s all we’ve known,” Sementelli said.