UC Irvine grad students get a shot at Wall Street

Marisa O’Neil

Some graduate students could soon be reaping the benefits of the

stock market without risking their own tuition money.

Students in the graduate school of management’s class of 2005 can

enter a contest to invest $300,000 of UCI trustee Chuck Martin’s

money for one year. Martin, also a Laguna Beach venture capitalist,

will split the gains down the middle with them if they do well.

If the students’ stocks tank, however, they only lose their $200

entry fee.

“It’s a great way to understand companies,” Martin said. “MBA

students get a lot of theory and a lot of concepts in the classroom,

but it’s like practicing marksmanship by shooting blanks. I thought

that firing live ammo would be a good way to learn.”

Martin, 67, will split $1.5 million among five teams of four or

five students. The students will form their own teams and then

research various companies and put together an investment proposal.

The project will be called Polaris Investment Lab.

Teams with the best research and best ideas, Martin said, will get

$300,000 to execute the plans on May 15. Doing the research and

finding worthwhile companies is the most important part of the

lesson, he said.

“The stock market provides a platform for them to learn about

companies,” Martin said. “It’s partly about investment, but it’s also

to learn what the attributes of really good companies are. Really

good companies have stocks you want to buy.”

For one year, the teams will hold on to their stocks -- no

day-trading allowed -- and see who makes the biggest gains. They will

meet monthly with Martin so he can evaluate their progress, something

that Jone Pearce, dean of the school, thinks the students will be

doing a lot of themselves.

“With real money at stake, it draws more of their attention in

evaluating companies from a financial point of view,” she said.

“They’ll learn about companies, how to evaluate if it’s a good

prospect, and learn from someone who’s very successful at doing

that.”

Martin has founded a variety of venture capital and investment

firms, including Enterprise Partners, Westar Capital and VentureLab

LLC. He retired three years ago but is a member of the UC Regent’s

Investment Committee.

“I don’t work in the financial industry,” said 30-year-old MBA

student Frank Chen, who plans to enter the contest. “It’s a good

introduction to analyze stocks and review and pick the proper stocks

for our portfolio. Plus, it’s a chance to meet Mr. Martin. I’ve heard

a lot of good things about him, so maybe I can learn about my own

investments.”

On May 15, 2005, the team with the biggest gains in its portfolio

will win up to $12,000 per student. The second-place team can win up

to $10,000, third place up to $8,000, fourth place up to $6,000 and

fifth place up to $4,000.

The contest’s end and prize comes just in time for the students --

they will be graduating and will likely have part of their $17,000

tuition to pay back.

“This is a chance to prove what I learned and do it on someone

else’s money,” said 28-year-old MBA student Marcelo Farjalla, who

plans to enter.

* MARISA O’NEIL covers education. She may be reached at (949)

574-4268 or by e-mail at marisa.oneil@latimes.com.