THE CATALYST: Blake Goodner ’96 believes he’s gained much from his Duke experience. As a cofounder of the investment company Bridger Capital, he also has gained financial expertise, including hedge-fund analysis. A class designed to “provide current Duke students with a real-world Wall Street experience” would be “a powerful and enduring way to give back,” he says. After making his intention known, he connected with associate professor of economics Emma Rasiel, and they fashioned the equity analysis class, which they co-teach. Goodner joins the class from New York by videoconference every second week. “It makes for a broader student experience,” says Rasiel of the co-teaching format. “The students hear and are reminded that there isn’t a right answer all the time. There’s more than one way.”
THE GIST: Ten students—who must apply for the one-day-a-week, two-and-a-half-hour class—work in pairs and come up with reports that give “buy” or “sell” recommendations for companies, ranging from Starbucks to Western Union. “Typically, I look for a mix of potential world-beater companies that most people know, high-growth companies where there may be a debate about the sustainability of the growth, and value companies that may recently have struggled and/or are in turnaround mode,” Goodner says. Students evaluate two companies during the semester.
THE TWIST: The research teams must find an angle on the company that gives heft to their recommendation. “It’s very deep-dive digging into the nuts and bolts of how companies work,” says Rasiel. “We try to see what we can identify that others haven’t.” So, students must push themselves to find creative analytical approaches. Last spring, for instance, one team compared under Armour athletic wear to Nike athletic wear by polling 100 Duke athletes about the quality of UA’s apparel, its wicking qualities versus Nike’s products, its brand image, and whether the company’s focus on lacrosse teams has paid off. Goodner grills each team on its investment theses, just as would happen in the real world; the class votes on the strongest presentation. “They’ve got to prove their story is a good one,” says Rasiel.
ASSIGNMENT LIST: Author Michael Lewis’ acclaimed work The Big Short is required reading, punctuating the course’s emphasis on experience beyond the usual classroom. “It’s one of the more insightful books about the credit crisis that led to the economic downturn in 2008, from which our economy is still recovering,” says Rasiel. “The other books on the reading list are primarily about hedge funds, but one cannot fully understand the hedge-fund industry without putting it in the perspective of the overall economic environment.”
WHAT YOU MISSED: Perhaps some good investor information. After their time in the class is long over, students watch the stock market and talk with Goodner about the prescience of their research. “Teaching this class has been reinvigorating in many ways for me and has provided me with fresh perspectives on some stocks I thought I already knew well,” says Goodner. “The Duke students use social media in ways I hadn’t imagined, which in some cases has provided very unique investment insights.”