By talking fast, thinking faster, and displaying investment savvy, two Farmer School MBA students have scored well during their appearances on CNBC’s “Grade the Trade.” The Friday feature on the network’s daily Fast Money show gives MBA students from around the country 30 seconds to give their buy and sell recommendations based on a fictitious but plausible scenario provided by the Fast Money panel.
"Fast Money" host introduces David Spaccarelli.
"Fast Money" host introduces Eric Doan.
The student contestants are given their question two to three hours before appearing on the show via web camera.
On June 22, David Spaccarelli was challenged as to how he would respond to news that Russia and China had decided to build a natural gas pipeline between the two countries. “What are you buying, what are you selling, as this scenario unfolds?” panel members asked.
Spaccarelli's grade comes in.
Spaccarelli was ready to buy Gazprom, the largest producer of natural gas in Russia, and the large global aluminum producers like Alcoa and Alcan who would benefit from the low cost energy supply in China. He proposed to sell Peabody Coal, who was counting on coal exports to China for future growth, and large investors in LNG for China. His recommendations earned him an A- from the panel, but his grade was dropped to a B+ when he failed to correctly answer the follow-up Miami sports trivia question about Ron Harper.
On Aug. 3, MBA student Eric Doan appeared on “Grade the Trade.” His scenario: “Saddled with plunging prices on the mortgage-backed securities it owns, Bear Stearns agrees to be bought by a private equity firm at a discount to save the firm.” Eric had multiple recommendations driven from this major upset in the financial markets and tightening liquidity—selling major banks like Citi and Chase and also unloading companies that have an elevated stock price due to potential private equity plays like Hilton, since these deals may not happen. He was buying solid defensive stocks like Coke, Colgate, and Procter & Gamble, with an additional buy into technology with Cisco.
Doan gets the grade.
This time, there were no sidebar questions. Doan’s response earned him a B+ initially, but after the panel discussed it a bit more, they upped it to an A-. It was the highest grade given this night.
While the Fast Money appearances are great exposure for our new MBA Program, the big benefit is the experience the students gain with the real time pressure of analyzing and developing a quality answer to these challenging business scenarios according to MBA Program Director Brad Bays.
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