A concentration in the economics department aims to enable undergraduates to explore the field of value investing through a specialized curriculum.
Students must apply to join the concentration, which allows them to take three courses that focus on value investing through fall and winter quarter. The concentration, which is in a three year pilot phase, accepts a maximum of 40 students every academic year. Students apply in spring quarter, typically in their second year, and start in the fall quarter of the next academic year, said Humberto Merino-Hernández, the founding manager of the concentration.
Merino-Hernández, a Riordan MBA Fellow at the UCLA Anderson School of Management, said he and the other founders developed the idea of a value investing concentration in December 2017. The program officially began in February 2018.
Since then, the concentration has given students access to smaller class sizes and opportunities to interact with investment firms.
William Simon, one of the program’s co-founders and a law and economics professor, said that although the concentration aims to introduce students to investing as a whole, the concentration places emphasis on value investing, a school of investing founded by Columbia Business School professor Ben Graham in the 1930s.
“The idea that (Graham) set forth is that it is possible to purchase securities that are selling for less than their true value … It’s somewhat of a science and somewhat of an art to determine what is true value,” Simon said.
Merino-Hernández said courses in the concentration have a lower student-to-faculty ratio than other economics courses.
“(The economics major) is a very impacted major, where not a lot of students get that individualized support. What a concentration allows us to do is reduce the class sizes,” Merino-Hernández said. “Some classes have upwards of 200 students, while the (concentration’s courses have) a maximum of 40.”
Merino-Hernández said smaller class sizes would not only help students academically, but professionally as well.
He added that although the lessons taught in the value investing concentration were based on finance, accounting and economics, many of the courses’ underlying lessons taught students soft skills necessary for their careers.
“(The concentration focuses on) things like picking your partners for business and relationships … We talk about things like ‘a circle of competence,’ like focusing on one or two things rather than spreading yourself thin across a bunch of topics and career paths.” Merino-Hernández said.
The concentration is launching a new course called “Field Projects in Investing” this quarter, which groups students into teams to work with an investment company.
Students’ main objective in the course is to execute a research project for a real company, Merino-Hernández said.
“You can think about it as a senior thesis, where the students are working under a professor, but instead of that, they’re working under an actual investment company where they flesh out an investment idea over the course of a quarter,” Merino-Hernández said.
“Field Projects in Investing” is a component of the Simon Fellowship, a program that allows students in the concentration to continue with their specialized coursework for another year.
He said the concentration program aims to add Chartered Financial Analyst exam preparation to the Simon Fellowship’s curriculum as well. This would allow the concentration to sponsor students who are interested in taking the CFA exam by waiving their exam fees.
Merino-Hernández said the economics department plans to offer more concentrations in the future and model them after the structure of the value investing concentration if the pilot program is successful.
“Once the pilot phase ends, which would be Fall 2021, then we would expand our model that we’ve created into the other concentrations like entrepreneurship, wealth management and technology, and so on.” Merino-Hernández said.
Simon said although the concentration focuses on investing, it could help prepare students for careers in other fields as well.
“Another group of careers students may decide that they wish to be in would be investment banking … When you invest, you have to understand the particular business that you’re looking at,” Simon said. “As an investment banker, you also have to understand the business that you’re looking at, but rather than investing money, an investment banker provides advice.”
Several students said the concentration has enabled them to develop professional skills they can apply directly to their future careers.
Michael Mapes, a third-year business economics student, said that as someone who always wanted to go into finance, the first course at UCLA where he felt he learned something of tangible value was one of the courses in the concentration.
“We learned everything from Buffett to Graham,” Mapes said. “It really got me excited for a potential future in finance.”
Angela Chen, fourth-year business economics and German student, said although the content of the concentration didn’t exactly align with her career aspirations, she thinks it fosters a beneficial environment for her career development.
“What I found really valuable is to be able to be in the concentration and study alongside a lot of people who have similar goals as me … I think the connections with those students in the concentration as well as some of the guest speakers will be very beneficial to me down the road,” Chen said.
Allison Walker, a fourth-year economics student, said the value investing concentration’s key benefit lies in the fact that its material had real world applications.
“I was learning stuff that was really relevant to a lot of work in the real world,” Walker said. “(The Economics major is) a lot more theoretical, so sometimes it doesn’t directly apply to a lot of the jobs that we’ll be working in right after graduation.”
Walker said she hopes the value investing concentration will continue to expand and offer opportunities to more students.
“Although it is a smaller program right now, the more students that get involved, the more (that) would enjoy and get a lot out of it,” Walker said.