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Photo by Sam Harrel

Photo by Sam Harrel

Photo by Sam Harrel

Photo by Sam Harrel

FAIRBANKS — Thomas Fatica has a daily ritual that sets him apart from most of his classmates at the University of Alaska Fairbanks. Soon after waking up each morning, the senior finance major takes some time to see how his stocks are weathering the worst economic stretch since the Great Depression.

Fatica’s habit is well-earned. For the past two semesters, he’s been part of the UAF Student Investment Fund class, a group of about a dozen students in charge of more than $400,000 worth of University of Alaska investments.

“It’s been hectic and stressful,” Fatica said. “Things are so uncertain.”

The decisions he and others in the School of Management class make could cost the UA Foundation thousands of dollars. And, to add a bit more pressure, they’ve been playing the market at a time that would make even a seasoned investor queasy.

The high-pressure learning environment is something associate finance professor Craig Wisen enjoys.

“This is a fun class to teach — it really is,” Wisen said. “It’s not like Jerry Springer, but it gets emotional and has its ups and downs.”

The fund was launched in 1991, when the UA Foundation offered a $100,000 grant.

During the past 18 years, Wisen said the investments made by students in the class keep pace with the S&P 500 and are above-average performers even compared to professionally run mutual funds. The UA Foundation has the option of withdrawing from the Student Investment Fund to pay for scholarships, but it’s performed well enough to go untouched.

The process for investing in the fund is rigorous. Students make detailed presentations during each class period, offering proposals on what stocks to buy and what should be dumped to make room for them. The whole class votes on whether the stock should be acquired.

The only prerequisite for the Student Investment Fund class is an introductory finance course, but Wisen doesn’t necessarily view the students’ lack of experience as a negative. The students are more likely to take a chance on new projects, and a handful have gone on to jobs with hedge funds and investment firms.

Wisen has the power to veto trades that seem particularly foolish, but he said he’s never used it.

The portfolio consists of about 40 securities, made up of companies the students have hand-picked for their potential and performance. Possible targets during Tuesday’s class included an old standby, Campbell’s Soup, and Ansys, a technology company.

“It’s real time and real money,” said Derek Miller, a graduate student in business administration. “It is a little intimidating making a recommendation up there.”

To add to the pressure, the student managers have been on a rough ride during the past decade.

At the height of the tech-fueled economic boom, the fund doubled in 1999 and was worth more than $640,000. The students’ accomplishment was enough to garner recognition from the Alaska Legislature and attract coverage from CNN’s financial show, “In the Money.”

But Wisen said the class got pounded during the collapse of the tech bubble in 2000, watching as the fund lost 45 percent of its value. “That lesson was imparted on a lot of people, not just us,” he said.

The past year has been particularly rough on students in the class, who watched their picks collapse along with the rest of the global economy. By February the fund had lost about 30 percent of its value, bottoming out at a value of about $330,000.

They’ve been rewarded with a steady stock-market recovery in 2009. As of Tuesday, the fund was up 21.8 percent for this year to about $435,000 — a slightly better performance than the S&P 500 has achieved as a whole.

In many respects, Wisen said, the volatile market has been a valuable teacher. The Student Investment Fund is less than 1 percent of the UA Foundation’s endowment, but it’s in an area that’s dedicated to stocks. Fund managers must pursue those investments even during hard times.

“You have to go back to 1929 to see something like this — none of the students have been through such horrible times before,” he said. “It’s very tough to invest in something right now.”

Einar Often, an economics student in the class, said the class has also taught him that investing the UA Foundation’s money is more stressful than making a personal investment.

His reasoning is one that most fund managers probably could appreciate.

“Your (own) money, it doesn’t matter — all the people in this class are going to be rich anyway,” Often said, drawing laughs from his classmates. “If you lose other people’s money, you could get fired.”