Cha-ching: Lafayette College investment club surpasses $1M

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As Word War II wound down, Major J.H. Tarbell returned from Europe to Easton with $3,000 in seed money to start an investment club.

Who would have guessed 75 years later that four-digit investment would have grown to $1 million?

The Lafayette College investment club portfolio surpassed the seven-digit mark in February, according to club president Noah Grossman. Grossman is among the 150 members of the student-run club.

For decades, Lafayette students have managed and grown the fund based on the principles of doing their homework and choosing long-term investment opportunities.

“We encourage pretty much all students to join regardless of how much they know about investing,” Grossman said. “You could be a freshman who knows nothing about the stock market or someone who runs their own portfolio. All are welcome.”

The club fund is part of the college endowment, Grossman said. The club is the oldest student-run investment club in the nation.

Tarbell received the initial $3,000 from grateful soldiers for whom he provided helpful financial advice. Many were afraid to invest, having grown up during the Great Depression. Tarbell wound up at Lafayette after the war, where he became a professor of finance.

Investment club members can pitch stocks to buy at the weekly Friday meetings. They need to speak intelligently about the company’s background, its officers, its strengths and weaknesses. Then the members decide whether to buy.

A new rule requires the club to consider whether companies value hiring diversity and environmental sustainability. There’s a faculty adviser, but he rarely needs to step in to help, according to club marketing director Jack Evans.

“What makes the club special is that it’s entirely student run,” Evans said. The portfolio includes stocks such as Apple, Microsoft, Caterpillar and IBM. The club invested in Amazon more than 10 years ago and rode it to the top of the market.

Reaching $1 million isn’t just a thrill for the members. It’s a thrill for former club members who have gone on to finance careers.

“We have alumni from all years following the portfolio. Someone who pitched a stock in 1999 can see we still have the stock in our portfolio. That’s a pride thing,” Evans said.

The group meets every Friday. All the proceeds stay in the club fund, although some dividends pay for trips to Wall Street and for pizza and soda for the meetings.

The club also invites guest speakers from major banks and financial institutions. There’s no financial benefit to being a member. It’s an informal opportunity to learn more about what might become a career for some students.

“People use the experience in job interviews. It’s a great networking opportunity,” Grossman said.

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Rudy Miller may be reached at rmiller@lehighvalleylive.com.