Inside USD

Head of the Class: MBA Student Wins National Stock Picking Competition

Wednesday, May 1, 2013

Daniel McAllister’s interest in stocks started when he was in middle school. His older brother convinced his parents to let him invest, so Daniel wanted to as well. The two bought stock in Sun Microsystems and did well until the bubble burst and then lost everything they had gained.

But the loss didn’t diminish his interest in stocks and this week the 28-year-old MBA student at USD was announced as the winner of the first-ever All-America Student Analyst Competition, sponsored by Institutional Investor magazine group and Mark My Media, a Stamford, Conn.-based firm that has built a sophisticated software platform to track portfolios.

McAllister beat out nearly 700 students from 34 colleges around the country in the competition that allowed undergraduate and graduate students to test their mettle against like-minded participants to develop the best simulated stock portfolios.

Concentrating on a mix of financial and health care stocks for the competition that ran from September 2012 through January 2013, McAllister finished highest overall, edging out second-place finisher Matthew Olfat of the University of Virginia. Other schools whose students performed well in the competition included MBA programs from the University of California at Berkeley, Cornell University and Fordham University.

McAllister, who was interviewed live on the popular “Fast Money” show on CNBC Tuesday, said he was surprised but pleased to come out on top. “I knew we were doing well but figured with so many other people that somebody would hit it big on a lucky guess and win. I guess my portfolio was just persistent.”

McAllister formerly worked as a financial analyst at Jack in the Box and is now a solution consultant at AXmentor, a privately held technology company.  A co-worker at Jack in the Box created a program based on specific metrics from which to make stock choices.

“Since it was a short-term competition I wanted to focus on companies that were more volatile,” McAllister said. “There was no reason to play it safe so we took all companies in the healthcare and financial sectors and applied our algorithm to those.”

Students in the competition started their portfolios with $100,000 each. The rankings were compiled across seven industry sectors and one general category, utilizing a proprietary six-factor algorithm developed by Mark My Media. The general category considered net benchmark outperformance, volatility, net exposure impact,  gross exposure impact, long alpha and short alpha. The industry sectors mirrored the categories used in Institutional Investor’s celebrated All-America Research Team ranking the top Wall Street equity analysts.

McAllister, who will graduate from USD’s MBA program in May, earned his undergraduate degree in finance and international business in 2007 from the Carlson School of Management at the University of Minnesota. Since then, his studies have shifted from finance to accounting, but he credited USD Professors Shreesh Deshpande and Thomas Copeland for helping him “to refocus on finance, which helped me prepare for this sort of analysis.”

A total of 10 MBA students from USD’s School of Business Administration participated in the contest and three of them, including McAllister, finished in the top 25. Wang Zhu finished 17th and Scott Shelly finished 21st.  Of  the top eight MBA finishers in the competition, three were from USD.

“This is a terrific accomplishment and we are really proud of Dan, Wang and Scott,” said Professor Manzur Rahman, associate dean and director of graduate programs in USD’s School of Business Administration. “To have not just one but three students in the top 25 speaks well of the high caliber of our students and faculty.”

– Liz Harman

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