Experiential learning program upgrade expands capabilities
There used to be a small room in the basement of the Albertson Building where students managed real capital, traded securities and derivatives on the market and reviewed analytics with the hopes of getting a large return.
Now, the students have moved upstairs.
Caden Fields-Brown | Argonaut
Barker Trading Program Director Terry Grieb works with a student in the new U.S. Bank Trading Room.
The Barker Capital Management and Trading Program, overseen by the College of Business and Economics, unveiled its new U.S. Bank Trading Room earlier this month on the second floor of the building. The upgraded facility is twice the size of the old trading room and has tripled the program’s capacity to involve students, moving from seven trading stations to 22.
“The room itself becomes a tool,” said Terry Grieb, Barker Trading program director. “With the multiple flat screens, Bloomberg terminal and really all of the technology at the students’ disposal, it gives them a chance to engage in experiential learning.”
The program trains students in trading and risk management and gives them the tools to manage portfolios with real capital, largely derived from an endowment set up by UI alumnus Rotchford “Rotchy” Barker, who after leaving UI became a successful commodities trader and a member of the Chicago Board of Trade.
Along with the new trading room, a 20-foot ticker tape was installed in the building, allowing students to gauge overall market sentiment at any moment. Grieb said a “market wall” was also placed outside of the new trading room, which is a touchscreen device allowing passersby to check the activity of the market in real time.
“I’ll walk by and see students using this,” Grieb said of the market wall.
The project was heavily supported by U.S. Bank, hence the room’s official name.
Grieb said a key component of the Barker Trading program is the fluidity of lecture material and practical training. He said he teaches program newcomers the three pillars of the trading side of finance — entrance, risk management and exit — through the management of advisory, group and individual portfolios.
Grieb said an advisory portfolio is one in which the students of the program work directly with a client to review a portfolio and offer advice, rather than making any changes to the portfolio themselves.
“The advisory portfolio that we’re working on this year that I’m really very excited about is an endowment held by the College of Natural Resources … dealing with forestry related securities,” Grieb said. “What we’re doing is developing a benchmark, so we’ve got an appropriate measure of what a portfolio like that should be doing in each tier — we’re figuring out what would be a fair percentage return for that portfolio.”
Grieb said there’s a team of six students working tirelessly on the advisory portfolio including a team leader, senior finance major Katelyn Weber, and five analysts. He said the team assessed the risk management of the portfolio and will present its final recommendation to a group of CNR students at the end of April.
“It’s Barker students working with students from the Natural Resources college, they’re the clients” Grieb said. “So there’s learning happening on both ends.”
Some students qualify to manage individual portfolios on their own, Grieb said, which he said he and another colleague oversee closely to ensure the “rules of engagement” for the particular portfolio are being met.
“Sometimes I’ll ask them, ‘Is that what you thought would happen?'” Grieb said. “They could say ‘Yes’ or ‘No,’ and if they say ‘No,’ that’s a valuable learning experience for them. No one likes to lose money.”
The primary group portfolio is run through the Barker Capital Management Group, Grieb said, which is a cohort of students within the Barker program enrolled in the course and receive one academic credit for participating.
He said the group works together to manage an endowment, the Barker Dangerfield Wealth Management LLC, where the proceeds actually support the Barker program’s expenses.
“It’s the proceeds from that portfolio that pay for the day-to-day operations of the program,” Grieb said. “We’ve got expenses, so we have to cover those expenses with the money we make from investing that part of endowment.”
Another element of the Barker program is its strengthening partnership with the College of Agricultural and Life Sciences (CALS).
According to Ekaterina Vorotnikova, associate director of risk management in the Barker program and agricultural economics professor, agricultural powerhouses CHS and CoBank also gifted funds to the Barker Trading program’s new trading room to encourage student training in the commodities market.
“When I was interviewing for this position, I thought the University of Idaho was very much ahead of the curve,” she said. “Many other universities have a traditional approach to agricultural economics and we here, have a direct collaboration with finance and we get students hands-on experience in trading and risk management.”
Vorotnikova said UI’s practical edge is imperative for the region because there are many producers and agricultural companies in the area looking for well-trained, qualified students to fill positions.
She said farming in Idaho is in need of trained graduates who can use the tools they gained from the Barker program and monetize on the knowledge they’ve gained of the market.
“You can lose your shirt in farming if you don’t risk manage,” she said. “That’s why this program is so important for this region.”
Although there are only two CALS students currently enrolled in the Barker Trading program, Vorotnikova said she expects CALS to take up a larger slice of the pie in the coming years.
“There are students in my classes now who have great interest in dairy and grain, and I think they’re wanting to apply for the program,” she said.
Grieb said students interested in the program must apply to be considered for the series of courses, seminars and labs, and the program accepts about 40-50 students annually.
Vorotnikova said she thinks the new trading room is going to be instrumental in moving the program forward.
“There’s merit in getting students away from the lecture based experience in the classroom and moving them toward a model in which traders would experience at a firm,” she said. “It’s a valuable move for us, certainly.”
Amber Emery can be reached at [email protected]