Senior Charles Najda’s experience at Stanford’s student-run investment fund has been full of ups and downs. Of course, so has the stock market. When Najda arrived as a freshman in 1999, the Blyth Fund’s two largest holdings were Sun Microsystems and Cisco. By the end of his freshman year, the market’s downward slide had begun, and the student investors had started a deliberate rotation out of tech stocks.
“We sold Cisco at $26, which was still a relatively high price,” remembers Najda, now the fund’s co-president. (At press time, it was trading at $13.) “It was a difficult situation because analyst estimates were still saying that $26 price was reasonable. It showed a great deal of foresight.”
The students began buying industrials and oil stocks, including Alcoa and Apache. Today, the fund relies heavily on comparatively stable holdings like Johnson & Johnson, which is up 17 percent since the students purchased it in 2001.
The fund began in 1978 when a colleague of investment banker Charles Blyth gave $75,000 to each of three California colleges to allow undergraduates to try their hand at investing. A typical example might be John Fogelsong, ’05, who entered Stanford with an interest in investing and worked his way up through the fund’s training program to serve as co-president this year. Fogelsong, Najda and two other directors choose stocks based on recommendations made by the broader membership of 15 in semiweekly meetings. Dividends are reinvested, so the only reward is bragging rights.
And those aren’t exactly guaranteed, these days. The fund now has about $72,000, down from approximately $130,000 at its peak. But due to a timely investment in Sonus Networks, the fund was up 25.63 percent in the first quarter of 2003—far outpacing the major indexes.
