Investment Company Uses ODU Finance Lecturer’s Stock Market Model
June 13, 2019
Andrew Cohen
By Noell Saunders
Teaching students how to create portfolios that outperform the stock market using factor-based investment models so they can land jobs with some of the world's leading corporations is what Old Dominion finance lecturer Andrew Cohen knows best.
Cohen, who has a wealth of financial experience from a very successful Wall Street career, manages the University's Gregory A. Lumsden Trading Room and Research Lab. He recently launched an investment model called "systematic alpha" with Validea Capital Management, a national money management firm serving high net-worth individuals and institutions.
"Andrew's model is very unique in the sense that he selects the best stocks across 24 distinct industries," said Justin Carbonneau, a partner with Validea Capital Management. "He's a phenomenally innovative hard worker, and those are the type of characteristics that we look for when entering partnerships."
Cohen's model doesn't just focus on value or growth like traditional models. It looks at combinations of multiple types of factors and features such as volatility and sentiment that have produced robust results over time in his academic testing and research.
Using Bloomberg terminals, Cohen teaches concepts from "systematic alpha", along with factor-based stock selection methods, in classes to help students use unbiased quantitative strategies to create their own models for stock selection. Students analyze and evaluate many different types of factors and combinations to create portfolios and strategies that may be used in the real world, whether it be on Wall Street, at a hedge fund or even their own money management practices in the future. They also have to be able to clearly present the rationale behind every factor they choose and show strong empirical support and historical results.
"The important thing I teach my students is to find companies with good valuations and long-term viable business models that's going to continue to propel growth," Cohen said.
Armed with what they've learned in Cohen's classes, students are securing internships and careers at well-known financial organizations like JP Morgan, Deloitte and the Susquehanna International Group.
"I want to give students the tools to beat the market and become the next Mark Strome '78 or Gregory Lumsden," he said.
Cohen is also continuing to develop his innovative stock market game, Future Traders, which he introduced to ODU two years ago. He is enhancing his online version to make it scalable so he can begin distributing his game to Universities and high schools globally.
