How NYU MBA Students Learn to Run Real Money

This column was written by Stockpickr member Ira Krakow.

MBA students of the New York University Leonard M. Stern School of Business are not only fortunate to be located within a few subway stops of Wall Street, but also to have the opportunity to participate in the Michael Price Student Investment Fund (MPSIF), a family of four student-run funds .

So what can you learn from the MPSIF?

According to NYU Stern Professor Anthony Marciano, when it comes to learning about investing, one of the benefits of a group-run fund like the MPSIF "is that you obtain the wisdom of the masses with possibly less psychological bias than with an organizational structure where one manager calls the shots." Marciano says, "There is a large body of evidence supporting the greater accuracy of mass opinion versus individual experts in many cases."

Part of the overall NYU endowment, the MPSIF was established at the height of the dot-com boom in March 2000, with an initial investment of $2 million from legendary value investor Michael Price (Stockpickr Portfolio).

Under the terms of the fund's charter, the student fund managers must disburse 5% of the fund's assets each year. The dividend is paid to Price's alma mater, the University of Oklahoma, to assist its MBA students with their tuition and travel expenses while they attend summer classes at Stern. According to Marciano, who oversees the MPSIF, in its seven years of existence, the fund has disbursed $664,000. Marciano adds, "The cumulative aggregate returns [of the fund] have been impressive -- higher than the appropriate blended index and have been achieving results superior to most professional money managers ."