Friday Night Stocks: NYU Undergrads Team Up to Beat the S&P

The IAG Portfolios

There are two portfolios run by the IAG: the All-Star Portfolio, which maintains a growth strategy and the Initiative Portfolio, which goes for a value -investing strategy.

So what are the IAG's rules for investing? Each portfolio starts off with $100,000 in pretend cash , and can only invest in stocks that trade on U.S. exchanges . Each portfolio must also maintain a certain amount of diversification (no more than 15% invested in any one holding), and only All-Star can short-sell stocks. The S&P 500 Index is the benchmark that is used to gauge the performance of each portfolio.

For every 1% that the IAG's two portfolios beat the S&P 500, the Stern School gives the group a real $500 (up to a maximum of 10% for each portfolio), that is used for things like movie nights and dinners for the group.

The IAG's Fall '07 Stock Picks & Passes (So Far)

Week One. Leave it to college students to suggest one of the world's leading alcohol brands as a first pick for the 2007-08 academic year.

The first official presentation for the school year was for Diageo (DEO Quote), the company behind Smirnoff and Tanqueray. But the choice to present Diageo wasn't as simple as a quick vote at happy hour, according to Feliks Zarotsky, Dina Model, and Meghana Reddy, the team behind the Diageo analysis:

"We chose the wines and spirits industry due to the volatility of the markets and the overall economy at that point. Bernanke (the Federal Reserve Chairman) was on the verge of making interest rate announcements and we felt that the investing environment was very volatile at that point. Therefore, we looked at the spirits and wines industry, as it is known to perform during times of both economic prosperity and duress."