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Kai Petainen
  Kai Petainen
 

Tozzi Center Manager Earns National Recognition

5/12/2005 --

Kai Petainen excels on investment Web site.

ANN ARBOR, Mich.—Kai Petainen, trading floor manager of the John R. and Georgene M. Tozzi Electronic Business and Financial Center at the Stephen M. Ross School of Business at the University of Michigan, recently earned national recognition for his "virtual" portfolio management skills on the amateur investing Web site Marketocracy.com. He has three portfolios (the highest number managed by the same person) in the top 100.

Petainen also has the top two short funds on the site, proving he has skill in picking both winners and losers. He says shorting (the opposite of buying stock) can be risky—you sell stock you don't own with the promise to buy it back later (hopefully at a lower cost.)

As a result of his performance on the site, Petainen was recently featured on Forbes.com where he gave his top short picks—Sirius Satellite Radio (nasdaq: SIRI), FX Energy (nasdaq: FXEN), NPS Pharmaceuticals (nasdaq: NPSP), Salesforce.com (nyse: CRM) and InPhonic (nasdaq: INPC).

The success of the long and short funds on the Web site illustrates a hedging strategy that Tozzi Center director and professor of accounting Richard Sloan teaches, Petainen says.

"What started out as a fun thing in an attempt to see if I was learning from the lab turned into an opportunity where I was able to talk about the Tozzi trading lab and academic research by Professors Sloan, Patricia Dechow and Russell Lundholm, and it became an opportunity to network with fund managers," he said.

Sloan and Petainen also run earningstorpedo.com where they run a screen that looks at a variety of factors, including value, smart money, momentum and earnings quality. From this system, they compile a list of good and bad stocks.

The Tozzi Center, based on wireless technology, includes a mock trading floor, e-lab and electronic modular classroom. The floor offers students an experiential learning facility that incorporates the latest financial information technology for integrative coursework in finance, accounting strategy and computing. The e-Lab, dedicated to the research, practice and teaching of electronic commerce and electronic business, provides a broad perspective on the way information technology transforms business by looking at both technical and social issues of relevance.

Marketocracy.com tracks more than 60,000 stock portfolios run by amateur investors. The top 100 members receive many benefits, including free premium memberships, posting privileges on their forums, press opportunities and cash. Marketocracy pays the top 100 members based on assets under management with their affiliate, Marketocracy Capital Management.



For more information, contact:
Heather Thorne
Phone: (734) 936-8421
Email: hthorne@umich.edu