Over the years, East Greenwich High School students have done well, very well in fact, in the InvestWrite competition. EG students have won the state competition each year and several went on to place in the top 10 nationally since the school started participating in 2010. This year, EGHS senior Nicholas Sanzi has the distinction of placing first in the nation, with his essay making a pitch to investors for capital to establish a mental health center offering free help to those in need.
InvestWrite is a national essay competition conducted by the SIFMA Foundation designed to bridge classroom learning in mathematics, social studies, and language arts with the practical research and knowledge required for long-term personal financial planning.
Sanzi and business teacher Pat Page will travel to New York City for an all-expense-paid trip to receive an InvestWrite medal (for Sanzi) and plaque (for Page). Congratulations, Nick and Mrs. Page! (Here’s the list of all the EGHS InvestWrite winners since 2010: InvestWrite Winners 2010-20.)
Here’s Sanzi’s award-winning essay:
Solving Our Mental Health Crisis: One Investment at a Time
The current global mental health crisis is a quiet threat to the well-being of humanity. Over 45 million Americans are experiencing a mental illness of some kind, and that is just the portion that has been diagnosed. Although the problem is widespread, help has been rare for those who need it. An estimated 57 percent of individuals struggling with a mental illness do not receive treatment of any kind.
I myself have seen firsthand the destruction untreated mental trauma can have on one’s life. I seek to make an impact in this area throughout my life. Introducing the Calderone Center, a local free wellness center named after a relative of mine who lost her battle with depression. Therapy is among the most vital yet underutilized healthcare assets Americans have at their disposal.
My goal is to bring therapy to those who need it in an accessible, free, and enjoyable way. The Calderone Center would be an open place of recreation. While the facility would include on-call therapists and life coaches, it would also host several artistic outlets for those uninterested in traditional therapeutic methods. The initiative will not only bring about a movement toward healthy and happy mind function, but it would also revitalize suffering communities, giving birth to a new generation of healthy artists, thinkers and creators.
In order to purchase the facility, pay new employees and adequately start the investment fund to grow the organization’s capital over time, I am requesting an initial investment of $200,000. Approximately 50 percent of this money will be allocated towards start-up costs, while the remaining will be invested. I will be personally responsible for investing the non-profit’s capital. In accordance with my fiduciary responsibilities as head of the organization, I will balance risk conservatively, managing a diversified portfolio consisting of assets from a range of classes and sectors, which will benefit the foundation on both a 10- and 20-year timeline.
With a 10-year time horizon, I will invest in securities that will ensure growth. Strong initial returns on investment are essential to fund start-up costs and overhead expenses. By investing in proven large-cap stocks and promising small- to mid-cap stocks in growing markets, this goal can be achieved while assuming a responsible amount of risk. All investments will uphold the tenets of sustainable impact investing, aligning with the values of the organization.
Investing a sizable portion of the foundation’s capital in small- to mid-capitalization-sized stocks, while risky, may provide the necessary returns. One example of a stock I would invest in is Plug Power (PLUG). This stock, while touting a somewhat volatile 5-Year Beta of 1.7, is expected to consistently grow in the coming years. PLUG is the only company of its kind producing hydrogen fuel-cell technology that is widely utilized by electric industrial vehicles. With the electric car market share expected to climb to 7.6 percent by 2026, and environmental concerns in coal powered electricity, hydrogen fuel cells may become a staple of the electric car market.
One investment strategy I will rely on is buying “on the dip,” or buying a stock facing a temporary downward trend. For example, a small cap stock I would buy on the dip is TPI Composites, the only international independent manufacturer of composite wind blades. In April, General Electric slashed its stake in TPI by two-thirds whilst acquiring LM Wind Power, TPI’s biggest competitor. Losing their largest contract, TPI’s share price fell from $30.94 a share to $19.54 over the span of a month, and it has yet to recover since. However, the company still holds a strong grip on the turbine market.
In the 3rd Quarter of 2019, TPI showed strong financial results with 57 percent adjusted EBITDA growth. Despite the market’s over reaction, the wind industry also grew 8 percent in 2018 amidst record demand, and TPI is a strong buy for the foundation’s portfolio at its current price.
However, the non-profit will also hold a position in large-cap stocks which, although having less room to grow over time, will gain value more consistently. A prime example of a large capitalization stock I would invest in is Apple. Apple is primarily a growth stock but also has components of a value stock.
Regardless of its designation, it has held a long track record of success. Despite its large cap size, Apple has also proven it has room to grow as it expands into new markets. For example, in 2019, iPhone sales were weak, falling 15 percent across the first three quarters. However, this was overshadowed by stronger wearable technology income. Sitting at a current PE Ratio of 22.48 and a forward PE of 17.98, earnings are expected to climb disproportionate to the share price. Large capitalization stocks like Apple ground the portfolio and ensure steady growth.
For a 20-year timeline I will look to invest in safer assets such as corporate bonds with nothing less than an AA rating. Long-term investments in bonds will secure a fixed-income stream and will provide a more conservative component to our portfolio. In addition, I will invest in the Parnassus Core Equity Institutional Fund (PRILX).
This mutual fund offers below average fees, a five-star MorningStar ranking, and a high sustainability rating. It features a diversified portfolio of primarily large capitalization stocks from several different sectors. All holdings uphold environmental, social, and governance standards at a high or above average level. Anchoring the non-profit’s portfolio, this fund will grow initial investments over the course of 20 years.
The returns derived from the Calderone Center’s investments will be funneled into the organization to ensure the long-term viability of our mission. The investments I have set forth will bring much needed attention and relief to a global epidemic. Just as mental illness will persist over the years, so will we, sustained by capital growth and an undying will to help.