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January 30 th 2013

1 st General Meeting Spring 2013. January 30 th 2013. Long-term Goals. Education. To offer an educational, real-life opportunity for aspiring investment professionals. Discipline. To adopt policies and procedures characteristic of a professionally managed fund. Alpha.

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January 30 th 2013

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  1. 1st General Meeting Spring 2013 January 30th 2013

  2. Long-term Goals Education • To offer an educational, real-life opportunity for aspiring investment professionals Discipline • To adopt policies and procedures characteristic of a professionally managed fund Alpha • To create and maintain an alpha generating process that promises safety of capital and a fair return • Personal, career and fund growth Growth

  3. Annual Club Timeline Fall Semester Industry Analysis Stock Analysis Review and Preparation Summer Spring Semester Supported by: - Regression analysis - Proprietary student research - Published Street research - Peer-to-peer mentorship Supported by: - Valuation methodologies - Regression analysis - Published Street research - Peer-to-peer mentorship Supported by: - Club management - Club resources - Leadership role incentives - Prior research Maintained Coverage by Investment Management – Constant Re-evaluation

  4. Roles in the Finance & Investment Club Generalists Investment Research (IR) Investment Management (IM) • VP IM • Sector Heads (SH) • Investment Associates (IA) • President • VP Corporate Relations • VP Operations • Co-VPs IR • Senior Analysts (SA) • Junior Analysts (JA) Organizing events, communication, general meetings and speakers Over 150+ members organized by sector; researches investments Portfolio management; responsible for maintaining investment coverage Executive Board Investment Management (IM) • VP Investment Management • 7 Sector Heads & 8 Investment Associates Investment Research (IR) • 2 VPs Investment Research • 14 Senior Analysts & over 140 Junior Analysts

  5. Annual Club Timeline: Spring Semester 1 2 3 4 5 1 2 3 4 Major Events 1 3 Leadership Selection - Replacements are appointed, if needed - Study abroad, “senioritis,” job search likely reasons Wall St. Trip - Lunch with 30 senior Alumni - Corporate site visits 2 4 April March February January Fidelity 2-Minute Drill - Bring in Investment Professionals for a one-day stock pitch event Company Presentations - Alumni and faculty judges - Identifying best and worst companies IR Process 1 3 Company Drivers Comparables Valuation 5 Risks and Sensitivities 2 4 Financial Statements Discounted Cash Flow Source: ‘‘Training Student Equity Analysts and Utilizing their Recommendations in Active Portfolio Management’’ by Scott Stewart

  6. Fund Operations & Mechanics: Investment Decisions Formal Stock Pitch to Investment Management - Initial research presented by either IM or IR side - Group-led Q&A and discussion - Industry drivers & company fundamentals questioned - Usually sent for second round of research Step 1: Supported by: - Valuation methodologies - Regression analysis - Proprietary student research - Published Street research Step 2: Q&A Follow-up (after 7+ days of additional research) - Analyst(s) answer previously unanswered questions - Group-led Q&A and discussion - Investment management team decides whether to repeat Step 2 or to pass onto voting process Supported by: - Comfortable understanding of the industry and the company - No rock left unturned InvestmentVotingProcess(after IM team is satisfied) - Held after Investment Management meetings - Occurs when comfortable with fundamental research - Pros and Cons of investment discussed - Investment decision passed onto Advisor Step 3: Supported by: - Thorough discussion - Analysis of affect on sector / portfolio beta - Decision by committee Source: ‘‘Training Student Equity Analysts and Utilizing their Recommendations in Active Portfolio Management’’ by Scott Stewart

  7. Directed Study Application • The Finance Directed Study program is back • The Course is a guided and intensive version of Finance Club • Industry analysis, company valuation, trends, industry drivers, etc. • Applications are due this Friday at 6pm • Responses will be given over the weekend • Professor Segal, our faculty advisor, leads the program • RichmonKam will be the TA • The Directed Study participates in the BSAS Competition • The team consists of 5 people, who in the past have been Juniors, but exceptional Sophomores have been considered • Freshmen should also apply to get their name out there… Please submit a cover letter and resume to richmon.kam@gmail.com

  8. Fund Updates • We are building an alumni board • 4-6 advisors from the buy-side, with one from the sell-side • Provide input on fund management, what we should teach and club structure • In 3-4 weeks the Executive Board will be meeting with the Endowment to finalize the $250,000 donation • A full fund update on performance next week Two new Sector Heads • Chris Kovalik: Consumer • Knut Kirchoff: Industrials

  9. Next General Meeting; Wednesday February 6 @ 5pm in SAR 101 If you want to join a team please come up to the podium so that we can put you in touch with the senior analysts of the sector of your choice

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