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Student Managed Fund

Student Managed Fund. MBA Open House October 29, 2007. SMF is a student run investment portfolio. Students manage a $1,000,000 portfolio of stocks. Analyst reports are created for each stock under consideration.

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Student Managed Fund

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  1. Student Managed Fund MBA Open House October 29, 2007

  2. SMF is a student run investment portfolio. Students manage a $1,000,000 portfolio of stocks. Analyst reports are created for each stock under consideration. Stock is presented to the entire group and 70% voting is required to buy a stock. What is Student Managed Fund?

  3. Highlights & Goal • Two groups of select undergraduate and MBA students. • Two different portfolios of $1,000,000 each. • Research and invest in domestically traded equities. • Goal: To outperform the S&P over 5 year horizon.

  4. Investment Philosophy • Follow a fundamental bottom-up approach • Focus on companies with a market cap of at least $1Billion • Target stocks that trade at a minimum 15% perceived discount to their intrinsic value • Invest across a diversified group of sectors to emulate the S&P 500 Index

  5. M $ F Investment Process Stock Selection Active Portfolio Management Fundamental Analysis

  6. Seek high quality US Equities that exhibit strong growth potential within their industry Screeners: Yahoo! Finance MSN Money Central Value line Thomson Financials Rank stocks based on: Earnings/Sales growth Net Operating margins ROE, ROA P/E, PEG Stock Selection

  7. Fundamental Analysis • Narrow down the range by emphasizing on the following value drivers • Operating Margins • Revenue and Earnings ramp-up • Capital Expenditure • R&D Intensity • Free Cash Flow Growth • Discounted Cash Flow Analysis • Real Return to stockholders

  8. Active Portfolio Management • Assign Different Weight-age to different sectors • Stop loss • 15% stop loss on all positions • Protect down-side risk • Prevent market volatility from stopping out positions • Re-evaluation of positions • Change in business model or expectations

  9. Learning Experience • Strength in Numbers • 11 Managers – 11 Different Styles to Learn From • Expertise Across Different Industries • Stand Up to the Scrutiny of Peers • Look for Compelling Business Stories • What is the Company’s Competitive Advantage? • Why Will Your Stock Outperform the Market? • Add Value Through Event-Driven Returns • Look for Opportunities that Will Unlock Value

  10. Questions

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