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INVESTMENT CLUB

INVESTMENT CLUB. FRIDAY, FEB 7 2014 WEEKLY MEETING. PREVIEW. 1. Market Update 2. Club Overview 3. Interview Tips 4. Stock Fundamentals. Market Update. Expedia Earnings. Reported earnings – Earnings beat estimates Stock appreciated 13% after hours

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INVESTMENT CLUB

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  1. INVESTMENT CLUB FRIDAY, FEB 7 2014 WEEKLY MEETING

  2. PREVIEW • 1. Market Update • 2. Club Overview • 3. Interview Tips • 4. Stock Fundamentals

  3. Market Update

  4. Expedia Earnings • Reported earnings – Earnings beat estimates • Stock appreciated 13% after hours • Was down 4.3% due to search-engine concerns • Difficult to separate from competitors • Club has enjoyed 30% gains

  5. Long-Term Jobless Benefits Rejected • Republicans blocked 3 month extension • Could hurt consumer confidence • Discourages workers to continue job search • Issue could be revived depending on debt limit

  6. Market Volatility • The S&P 500 appreciated 30% - 2013 • Investors estimate between 8-10% for 2014 • Reduce positions in U.S. small company stocks • Blue chip stocks / short – term bonds • Tech giants Apple and Cisco highlighted • Established infrastructure • Pay dividends

  7. Improved Labor Market • Fed officials concerned with fast falling unemployment • Contradicts Okun’s Law • By U6 measure, unemployment was 13.1% • When should Fed raise rates? • Too quickly: dampen economic recovery • Too slow: fuels inflation, financial bubbles

  8. Global Economy • Continued pessimism for economic recovery • Sentiment based upon: • Tumbling stock prices • Fed’s taper of QE • Weak U.S. reports in car sales, home sales, hiring • Emerging Markets: Brazil growth down 5% since 2011 • Concerns in Chinese growth (2nd largest economy)

  9. CLUB OVERVIEW

  10. Investment Club OVERVIEW: 1. Close to $500,000 2. Over 40 stocks 3. Strictly Student Run

  11. GOALS • 1. Manage and Grow Portfolio • 2. Educate Members • 3. Network

  12. WHY INVESTMENT CLUB?

  13. New Ideas • 1. Shareholder Meeting

  14. Ideas • 2. Freshman Investing Crash Course • 3. Wall Street Panel

  15. Ideas • 4. Stock Pitch Battle • 5. WSJ Quiz

  16. Ideas • 6. Mentorship Program • 7. Interview Prep

  17. INTEVIEW PREP

  18. INTERVIEW PREP • NETWORKING, NETWORING, NETWORKING • WHAT YOU NEED: • *** STRONG GPA • *** UNDERSTANDING OF MARKETS • *** DESIRE TO LEARN

  19. Wall Street Interview COURSE WORK: - Financial Accounting, Financial Theory, Corporate Finance, ect.

  20. COMMON QUESTIONS • FIT QUESTIONS: • 1. How did you prepare for this interview? • - Coursework, WSJ, Barrons, ect. • 2. Describe a moment when you worked under pressure? • - Time crunch, stick to basics

  21. Banking Questions 1. What is the main goal of an investment bank? - Get company from point A to B 2. Briefly tell me about recent major financial transactions? 3. Explain Structure of XYZ Bank? - Read 10K

  22. Questions 4. Most important trends in economy? 5. Do you follow a certain stock? 6. Role of a summer intern/ full time analyst? 7. Why XYZ Bank? - CEO: Direction of firm

  23. FINANCIAL QUETIONS • 1. How does Net Income influence all 3 financial statements? - Income Statement, Balance Sheet, Cash Flow 2. Basic Methods for Valuing a Company? - Comparable Analysis - Precedent Transaction Analysis - DCF

  24. BRAIN TEASERS • Q: You’ve got a 10 x 10 x 10 cube made up of 1 x 1 x 1 smaller cubes. The outside of the larger cube is completely painted red. On how many of the smaller cubes is there any red paint?

  25. BRAIN TEASER • A: First, note that the larger cube is made up of 1000 smaller cubes.  The easiest way to think about this is how many cubes are NOT painted?  8 x 8 x 8 inner cubes are not painted which equals 512 cubes.  Therefore, 1000 – 512 = 488 cubes that have some paint.  Alternatively, we can calculate this by saying that two 10 x 10 sides are painted (200) plus two 10 x 8 sides (160) plus two 8 x 8 sides (128).  200 + 160 + 128 = 488.

  26. RESOURCES • 1. FINANCIAL NEWS OUTLET • 2. MACABACUS. COM • 3. WALLSTREETOASIS.COM • 4. GLASSDOOR.COM

  27. Qualitative Analysis of Tesla (TSLA) BY BRENDAN GOVER

  28. Common Qualitative Measures • Dan Killmurray ’85 (UBS) • TAM • Moat

  29. Management • Management track record/compensation package • Elon Musk • Previous/current other business ventures

  30. COMMENTS? • How can the club improve? • Suggestions?

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