Class Project: INVESTMENT RECOMMENDATION (Print version)

Objective: To learn investment analysis by employing the techniques learned in class.

Outcome:  Student shall: a) select financial instruments for investment/recommendation; b)  use investment strategies, as individual investors or from the standpoint of institutional investment objectives; c) employ techniques learned in class; and d) make a brief presentation to the class seeking critique.  This Class Project accounts for 40% of the final grade.

Approach: Students (individually or in a group of no more than three) will invest hypothetically choosing particular investments and investment strategies--chosen from a fairly broad array of companies, securities, and institutional contexts. The Project is a significant component of the course and allows the student to apply the conceptual frameworks and analytical tools learned in class. Students will write and present a two-phase page Investment Report detailing their analyses of publicly-held companies in their portfolio, investment objectives, rationale, conclusions for decisions, financial overview, etc.  Students will present their findings and make 'educated' recommendations on their investments to the a class audience as a final presentation.

• Pick stocks that are of interest to you.
• Analyze your selections: look at annual reports, financial statements, and historical price charts (It is important to dissect the information you obtain).
• Equities - stick to companies that report steady annual earnings and growth (favor stocks/companies with rapidly growing earnings. Low valuation to high future earnings potential is good).
• Technique - develop a mix constructing a portfolio around a core. Choose a handful of great mostly blue chip companies that you plan to hold for the long run and build some more speculative investments around them. Note: All stocks trade at a spread (difference between bid and offer price). Limit orders can save money they take longer to execute, good-till-canceled GTC-trade won't clear unless the issue drops down to your price point. Consider that "market timing" rarely makes sense in investing.
• Monitor investments by preparing a tracking spreadsheet and/or chart from the time of investment acquisition (your portfolio start date).
• Convene/meet regularly, e.g. weekly (in person or electronically) with your group to discuss your progress and plan.
• Use all available resources for your final project (a large percentage of the grade depends on the Project): PowerPoint for the presentation, the Internet for your research and discussions, interview financial managers, use reference material-e.g. The Chicago Manual of Style (as Writing reference) from the Library, etc.
• Document your bibliography.
• Prepare an submit report with your presentation where you include your analysis, learnings and summarized reference material.

• Monitor investments by reading regularly a publication, read quarterly reports, annual reports and keep good records.
• High ownership by inside management is a good sign.
• Asset allocation - Investment capital into market (money above and beyond what is needed to live). Should never put more than 5% of total assets into a single investment or industry (different issues).
• Sell when the price appreciates or depreciates to some arbitrary level, such as 20 to 30 percent above or below cost.
• If something happens to the prospective potential, obviously sell.
• Once you buy stock in a company you become part owner and should act accordingly
• There are no guarantees on gains.
• Keep in mind that all securities carry a level of risk.
• The lower the current percentage of institutional ownership in a stock the better.