THE STUDENT INVESTMENT GROUP NEWSLETTER FROM THE UNIVERSITY OF NORTH TEXAS Organizational Newsletter January 2016 SIG Board Members (left to right): Michael Powell, Alexus Reed, Dylan Barnard, Elijah Lam, Mason Hendrickson, Rigers Memko, Josue Leija, Isaac Serrata, Alex Ledesma In This Issue Welcome! A Word from the President About SIG Portfolio Breakdown Portfolio Manager Q&A Thank You For Joining Us! Faculty Spotlight — The SIG Student Engagement & Development Committee For Our Members The Student Investment Group We are very excited to present the UNT Student Investment Group’s first newsletter. Our goal is to keep you informed about what SIG is up to for the coming semester and SIG’s portfolio. Whether you are an alumni of SIG, a partnering business or organization, or a current SIG member, our hope is that we can continue to strengthen our organization by providing this avenue of communication. Spring 2016 WELCOME A WORD FROM THE PRESIDENT My name is Rigers Memko and I serve as the President of the Student Investment Group (SIG). First and foremost, I would like to say that I am truly thankful and honored to work alongside such an intellectual group of officers whom are dedicated to building on the success of our organization and are consistently striving to leave a lasting mark on the Student Investment Group. With great pleasure, we present our inaugural SIG Newsletter and would like to welcome you to the start of a great spring semester. The start of a new semester is an exciting time for new and returning members alike. It is also a great time for reconnecting, forming new friendships, and exploring new opportunities for success. The SIG offers many opportunities to engage and connect with current professionals through our alumni network and our partnerships in multiple industries. Through these networks, our members are able to interact and obtain insight that will grant them the employment opportunity that they desire. This spring semester, we are excited to begin managing a second and separate portfolio on behalf of the UNT Foundation worth $100,000. As a added benefit to our organization, we will be paid a one percent (1%) annual management fee. The strategic partnership with the UNT Foundation will provide our members with a professional world customer-client relationship and the opportunity to interact and glean wisdom from the great professionals at the UNT Foundation. Also, this semester we will add our third and separate portfolio worth $50,000 that comes from the TD A meritrade Thinkorswim! Challenge that our members have won in the last two years ($30,000 in Fall 2014 and $20,000 in Fall 2015). This past fall semester, we successfully established the Student Engagement and Development (S.E.D.) committee. This team will set out to build cohesiveness among our members by actively engaging and developing them both individually and as a group to maximize their potential. The Student Engagement and Development team will provide the stability necessary to guide and grow our organization and its future generations to provide a smooth transition from one school year to another. Furthermore, the Student Engagement and Development team will actively seek to bridge the gap between our members and alumni by revamping our alumni network. I am excited to announce that this semester we will actively seek to add a Portfolio Risk Officer to ensure the efficient and balanced risk management of our three separate portfolios in a manner that maximizes quality, profitability, and growth of each portfolio. The Portfolio Risk Officer will assist the Portfolio Management Committee in providing segment oversight, value-added insight, and recommendations to our Portfolio Managers. The Portfolio Risk Officer shall oversee the Risk Management Administration and ensure that sound and efficient risk management techniques are implemented and maintained in key aspects of each portfolio. The structural additions will build a more solid foundation for the Student Investment Group and provide the stability to guide and grow our organization for many future generations. The opportunities offered at the SIG, while managing real money and making impactful decisions, will give our members an edge when beginning their professional careers. Lastly, I would like to formally announce that our weekly meetings will be held on Mondays from 5-6pm in room BLB 055. On behalf of the Student Investment Group, I wish you a great semester! Sincerely, Rigers Memko | M.S. in A ccounting Candidate & President of the UNT Student Investment Group The Student Investment Group Spring 2016 2 ABOUT SIG Awards & Honors Our Vision & Purpose Eagle Awards: The Student Investment Group, informally called SIG, exists to offer students and SIG members Winner of the 2014the opportunity to experience investing, receive education on investment related topics, and to 2015 Organization of the empower them academically and professionally to achieve their desired financial goals. year Our Goals and Background TD Ameritrade Thinkorswim Challenge: 1st & 4th place (2014), 2nd & 4th (2015) 1st place at 2014 Texas Investment Portfolio Symposium The Student Investment Group was founded in 2002 with the help of a generous gift from Colonel Guy M. Cloud that endowed the Student-Managed Investment Fund (SMIF) and a Student Scholarship Program at the University of North Texas. The gift consisted of a Universal Life Contract and a Life Annuity Contract. By the end of 2007, the Universal Life Contract was liquidated to provide a source of funding for equity purchases based upon SIG’s portfolio management procedures. In 2007, SIG began the fund with $285,000 and has grown to its current value of $592,000. The ultimate goal of this portfolio is to grow its value to more than $1,000,000, at which point the fund can be used to provide scholarships for UNT students. 2014 TD Amertrade Thinkorswim Champions pictured (left to right): Elijah Lam, Josue Leija, Mason Hendrickson The Student Investment Group Spring 2016 3 PORTFOLIO SYNOPSIS & TOP 10 HOLDINGS Below is a list of our top ten holdings and their performance in the past year. On the next page, you will find a pie chart illustrating the diversification in our portfolio by different sectors. Top 10 Holdings Company Name Ticker % Holdings Price Bought EoY Price Total Return Apple AAPL 11.41% $46.40 $105.26 126.85% Johnson & Johnson JNJ 7.34% $58.84 $102.72 74.58% Phillip Morris PM 6.28% $47.92 $87.91 83.45% Coca-Cola KO 6.14% $24.01 $42.96 78.93% AZZ Inc. AZZ 3.97% $20.64 $55.57 169.23% Exxon Mobile XOM 3.71% $58.66 $77.95 32.88% 3M MMM 3.59% $87.50 $150.64 72.16% AT&T T 3.28% $28.04 $34.41 22.72% General Electric GE 2.97% $26.18 $28.62 9.32% Microsoft MSFT 2.64% $26.05 $50.71 94.66% The Student Investment Group Spring 2016 4 PORTFOLIO BREAKDOWN BY INDUSTRY/SECTOR The Student Investment Group Spring 2016 5 Q&A WITH SIG PORTFOLIO MANAGERS Dylan Barnard Major: Finance IS: How long have you been involved with SIG? DB: I have been involved since Spring 2014, so about three semesters now. Chang Menon Major: Business Analytics IS: How long have you been involved with SIG? CM: 1 year. IS: What are you excited for SIG to accomplish in the upcoming year? DB: I am most excited about the new money from the foundations endowment fund and the $30,000 won from the Thinkorswim! Challenge where we took first place last fall. IS: What are you excited for SIG to accomplish in the upcoming year? CM: The networking opportunities that may arise from the Black Tie Event and growing SIG’s Individual portfolio from $30,000 to $50,00 during the first semester and continue growing it to $80,000 in the second semester. IS: What is your favorite Stock? IS: What is your favorite stock? DB: Although it’s become cliche in recent years, I have CM: Tesla. They are the only company that to say Apple. They are the strongest company in the mar- promises something evolutionary and revolutionary. A ket right now and the most undervalued shares in the man once had a dream to own all the gas stations in the S&P (500). world and he’s on his way to doing it. IS: What is your Investment Philosophy? DB: My investment philosophy coincides a “Ben Graham” philosophy by focusing largely on value, but also buying growth in disproportionate increments IS: What is your Investment Philosophy? CM: I believe that I should always stick to what I know… Always invest in things you know and understand. IS: $FB, $AAPL, $GOOGL — You have to Buy one, Hold IS: $FB, $AAPL, $GOOGL — You have to Buy one, Hold one, and Sell one. Go! one, and Sell one. Go! DB: Buy Apple, Hold Facebook, and Sell Google CM: Buy Google, Hold Facebook, Sell Apple Q&A Conducted by Isaac Serrata The Student Investment Group Spring 2016 6 FACULTY SPOTLIGHT DR. RUSTY MACDONALD—INTERVIEWED BY ISAAC SERRATA Dr. MacDonald introducing SIG 2012 Recently, I spoke with Dr. MacDonald about how he has helped SIG become the great student organization that it is today. IS: How long have you been here at UNT? RM: "I obtained my Bachelors of Science in Economics in 1977 here at UNT and I've been a faculty member since 1989. Been here 26 years now." IS: How did you get involved with SIG? RM: "Dr. Michael Braswell, the chairman of the FIREL Dept. at the time, asked me to be the founding faculty advisor back in 2002. I've been involved with SIG since the beginning." IS: You’re THE go-to guy for investments here. How did you get started? RM: "I first started trading stocks, with the help of my parents, when I was 14. I bought into a company called American Hospital Supply that did quite well and have been trading stocks from then on. I started trading options OTC (over-the-counter) before the development of the CBOE (Chicago Boards Option Exchange) and I have over 40 years experience trading on the stock market. In other words, I started trading securities before you were born." The Student Investment Group Spring 2016 7 FACULTY SPOTLIGHT DR. RUSTY MACDONALD (CONT.) IS: What do you think makes SIG so successful? RM: "Well, first of all, all student organizations are based on voluntary labor. What truly amazes me about SIG is the vast number of people who have voluntarily “I started trading securities given their time to a worthy cause and organization. before you were born.” Hundreds of people have contributed and tens of thou- Dr. MacDonald sands of man-hours have been put into SIG over the last 15 years. Also, the number of people who constantly come forward to get involved – it's the dedicated effort of those people which has made SIG the successful organization that it is." IS: You’ve witnessed and helped foster the success of SIG for many years. What do you think is in store for SIG in the future? RM: "Once SIG reaches 1 million dollars, the additional yearly return from the fund can be used for scholarships. At that point, SIG will then have to determine a process by which scholarships are granted. Reaching additional donors so that SIG can gather more capital is something that would greatly benefit the organization as well." IS: Any advice for new members that would help guide their entry into the vast world of finance and investing? RM: "Get involved. Take the investments 4200 class and get involved in the general and analyst meetings. Getting to know the Bloomberg terminal would prove valuable to anyone who's new to investments. Determine your personal goals and objectives and get involved." IS: Dr. MacDonald, we appreciate the time you've taken to share valuable knowledge with SIG. RM: "Anytime.” Dr. MacDonald can be reached by e-mail at Don.Macdonald@unt.edu The Student Investment Group Spring 2016 8 FOR OUR MEMBERS RECOMMENDED SOURCES Books: For a Solid Foundation: Fundamental Analysis for Dummies by Matt Krantz The Classic: The Intelligent Investor by Benjamin Graham Advanced Investing: Security Analysis by Benjamin Graham Recommendation from Jane Gilday, CFA: Secrets for Profiting in Bull and Bear Markets by Stan Weinstein Podcasts: Stay up-to-date on our latest news Website: unt.orgsync.com/org/sig Twitter: @UNTSIG Facebook: APM: Marketplace: News in the market. Each Podcast is roughly 25-27 minutes. Produced daily. Website: http://www.marketplace.org/ NPR: Planet Money: Different stories regarding the economy as a whole. Each podcast is anywhere from 15-25 minutes. Produced 1-2x weekly. Website: http://www.npr.org/sections/money/ www.facebook.com/UNTSIG Questions, comments, or suggestions? Email: sig@unt.edu We appreciate your support! This first edition of the SIG Newsletter has been brought to you by the SIG Student Engagement & Development (S.E.D.) Committee. Isaac Serrata, Josue Leija, and Alex Ledesma make up the SIG S.E.D. Committee. As the S.E.D. Committee, we are committed to our members and seek to maintain and build our network with Alumni, partnering organizations, and Sponsors. General content was provided by John Kelsey (former member of S.E.D. Committee), portfolio data provided by Josue Leija and Dylan Barnard, and the Interview of Dr. MacDonald, the Portfolio Manager Q&A, editing, and formatting were conducted by Isaac Serrata. S.E.D. Committee (from left to right): Josue Leija, Isaac Serrata, Alex Ledesma A special thanks to those who contributed to this 1st edition of SIG newsletter: Rigers Memko (current President of SIG), Portfolio Managers Chang Menon and Dylan Bernard, Dr. MacDonald, Alexus Reed (Marketing Chair of SIG), John Kelsey, and Jane Gliday, CFA. 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