FIN 366P: FINANCIAL ANALYST PROGRAM
Fall 2009 Practicum
Co-Instructors: Professors Kamm & Miller, Department of Finance
Kamm Email: kelly.kamm@mccombs.utexas.edu
Miller Email: david.miller@mccombs.utexas.edu
Kamm Office Hours: MW 2:30-3:30 in GSB 5.124C
Miller Office Hours: TTH 2-3 and W 12-1 in GSB 5.124D
T.A.’s, MBA Fund Managers: Chris Clement (Consumer) & Gaurav Gupta (Tech)
T.A. Office Hours: Available prior to major assignments & by email request
Chris’s Email: Christopher.Clement@mba10.mccombs.utexas.edu
Gaurav’s Email: Gaurav.Gupta@mba10.mccombs.utexas.edu
Sections 03110, 03115, 03120: You should be enrolled in one of three sections
Class Time: Fridays at 1 in GSB 2.122
Required Books: Order / purchase TODAY on-line or bookstore
Lowenstein, Roger, When Genius Failed: The Rise and Fall of Long Term Capital Management
McLean&Elkin; The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron
Required Group Simulation: HBS Finance Simulation: Blackstone-Celanese
Room Reserved for Group Work: UTC 4.124, MW 11-12 & 1-2, F 11-12 & 1-5
COURSE OBJECTIVES:
In the fall term of the senior year, students in the Financial Analyst Program take the Finance
Practicum. In this course we meet for periodic discussion of books we are reading while each
student continues pursuing an independent study that counts towards the finance internship
requirement. In terms of reading and discussion, we will focus on literature related to recent or
current financial markets; for example, this term we will discuss leadership and ethics, risk and
transparency, and hedge funds. In terms of the finance internship requirement, F.A.P. seniors
continue to work in the field of investment management as equity research assistants to the MBA
Fund Managers. FAP students will make various presentations, participate in a Finance
simulation, and write a good amount. Students take a very active role in this class. They must
be self-motivated. Students must be able to not only take direction from the professors and the
MBA Managers but they must be self-directed in the practicum. This term, the goal is to
continue developing the economic, financial, and accounting skills to be strong finance students.
In addition, each member shall develop skills in leadership, address topics of ethics, and acquire
improved negotiation skills.
EVALUATION:
Final grades will be determined as follows:
Two In-Class Essay Tests
(Individual)
25%
After reading each book, there will be an in-class essay test. The student will respond in essay
form to two or more questions related to the book just read. The questions will challenge the
student to analyze a financial problem or general issue (such as ethics or leadership) that emerges
from having read the book. The best way to prepare for each of the two essay tests is to have
read the book and to have participated in class discussions. Each essay will be graded on
financial insight, demonstration of familiarity with the book, and how well the essay is written.
Each in-class essay tests counts for half of this component.
Presentation on Assigned Topic to be used in FAP Boot Camp
15%
We hope all of you will be able to attend and participate in the FAP Boot Camp for next year’s
FAP’s held every January. In January we will send out and email to ask you to participate. This
term, you will prepare and present the Power-Points that will be used in the training session for
new FAP’s. Some of the presentations may have to be updated in January but at this time
prepare the presentation as though you were presenting this term. Professor evaluation of the
hard copy of Power-point slides along with professor evaluation of the presentation will be
combined to determine your grade in this component. Preferences on presentations will be taken
and then assignments made. The following presentations will be given this term:






MBA Fund Structure (History, MBA roles, nature of FAP research)
Growth Fund and Value Fund (Objectives, benchmarks, performance, stock highlight)
Consumer, Energy, Healthcare, Tech, Financials (Historical Performance, industry
specifics, stock highlights)
Career Paths, Advantages & Disadvantages (Consulting, I-banking, Corporate, etc.)
Interviewing (Tips for Success, Major Questions, etc.)
Grad School & Charters, Licenses, Advantages & Disadvantages (MBA, Law, CFA etc.)
Stock Pitch Power-Points and Presentation to MBA’s
15%
At the beginning of this term, email the MBA Fund Managers to find out your assignment—
either a stock pitch or an industry report. Also state in your email that you are now available to
come to meetings and assist with additional research at their request. MBA Fund Managers will
decide how much detail they want in terms of a written report. You will turn in a hard copy of
your Power-point slides and you will present the stock pitch to the MBA’s. Professor evaluation
of the hard copy of Power-point slides along with the MBA Managers evaluation of your
presentation will be combined to determine your grade in this component. You should complete
this presentation by about the mid-way point of the Practicum
2
Final Paper on the Blackstone-Celanese Simulation (Group & Individual)
25%
The second-half of the term you will be participating in a HBS Simulation on a BlackstoneCelanese deal. This simulation covers the topics of private equity, valuation, and negotiation. It
involves several on-line rounds of preparation, analysis, decision-making, due diligence,
negotiating offers, and hopefully completing the deal. While going through the various rounds,
you be preparing the exhibits for the final paper. You shall submit these exhibits along with 10
to 12 pages permitted for the body of the paper. In the group paper, write the basis for the
reservation price, the results of your due diligence, the evolution and outcome of your
negotiations, etc. In the individual paper write your individual role in completing background
work and the various roles of the negotiation. The two components—the group paper and
individual paper will be combined to determine your grade in this component. Because your
participation level will also be assessed in the participation grade, the breakdown between group
and individual will be: 80%, 20%.
Homework, Professor Evaluations, MBA, Peer Review (Individual)
20%
Class participation is based on the contribution of each student to the class as a whole and to the
group efforts. Solid performance in this area depends on: consistent attendance; demonstration
that you are prepared for class; ability to lead and participate in discussion, effort level toward
group papers, presentations, and cases (an example is the simulation); strong reviews by MBA
Fund Managers and peers in their evaluations; and adherence to class policies (see below for
class policies including prohibition of improper use of electronics during class). For most
students, participation serves as a slight curve toward the final grade. After all components prior
to this one have been scored, the grades are combined to provide an “objective average” or
“starting point” grade for participation. Students with good participation will receive this grade
or higher (up to a letter grade) for the participation grade. A student with poor attendance or
poor effort in group work, or anyone who is disruptive earns a zero. Thus the grade in this final
category may range from zero to a solid A (96). Professors Kamm and Miller will jointly
determine this grade.
Final Grades
We use the university grading system with pluses and minuses. Due to the high quality of the
students in this class and the high level of effort required by each individual on assignments, we
expect that more than half the grades will be in A range (note that there is not a limit of half) and
that within the A range more than half will be A while less than half of the A range will be A-.
We also expect half or more (again, not a limit of half) of the grades will be A- or above. In this
particular class grades below A- tend to have a high correlation with missing class. Thus you
should email Professor Miller during the first half of the term and Professor Kamm during the
second half of the term prior to class if you have to miss due to a university excused absence.
We keep electronic copies of all such emails in an outlook folder. Anyone performing below
expectations (generally B- or below or attendance problems) will be informed of the need to
withdraw from the practicum class and from the program. Also, keep in mind that a failure to
adhere to the confidentiality agreement also leads to a withdrawal.
3
Schedule
Friday, August 30, Professor Miller & Kamm Classroom
Welcome back, Introductions, and Updates regarding Financial Analyst Program
Friday, September 4, Professor Miller & Kamm Classroom
In Class:
MBA Fund Managers: Presentation on MBA Funds
Professor Miller: student assigned to lead Enron discussion in 2 weeks /
Professor Miller / Kamm: Sign up for preference on topic and date of Power-Point
Presentation
Assignment:
Order Books NOW and start reading The Smartest Guys … Enron
Write and turn in a short essay (2-3 pages) on MBA Funds / Presentation, CBA 6.222
Email MBA Managers to state availability & get a stock pitch assignment
Friday, September 11, Time and Location set up in agreement by group members
Assignment:
Begin working on stock pitch / industry report research for MBA’s
Complete reading chapters 1-12 of The Smartest Guys … Enron
Write and turn in a short essay (2-3 pages) on your summer experience / turn in to Miller
Discussion leaders prepare 2 questions per chapter / turn in hard copy to Miller
Friday, September 18, Professor Miller, Classroom
In Class:
Internship Discussion & Presentation, turn in essay to CBA 6.222 at end of class
Assignment:
Complete first half of The Smartest Guys … Enron, Chapters 1 – 12
Discussion leaders arrive next class with hard copy of discussion questions to turn in
Stock pitch, Power-point presentation
*Friday, September 25, Professor Miller, Classroom
In Class:
Power-Point Presentations on assigned topic
Discuss Chapters 1 – 12 The Smartest Guys … Enron
Discussion leaders turn in discussion questions to Professor Miller at end of class
Rest of class sign up with Professor Miller to lead discussion on Enron book
4
Assignment:
Work on Stock Pitch
Read The Smartest Guys … Enron, Chapters 13 to End
Discussion leaders prepare 2 questions per chapter / turn in hard copy to Miller
Stock pitch, Power-point presentation
Friday, October 2, Time and Location set up in agreement by group members
Assignment:
Complete group Power-Point presentation on assigned topic
Print out a hard copy with names, stapled and turn in to CBA 6.222 by next Wed 4 pm
Sign up for HBS Finance Simulation: Blackstone—Celanese
*Friday, October 9, Professor Miller, Classroom
In Class:
Power-Point Presentations on assigned topic
Discuss Chapters 13 - end The Smartest Guys … Enron
Assignment:
Stock pitch
Friday, October 16, Time and Location set up in agreement by group members
Assignment:
Complete HBS Case foreground reading on Finance Simulation: Blackstone—Celanese
Write short essay and turn into CBA 6.222 by next Monday
*Friday, October 23, Professor Miller, Classroom
In Class:
Power-Point Presentations on assigned topic
Essay test over The Smartest Guys … Enron
Friday, October 30, Time and Location set up in agreement by group members
Assignment:
Complete Stock Pitch preparation for MBA’s & set up date with MBA’s to make pitch
Turn in hard copy of group Power-Point of stock pitch by next Monday, CBA 6.222
Read When Genius Failed …LTCM, Chapters 1 to 6
Kamm: Half of groups sign up with me to prepare discussion questions
5
*Friday, November 6, Professor Kamm, Classroom
In Class:
Discuss When Genius Failed …LTCM, Chapters 1 to 6
Discussion leaders turn in discussion questions to Professor Kamm at end of class
Rest of class sign up with Professor Kamm to lead discussion on Enron book
Assignment:
Read When Genius Failed …LTCM, Chapters 13 to End
Discussion leaders prepare 2 questions per chapter / turn in hard copy to Kamm
Email MBA Director/s to request time to present stock pitch & complete stock pitch
Friday, November 13, Time and Location set up in agreement by group members
Assignment:
Round 1 HBS Finance Simulation
Determine reservation price for Celanese … prepare, analyze, decide by next Monday
Kamm: will check that you have completed round 1 of simulation
*Friday November 20, Professor Kamm, Classroom
In Class:
Discuss When Genius Failed …LTCM, Chapters 13 to End
Essay test over When Genius Failed … LTCM
Assignment:
Rounds 2 and 3 HBS Finance Simulation
Conduct due diligence, can begin negotiating offers, complete simulation prior to last
class day
Friday November 27: Thanksgiving holiday
*Friday, December 4, Professor Kamm, Classroom
In Class:
Group Presentations on Simulation
Assignment:
Write Group Final Paper on Blackstone—Celanese deal (10 to 12 pages plus all exhibits)
Due Date: the following Wed in the finance department, CBA 6.222 by 4 pm.
Write one page review of self and peer evaluations
6
Please note: If any meeting times or dates need to be changed, it will be announced in class or
you will be contacted by email.
Various Class Policies
I. Religious Holidays, Make-ups, and Special Accommodations
Religious Holidays—The University is fortunate to have diversity in its student body including
diversity of thought and practice that includes religious diversity. I do my best to avoid
scheduling major projects around religious holidays but due to the great diversity of practices at
the University, an unexpected scheduling issue may arise. In keeping with University policy I
will excuse you from class on the day that is important for your religion, and if any unexpected
conflict arises, we will make alternative plans. The best way to handle this situation from your
end is to give me advance notice if you see a conflict.
Electronics—I follow the department of finance policy on the use of electronics in class. This
policy states that use of any electronic advices or tools (laptops, cell phones, various MP3
players, I-pod touch devices, etc.) during class is prohibited unless specifically requested by the
professor of the class. This means that laptops are closed and all other devices are put away
prior to the start of class; students shall not initiate nor receive text messages during class nor use
Touch devices. If we need use of computers, we will be in the trading center; in the less likely
event that we are in the classroom and need use of an electronic device, the instructor will make
an announcement. Adherence to this policy facilitates the students’ abilities to process class
material and helps lead to a solid participation grade; failure to follow the policy results in a
reduction in that student’s participation grade.
Test Times—Most often student attendance at exams is excellent. I adopt class policies that
encourage students to keep up on material such that with attendance and solid time management,
students should find themselves adequately prepared to be able to study and take exams. I
strongly encourage that you take exams at the scheduled date. If you know that your schedule is
such that you cannot make the exam time (the best reason is for a university excused reason),
contact me ahead of time to see if something can be arranged. No make-up exam is offered after
the test. If you miss an exam and have a university excused absence, you will be offered a
cumulative exam at the end of the term.
Accommodations—I follow the university policy on special accommodations and am happy to
work with you on this matter. The University of Texas at Austin provides upon request appropriate
academic accommodations for qualified students with disabilities. For more information, contact the
Office of the Dean of Students at 471-6259, 471-4641 TTY. At the beginning of the term or prior to
the first major project or test, please submit to me a letter prepared by the Service office listed
above. Also, it is especially helpful if you email me one to two weeks ahead of the scheduled
test (or project) reminding me of the nature of the accommodation so that we have plenty of time
to make arrangements.
II. Academic Integrity – I follow university policy on academic integrity and include for your
benefit a review of the Policy Statement on Scholastic Dishonesty for the McCombs School of
Business. It says, “By teaching this course, I have agreed to observe all of the faculty responsibilities
7
described in that document. By enrolling in this course, you have agreed to observe all of the student
responsibilities described in that document. If the application of that Policy Statement to this class and
its assignments is unclear in any way, it is your responsibility to ask me for clarification. Policy on
Scholastic Dishonesty: Students who violate University rules on scholastic dishonesty are subject to
disciplinary penalties including the possibility of failure in the course and / or dismissal from the
University. Since dishonesty harms the individual, all students, and the integrity of the University,
policies on scholastic dishonesty will be strictly enforced. You should refer to the Student Judicial
Services website at http://deanofstudents.utexas.edu/sjs/ or the General Information Catalog to access the
official University policies and procedures on scholastic dishonesty as well as further elaboration on
what constitutes scholastic dishonesty.”
III. Class Web Sites and Student Privacy: Please know that I use Blackboard to post your course
packet and relevant course documents and I use either Blackboard or egradebook to post grades
where each student in the class is able to check his or her grade privately. I also use the email
list provided me in Blackboard to send out occasional class emails. From the Fall 2001 Course
Schedule the following paragraph may help you determine any related privacy issues. It states,
“Password-protected class sites will be available for all accredited courses taught at The University.
Syllabi, handouts, assignments and other resources are types of information that may be available within
these sites. Site activities could include exchanging e-mail, engaging in class discussions and chats, and
exchanging files. In addition, class e-mail rosters will be a component of the sites. Students who do not
want their names included in these electronic class rosters must restrict their directory information in the
Office of the Registrar, Main Building, Room 1. For information on FERPA related issues see
http://registrar.utexas.edu/students/records/ferpa/.”
8