Advanced Practicum in Investment Management (FBE453a and

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Advanced Practicum in Investment Management (FBE453a and FBE453b), aka, USC
MARSHALL Undergraduate Student Investment Fund (USIF) Program
FBE453ab is the capstone class of the USC Investment Management program. With the
generosity of Catherine Nicholas and other donors to the University, the USIF program was
established in 2008. As of April 1, 2011, the total assets under management for the USIF was
about $600,000.
Who should take this course?
Would you like to be one of a select 16 students who will manage a portion of the University’s
equity endowment? You will experience an extraordinary learning opportunity from real money
management and dialogues with successful investment professionals. If you are interested in
careers in equity research or money management or financial consultancies, you should consider
applying for this year-long course.
The deadline for SIF 2013 applications has been extended to January 31, 2012. Download
the application at http://classic.marshall.usc.edu/fbe/cis/usif/getinvolved.htm
Below are select firms that the USIF alumni are currently working at
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Sell-side firms: Bank of America, Barclays Capital, Deutsche Bank, Citi, Credit
Suisse, Houlihan Lokey, Imperial Capital, J.P. Morgan, Jefferies, Macquarie Capital,
Morgan Stanley, Piper Jaffray, Societe Generale, Stifel Nicolaus, UBS, Union Bank,
US Bank
Buy-side firms: Beverly Hills Investment Co, Blackrock, Citadel, Lombardia Capital
Partners, PIMCO, Relational Investors
Consultancies: Bain & Co, Deloitte Consulting, KPMG, L.E.K Consulting, PwC,
Simon-Kucher & Partners
What will you learn in this course?
You will gain real life experience for a future career in equity research and/or investment
management. Specifically, you will learn applied valuation and financial analysis, contemporary
portfolio theory and practice, as well as behavioral finance. You will get to learn the analytical
framework for the valuation of stocks and bonds, risk management, portfolio optimization, and
performance attribution. You will be a real money manager and produce industry reports,
company research reports, and stock pitches. The Annual Report will reflect your record of
achievement. The FBE453ab class is taught by Professor Suh-Pyng Ku.
The purpose of this course is fourfold:
1. To provide a select group of up to 16 undergraduate students with hands-on experience
in managing a portion of the University’s equity endowment;
2. To provide an academic background for the consideration and appreciation of security
analysis and portfolio management through assigned and self-selected readings;
3. To enhance your academic experience through interaction with individuals and
institutions engaged in the money management business; and
4. To produce and present an Annual Report which will provide a record of achievement in
each of these areas.
The primary activities and assignments include the following:
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Fund Management: In addition to active portfolio management, the student managers are
responsible for creating investment screening templates, building valuation spreadsheet
models, developing portfolio tracking and financial reporting templates, and refining stock
pitching tear-sheet templates.
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Portfolio Updates and Briefings: Portfolio briefings and updates are designed to provide
opportunities for all fund members to be very active in the fund management, to stay
abreast of what is going on with the other sectors, and to understand what the other
managers are thinking with respect to the market.
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Annual Report & Annual Meeting Presentation: The fund-based presentation includes a
15-minute presentation and a 30-minute Q&A.
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Stock Pitch: This consists of a three-minute verbal presentation and a seven-minute
Q&A. Students will also participate in the grading of this exercise.
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Industry Report: This assignment is designed to give students an opportunity to profile an
industry by analyzing its strategic challenges and identifying investment opportunities in
the industry today and in the next five years.
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Company Research Report: The company research report is a logical extension of the
industry reports. These company reports are an important foundation for analyzing and
recommending stocks for purchase or sale.
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Professional interaction: Students will interact with individuals and institutions engaged in
the money management business. USIF 2012 will meet professionals from 300 North
Capital, Barrington Partners, Canyon Capital, Dimensional Fund Advisors, Fidelity
Investments, Franklin Templeton, Lombardia Capital Partners, Vericimetry Advisors LLC,
TCW, Tradewinds Global Investors, Wilshire Associates.
Course Materials:
1. Required reading:
 Bodie, Zvi, Alex Kane and Alan J. Marcus, Investments, McGraw-Hill Irwin, 9th
Edition, 2011.
2. Optional reading:
 This Time is Different: A Panoramic View of Eight Centuries of. Financial
Crises,http://www.nber.org/~wbuiter/cr1.pdf, by Carmen M. Reinhart and Kenneth
S. Rogoff
 The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard
Marks
 Boomerang: Travels in the New Third World by Michael Lewis
 A Random Walk Down Wall Street: The Time-Tested Strategy for Successful
Investing byBurton G. Malkiel
 Inventing Money: The Story of Long-Term Capital Management and the Legends
Behind It by Nicholas Dunbar
 Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
by Nassim Nicholas Taleb
 Irrational Exuberance by Robert J. Shiller
 Investment Illusions: A Savvy Wall Street Pro Explores Popular Misconceptions
About the Markets by Martin Fridson
 Big Deal: Mergers and Acquisitions in the Digital Age by Bruce Wasserstein
 Den of Thieves by James B. Stewart
 Liar's Poker: Rising Through the Wreckage on Wall Street by Michael Lewis
 Reminiscences of a Stock Operator by Lefevre, Edwin
 The Wall Street Journal, Barron's, Business Week, Economist, Forbes.
3. Select valuation and portfolio management tools include Bloomberg, Capital IQ,
Morningstar Direct, WONDA, Goldman Sachs Research Reports, Northern Trust Capital
Markets Assumptions Working Group Research Reports, and Oaktree Capital
Chairman’s Memos.
Class time: Mondays from 2:00-5:50pm in Bridge Hall Room 203
Who are the current USIF managers? And, what are their roles?
The USIF 2012 fund managers are:
Sean Andrews
Peter Bartholomew
Meixi Chen
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Andrew Chia
Brian Esmond
Watson Lau
Charles Liao
Henry Lin
Catherine Quinn
Neil Schreiber
Bonnie Wu
S&P 500 Sector Teams:
Each of the S&P Industry teams consists of two to three student analysts who are in
charge of one of the ten S&P industry sectors. These analysts are in charge of close
monitoring of sector and company trends, presenting buy/sell recommendations to
the fund managers and investing their capitalization-weighted share of the Fund’s
capital.
Sectors
Sector Specialists (S&P 500 Sector Teams)
Consumer Discretionary
Sean Andrews, Andrew Chia, Catherine Quinn
Consumer Staples
Henry Lin, Neil Schreiber
Energy
Peter Bartholomew, Brian Esmond
Financials
Peter Bartholomew, Bonnie Wu
Healthcare
Meixi Chen, Neil Schreiber
Industrials
Meixi Chen, Watson Lau, Charles Liao
Information Technology
Charles Liao, Henry Lin
Materials
Brian Esmond, Watson Lau
Telecommunications
Catherine Quinn, Andew Chia
Utilities
Sean Andrews, Bonnie Wu
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Operational Structure:
The fund management and operational structure was created to address logistical
issues, ranging from trade execution to portfolio reporting and accounting to risk
management to operations & compliance to marketing and recruiting. Each fund
manager self selects their operational responsibilities.
Who are qualified to apply for this course?
If you are a Marshall incoming senior and have completed BUAD306, and will complete FBE421
by the end of spring semester, and that your GPA is 3.0 or higher. View the USIF Information
Session presentation at http://classic.marshall.usc.edu/assets/147/24473.PDF
Who to contact for follow up questions?
Send email to 2012USIF@gmail.com or investment@marshall.usc.edu
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