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
 Was down 4.3% due to search-engine concerns
 Difficult to separate from competitors
 Club has enjoyed 30% gains
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
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
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
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)
CLUB OVERVIEW
Investment Club
OVERVIEW:
1. Close to $500,000
2. Over 40 stocks
3. Strictly Student Run
GOALS
 1. Manage and Grow Portfolio
 2. Educate Members
 3. Network
WHY INVESTMENT CLUB?
New Ideas
 1. Shareholder Meeting
Ideas
 2. Freshman Investing Crash Course
 3. Wall Street Panel
Ideas
 4. Stock Pitch Battle
 5. WSJ Quiz
Ideas
 6. Mentorship Program
 7. Interview Prep
INTEVIEW PREP
INTERVIEW PREP
 NETWORKING, NETWORING, NETWORKING
 WHAT YOU NEED:



*** STRONG GPA
*** UNDERSTANDING OF MARKETS
*** DESIRE TO LEARN
Wall Street Interview
COURSE WORK:
- Financial Accounting, Financial Theory,
Corporate Finance, ect.
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

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
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
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
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?
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.
RESOURCES
 1. FINANCIAL NEWS OUTLET
 2. MACABACUS. COM
 3. WALLSTREETOASIS.COM
 4. GLASSDOOR.COM
Qualitative Analysis of Tesla
(TSLA)
BY BRENDAN GOVER
Common Qualitative Measures
 Dan Killmurray ’85 (UBS)
 TAM
 Moat
Management
 Management track record/compensation package
 Elon Musk
 Previous/current other business ventures
COMMENTS?
 How can the club improve?
 Suggestions?