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General Meeting 2

General Meeting 2. 9 .16.2014. Agenda. Announcements Portfolio Update Market Update Lecture: Careers in Finance Pitch: WFM. Officer/SCG positions. Need to meet new officers What do I do now?. Pitch sign ups/Lecture. Pitch sign ups for the 30 th , 7 th , and 14 th Lecture Topics

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General Meeting 2

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  1. General Meeting 2 9.16.2014

  2. Agenda • Announcements • Portfolio Update • Market Update • Lecture: Careers in Finance • Pitch: WFM

  3. Officer/SCG positions • Need to meet new officers • What do I do now?

  4. Pitch sign ups/Lecture • Pitch sign ups for the 30th, 7th, and 14th • Lecture Topics • LBOs • Financial Crisis • Employment • Is a college degree worth the cost

  5. Fall Portfolio Challenge Register at usiteam.org/events • Build and manage your own portfolio • Compete with other McCombs students • Top three winners receive prizes in May $5 entry fee

  6. Announcements Technical Workshops Every Thursday 7-8 CBA4.328 This Week: Multiples Analysis

  7. Announcements

  8. Portfolio Update

  9. Portfolio Update • FNMA (6.96%) – volatile • ACC (6.44%) – Insider selling; giving pass previous gains • BBRY (6.2%) – Announcement of Passport; Earnings coming up on Sep. 26; Acquired Movirtu • GY(4.5%) – Analyst downgrade

  10. Fannie Mae- 6 month

  11. ACC- 3 month

  12. Company Overview - ACC • Largest student housing company • 1st publicly traded student housing REIT • Real Estate Investment Trust • Distribute 90% of income as dividends • Does not pay corporate income tax • $4.2 billion worth of developments • Partners with universities to build both on and off campus properties • Headquartered in Austin

  13. Market Update

  14. Market Performance

  15. Alibaba IPO • What is Alibaba? • Is it larger than Ebay and Amazon? • 2013 transactions totaled $248 bn • More than Ebay + Amazon

  16. Alibaba IPO • Why am I talking about Alibaba? • IPO • Midpoint price range of $155 bn

  17. Alibaba IPO • 1. By buying stock in Samsung you get stock in? • A. The Bundesbank • B. A off shore account in Jamaica • C. Samsung • D. A South Korean Pension fund • 2. By buying stock in Alibaba you get stock in? • A. The Dallas Cowboys • B. Chinese equivalent of social security • C. Alibaba • D. An agency in the Cayman Islands • 3. The largest IPO in U.S. history was? • A. AT&T • B. Visa • C. General Motors • D. Facebook

  18. Freedom!!!!!

  19. United Kingdom • Are England and the UK the same thing?

  20. Folks • Who are these people?

  21. Scottish Independence • What’s going on? • Who’s involved • Why are they doing this? • Why does it matter? YES NO

  22. Quantitative Easing • What is it? • Where is it being employed? • Principal actors? • What’s the big news right now?

  23. May/June 2013 Fed hints at tapering Jan. 2014 Fed begins taper Federal Reserve Assets: Key Dates Nov. 2010 Fed enters QE2, buys $600 billion in securities over seven months Nov. 2008 Fed announces QE1 and starts buying up to $1.7 trillion in securities Nov. 2012 Fed begins QE3 $85 billion pm TWIST March 2010 QE1 ends June 2011 QE2 ends Mortgage backed Securities 2007 2008 2009 2010 2011 2012 2013 2014 Source: U.S. Federal Reserve

  24. QE Tapering • Tapering began in January of 2014 and will continue through October 2014. Quantitative Easing 2014 Tapering

  25. Japanese Quantitative Easing Japan Central Bank Balance Sheet (Billion JPY) • 1999 Japan hits 0% interest rate • 2010 Japan starts QE • August 2011 BOJ increases balance sheet by 10T • October 2011 BOJ increases balance sheet by 5T • April 2013: Abenomics begin 130T over two years • Represents ~23% of GDP Source: Bank of Japan; Trading Economics 26

  26. Monetary Easing in Europe • In Sep. 2014 ECB announces proposal for 1tn Euros of bank targeted initiatives intended to bring balance sheet to 2012 levels: • Proposed program would be 7.8% of the Euro Area GDP • Largest prong is the purchase of over 500bn Euros worth of covered bonds and ABS European Central Bank Balance Sheet (Euro) Source: European Central Bank 27

  27. Introduction to Careers in Finance

  28. Major Fields • Banking • Private Equity • Hedge Funds • Corporate Finance • PWM

  29. Banking • Retail Banking • Commercial Banking • Private Banking • Investment Banking

  30. Investment Banking

  31. Basic Facts • You don’t invest • Long hours • Long weeks • Decent pay • Modeling • Pitch books • Other junk

  32. Fields within Banking • Product Groups • Specialized type of banking • Coverage Groups • Specialized industry of focus

  33. Investment Banking Geography • NYC • Houston • San Francisco • Charlotte

  34. Investment Banking Career Hierarchy

  35. Private Equity • Financial buyers • Utilize methods such as LBOs • Look for turn around of distressed company • Liquidity event • IPO

  36. Hedge Funds • Asset Management • Small teams • Limited number of large investors • Not accessible to public • Typically not undergraduates

  37. Corporate Finance • M&A • Capital Raising • Work focuses on your company

  38. PWM • Managing money • Very relationship driven • AUM fees • Commission fees • Problematic incentives

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