Student Managed Investment Fund

Bucknell University College of Management

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September 27, 2011

Today in Class:

Buy/Hold/Sell

  • EFA (Michael Sena): Uncertainty in the European and Far East regions, which compose a large majority of the holdings in this ETF, and negative holding period return (HPR) on a large number of the holdings as well.  Motion to sell entire position passes.
  • VDE (Toby Davis): HPR has been -16% since February, however, this security is largely a play on oil prices and with forecasted energy growth in China and India we believe the best decision is to hold until oil prices reach $90/barrel.
  • BLV (Vince Mistretta): This fund is composed of high quality U.S. credit with an attractive return.  Interest rate risk is too high for our fund due the very long duration, thus the class decided to sell our entire position.
  • IBM (Brad Mas): hold.  The company has been showing very strong revenues and has posted a 100% return over the past three years versus near 0% for the S&P 500.
  • HYG (Vince Mistretta): There is an undesirable amount of volatility in this ETF and it does not track its index well either, thus the class decided to sell our entire position.

Access full minutes here: 09-27

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September 22, 2011

Today in Class:

Michael Sena briefed the classroom on a new technology the class could use to speed up votes, rather than using pens and paper.  Clickers are provided by the Bucknell University Library and display voting results instantly on the in-class projector.

The econ committee reported on the current US consumption, investment, governmental spending, net exports, and GDP numbers.  We expect consumption to rise by 2%; residential investment to remain stagnant and non-residential to improve modestly; government spending to contract this year and then increase at a slower rate over the next five years; net exports to increase by around 4% due to a weak American Dollar, and for GDP to grow by around 1.3% over the next year.  We are bearish overall.

Sector Updates:

  • Energy – Oil is down and energy as a whole is not forcasted to grow.
  • Financials – These should continue to remain depressed for the foreseeable future, and special attention should be payed to Europe.
  • Utilities and Consumer Staples – These will ride out the market, the class plans to overweight.
  • Materials – Investment decisions will depend on the strength of the U.S. Dollar.
  • Consumer Discretionary – As the economy grows slowly or not at all, we should expect to underweight consumer discretionary stocks.

The class discussed the possibility of a double dip recession and decided that over 2% GDP growth is necessary for sustainable job growth.  Housing should be monitored as it will most likely lead us out of the current period of depressed growth.

Buy/Hold/Sell

  • TEVA (Monica Wu): Recommendation is to hold.  The class noted that margins are down so growth will be hard, there have been no recent brand-name drug approvals, and that sales are down.  However, market data showed that out of 28 analysts, 22 said TEVA was a strong buy, so despite general consensus to sell, the class ultimately decided to hold in hopes of being able to sell TEVA at a higher price.

The PG limit order buy 100 shares at $61.16 and KO limit order buy 100 shares at $69.51 both have executed.

Access the complete minutes here: 09-22

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September 20, 2011

Today in Class:

Students were assigned to sector committees based on the S&P 500 to present within the next two weeks on the outlook for that sector and determine an appropriate sector allocation in the portfolio.  Further changes were proposed to enhance the detail taken in minutes.  The professors announced that Frank Schreiner would visit the class on October 6th.  The accounting committee presented their weekly report, drawing attention to the fact that the fund was still overweight financials and consumer staples.

Buy/Hold/Sell:

  • Monica Wu – TEVA: More issues centered on uncertainty of TEVA’s generic drug pipeline have forced one more look at this company, scheduled for next class.
  • Henry Huang – PG: Proposed to buy 350 shares at $62, but the motion failed.  The class considered whether KO was a better buy in the consumer staples sector before ultimately deciding to buy 100 more shares of PG at a $61.16 limit order.
  • Thomas Brown – EMB:  A proposal to sell due to credit and interest rate risks failed, as did one to buy due to preferable yield.  Class settled on holding due to the diversity of holdings and exposure to emerging markets.
  • Brendan Smith – TIP: hold.
  • Alec Jacobs – VTR: hold.  There was some concern over the REIT’s low return but no alternative investment was proposed at the time.
  • Jason Katz – VZ: hold, Verizon is one of the best performing telecoms on the market.
  • Erin Reddy – KO: recommended a hold but further discussion revealed a desire to accumulate because of Coke’s excellent exposure to emerging markets, which the portfolio currently lacks.  Similarly to VZ, it is a better performer than its competitor, PepsiCo.  The ultimate decision was to place a limit order for 100 more shares at $69.51

Access full meeting minutes: 09-20am and 09-20pm

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September 15, 2011

Today in Class:

New procedures for taking and approving minutes were implemented to increase value for our stakeholders.  The accounting committee presented that the beta of our portfolio was 0.61 compared to the S&P 500.

Buy/Hold/Sells

  • Andrew Van Valkenburg – JPM: hold to price target of $41, possibly into 2012.
  • Jordan Donaldson – GE: hold to price target of $18, possibly purchase more at $15.
  • Ryan Tomasello – FSTR: hold to watch litigation.
  • Mark Ayoub – GIS: motion to purchase 200 additional shares.
  • Monica Wu – TEVA: hold due to uncertainty about company operations.

Download full class minutes: 09-15

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September 6, 2011

In Class Today:

The Accounting committee reported that the fund currently was overweight financials and due to the current market conditions this position was inadvisable.  The BWX discussion from the previous class concluded with the analyst’s recommendation to sell the holding.  Gajendra, Will, and Ryan presented their Buy/Hold/Sell’s, respectively, hold Consolidated Edison (ED), sell iShares MSCI Emerging Markets Index Fund (EEM), and hold Foster (FSTR).

 

Access the full class minutes here.

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September 1, 2011

In Class Today:

Buy/Hold/Sell Presentations were done by Dave, Lindsey, Brendan, Arvi, Stefanie, Alex, and Gajendra.  They recommended, respectively, to Hold Aflac (AFL), Hold BlackRock (BLK), Sell Barclay’s Capital International Treasury Bond Fund (BWX), Hold Chevron (CVX), Hold Diageo (DEO), Hold Ebay (EBAY), and Hold Consolidated Edison (ED).

All votes were completed as recommended except for sell BWX and hold ED, which were moved to the next class meeting.

 

Access the full class minutes here.

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August 30, 2011

In class today:

  • Created a new email list and class contact list,
  • Went over professor Needham’s and Jensen’s expectations of the class,
  • The accounting committee reported on the current asset allocation and subsequent summer updates, and
  • Jeff, Oliver, and Aleem presented Buy/Hold/Sell’s on American Express (AXP), Bristol-Meyers-Squibb (BMY), and Celgene (CELG), respectively.

Access the full class minutes here