Investment Challenge Program

1
Investment Challenge Program
December 2002, Volume III, Issue 11
Investors,
ICP Risk Return for 3-Years Ending September 30,
2002


Hello again. This semester has flown by and it
is almost time for the holiday break. I hope all
of you have enjoyed being a part of the
Investment Challenge Program this semester and I
hope many of you will be joining us again in the
Spring. For those of you graduating from the
program, good luck with all you do and keep in
touch!
Important Announcements

• Brand new guidelines were sent out during
  November and we want to make everyone aware of
  the changes. The new guidelines will go into
  effect January 1st, 2003. Listed below are
  highlights from the changes
• The new maximum allocation to any sector may not
  exceed the sector weight of the selected index
  plus 10.
• The maximum allocation to any one sector may not
  exceed 40 unless the sectors weight exceeds 40
  of a particular index, in which case the
  portfolio is allowed a maximum weight of 110 of
  the particular sectors weight.
• At the time of purchase, no single issue should
  exceed 5 (at market value) of the portfolio for
  portfolios in excess of 150,000 and 8 (at
  market value) of the portfolio for portfolios
  equal to or less than 150,000. Positions will
  be allowed to appreciate to 8 (at market value)
  of the portfolio for portfolios in excess of
  150,000 and 10 (at market value) of the
  portfolio for portfolios equal to or less than
  150,000.
• All portfolios in excess of 150,000 are expected
  to have a minimum of 20 stocks. All portfolios
  that are equal to or less than 150,000 are
  expected to have a minimum of 15 stocks.
• Individual portfolios will now be allowed to
  invest in Real Estate Investment Trusts (REITS)
  to a maximum allocation of 5 of the total
  portfolio.
• The average market-cap of the portfolio is
  expected to be above 10 billion.
• All companies must have a market-cap of at least
  250 million at the time of purchase.
• Universities will be allowed 30 days to fix any
  violation of the above guidelines.
• If you need information on a particular index,
  the BARRA website, at www.barra.com, is a great
  place to start your search. It includes specific
  information on the indices, such as fundamentals
  and sector allocation.

The chart above graphs total return and standard
deviation of individual ICP universities against
the SP 500 for the three-year-period ended
September 30, 2002. The graph provides a visual
representation of how the ICP universities are
performing based on the amount of risk they are
taking. Those universities falling in the upper
left quadrant have both lower risk and higher
returns than the SP 500, while those
universities falling in the lower right quadrant
have both higher risk and lower returns than the
SP 500. Ideally, a university would want to
fall in the upper left quadrant. Those
universities in the upper right hand quadrant,
though outperforming the index, have taken on
more risk than the SP 500.

Website of the Month
The editors of CNN and Money magazine have an
extremely useful website, http//money.cnn.com,
which offers current information on different
investment vehicles, as well as information on
upcoming earnings releases. The site also offers
an IPO center and an investor research center
Quote of the Month
When you do the common things in life in an
uncommon way, you will command the attention of
the world.
-George Washington Carver