Investment Management Club

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Investment Management Club

• Meeting 1 Club and Industry Overview
• September 16, 1999

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The Investment Management Club at Sloan is
dedicated to providing a forum for Sloan students
who are interested inlearning about and pursuing
a career in investment management. The club holds
regular meetings in which students discuss
current market conditions, specific stock
recommendations, and a host of other investment
related topics.The Investment Management Club
offers hands-on experience to students interested
in managing money through itsinvestment
management fund. Investment Management Club
officers solicit applications from students and
select portfoliomanagers that collectively
manage the fund. Through this and other programs,
the Investment Management Club betterprepares
students to succeed in interviews and summer and
full-time positions in financial services
companies.
IMC Club Mission
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Agenda

• Club Officers
• Clubs Plans
• Club Resources
• Investment Management Industry Overview

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Club Officers

• Co-Presidents
• Julianne DiCenso jdicenso_at_mit.edu
• Kyongsoo Noh knoh_at_mit.edu
• Portfolio Mangers
• Janet Staab
• John Wu
• George Mussalli
• Chris Tapia
• Craig Sprosts

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IMC Clubs Plans

• Meetings Thursdays 12-1pm
• Meeting Structure
• Market Update
• Portfolio Update
• Education
• Market Education
• Stock Pick Instructions
• Modeling Instructions
• Company Overviews
• Industry/Stock Pick Presentation
• How to Interview

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IMC Clubs Plans

• Speakers/Events Planned
• What is Buy Side presented by Fidelity
  Investments - Sept 29 lunch
• Financial Services Boutique - Oct 18 pm
• How to do a Financial Model - Nov 2 pm
• Value Creation presented by Putnam Investments
  - Nov 17 pm

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IMC Clubs Plans

• Speakers/Events Planned
• Eric Jensen from Invesco on Quantitative Research
• Overview of Fixed Income presented by JP Morgan
• Warren Buffett - April 20

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IMC Club Resources

• Web Site http//web.mit.edu/sloanimc/index.htm
• Resume Book
• Buddy System
• NYC trip - October 11?
• Interview Preparation - Nov/Dec
• CRC Library
• Dewey Library

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Investment Management Overview
Need Money Companies Governments Govt
Agencies Individuals Other
Have Money Mutual Funds Pension
Funds Individuals Other
Intermediaries Investment Banks Commercial
Banks Brokers/Dealers Other
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Some Notable Buy Side Firms

• Mutual Funds
• Putnam Investments
• Fidelity Investments
• Wellington Management
• MFS
• American Century
• American Funds
• State Street Global Advisors
• Vanguard
• T Rowe Price

• Hedge Funds
• Soros Funds
• Tiger Funds
• Long-Term Capital (!)
• Kingdon Capital
• Dawson Samberg
• Appaloosa

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Some Notable Sell Side Firms

• Investment Banks
• Merrill Lynch
• Goldman Sachs
• Morgan Stanley DW
• Lehman Brothers
• DLJ
• Niche Players
• Raymond James
• Hambrecht Quist
• Adams, Harkness, and Hill

• Universal Banks
• JP Morgan
• Deutsche Bank
• Citigroup (Salomon Smith Barney, Citibank and
  Travelers)
• NationsBank/Bank of America
• CS First Boston
• UBS/SBC

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An Insiders View
Mutual Fund (Buy-Side)
Investment Bank (Sell-Side)
Research Analysts
Analysts
Research Sales
Portfolio Managers
Traders
Traders
Sales Traders
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Example of the Process
Goldman Sachs
Research Sales Buy amazon.com
Technology Analyst Buy amazon.com
Fidelity Asset Management
Executes trades
Sell amazon.com
Portfolio Manager A Growth Fund
Technology Analyst Buy Microsoft Sell
amazon.com Hold Intel
Trader
Buy Microsoft Buy amazon.com
Portfolio Manager B Technology Fund
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What can Mutual Funds Buy?
Decreasing Risk
Increasing Risk
Money Market
Convertible Bonds
Common Preferred Stocks
Bonds
Income Funds
Growth Income Funds
Growth Funds
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What are Some Types of Funds?

• Open-ended vs. closed-end funds
• Actively-managed vs. passively-managed
• Regional funds (e.g., emerging markets)
• Sector funds (e.g., healthcare, technology)
• Mutual funds vs. hedge funds

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What are Some Investment Styles?

• Fundamental analysis of historical and forecast
  financial performance to assess whether a stock
  is under- or overvalued
• Technical research into the demand and supply
  of securities based on trading volume and price
  studies (not concerned with financial position of
  the company)
• Value Look for beaten-down, ignored and/or
  relatively undervalued stocks (e.g, turnaround
  stories)
• Growth Look for stocks that are expected to
  exhibit faster-than-average gains in earnings
  and/or cash flows
• Momentum Look for pattern of changing growth
  rates of X (earnings per share, revenue, stock
  price, etc.) from one period to another, which
  usually causes the stock price to go up