Investor Information

December, 2011

Dear Investors,

During the Fall 2011 semester 18 members (“analysts”) were part of the Student Managed Fund and they were grouped into four teams. Through our management of the undergraduate fund we were able to develop important new skills that are crucial to success in the financial industry, skills such as learning how to value companies through quantitative and qualitative analysis, how to construct a well balanced portfolio and how to analyze performance through different analytical measures. The experience has also allowed us to recognize some of the attributes that separate successful businesses from unsuccessful ones. Furthermore, our work in the Fund has served to further develop our communication, teamwork and presentation skills. 

During this past semester the SMF has invited guests from the financial industry which has not only provided us with insightful information on how to manage our fund but most importantly what a career path in the investment world is like, and how to better prepare for it. Some of our events this semester have been:

  • Bloomberg Terminal Training Sessions with Professor Atreya Chakraborty
  • BNY Mellon Wealth Management – Presentation by Mr. Ted Webster, Senior Portfolio Manager and Vice President
  • State Street - trading floor tour and presentation by Senior Vice President, Mr. Nick Bonn
  • Bank of America Global Investments - tour and presentation by Mr. Paul Quistberg, Chief Investment Officer
  • UMass President’s Office – Presentation by Mr. Douglas Cliggot from Credit-Suisse and UMass Foundation

A group of young investors in the Cambridge area who have set up an IRS approved club,
Called the “Young Skitz Investment Club” invited Kostian (SMF President) to one of their meetings where he offered advice and ideas on how the SMF is organized and how to make more informed investment decisions, the students in the club ranged from grades 5-10.

Looking ahead to next semester we will implement a more mechanical and rigorous approach towards identifying opportunities, evaluating them and placing stop losses and profit targets based on current market volatility and economic situation on the global scale. Our hybrid approach will focus on financially healthy companies while determining an optimal price and determining allocation and exit strategies as outlined on “The Complete TurtleTrader: The Legend, the Lessons, the Results” by Michael W. Covel who reveals the true story of Wall Street legend Richard Dennis who taught a group of ordinary people, his “Turtles” how to invest by strictly following a few simple rules.

As in our previous report, our economic outlook remains positive but cautious. Though the recent improvement in economic indicators is a good indication that the economy is on track to recovery, we must remain wary of the possibility that an overconfidence bubble has formed, especially with regard to financial markets and security values.

SMF Management