general meeting 2 9.16.2014 usit general meeting 2 9.16.2014 announcements portfolio update market...

General Meeting 2

9.16.2014

USIT General Meeting 29.16.2014

• Announcements

• Portfolio Update

• Market Update

• Lecture: Careers in Finance

• Pitch: WFM

Agenda


• Need to meet new officers

• What do I do now?

Officer/SCG positions


• Pitch sign ups for the 30th, 7th, and 14th

• Lecture Topics • LBOs• Financial Crisis• Employment• Is a college degree worth the cost

Pitch sign ups/Lecture

$5 entry fee

Fall Portfolio Challenge

•Build and manage your own portfolio•Compete with other McCombs students•Top three winners receive prizes in May

Register at usiteam.org/events


Announcements

Technical WorkshopsEvery Thursday 7-8

CBA4.328

This Week:Multiples Analysis


Announcements

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

Portfolio Update


Fannie Mae- 6 month


ACC- 3 month

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

Market Update


Market Performance


Alibaba IPO

What is Alibaba? Is it larger than Ebay and Amazon?

2013 transactions totaled $248 bn More than Ebay + Amazon


Alibaba IPO

Why am I talking about Alibaba? IPO

Midpoint price range of $155 bn


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

Alibaba IPO


Freedom!!!!!


United Kingdom

• Are England and the UK the same thing?


Folks

• Who are these people?


Scottish Independence

• What’s going on?

• Who’s involved

• Why are they doing this?

• Why does it matter?

YES NO


• What is it?

• Where is it being employed?

• Principal actors?

• What’s the big news right now?

Quantitative Easing

Nov. 2008 Fed announces QE1 and starts buying up to $1.7 trillion in securities

March 2010 QE1 ends

Nov. 2010 Fed enters QE2, buys $600 billion in securities over seven months

June 2011 QE2 ends

Jan. 2014Fed begins taper

Mortgage backed Securities

Nov. 2012 Fed begins QE3 $85 billion pm

TWIST

Federal Reserve Assets: Key Dates

2007 2008 2009 2010 2011 2012 2013 2014

May/June 2013Fed hints at tapering

Source: U.S. Federal Reserve


QE Tapering

Quantitative Easing 2014 Tapering

Tapering began in January of 2014 and will continue through October 2014.

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

Fed QE Windown

Fed Purchases ($billions)


Japanese Quantitative Easing

26Source: Bank of Japan; Trading Economics

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

o Represents ~23% of GDP


2008 2009 2010 2011 2012 2013

Monetary Easing in Europe

27Source: European Central Bank

European Central Bank Balance Sheet (Euro)

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

(in millions of Euros)

Introduction to Careers in Finance


• Banking

• Private Equity

• Hedge Funds

• Corporate Finance

• PWM

Major Fields


• Retail Banking

• Commercial Banking

• Private Banking

• Investment Banking

Banking


Investment Banking


• You don’t invest

• Long hours

• Long weeks

• Decent pay

• Modeling

• Pitch books

• Other junk

Basic Facts


• Product Groups• Specialized type of banking

• Coverage Groups • Specialized industry of focus

Fields within Banking


• NYC

• Houston

• San Francisco

• Charlotte

Investment Banking Geography


Investment Banking Career Hierarchy


• Financial buyers

• Utilize methods such as LBOs

• Look for turn around of distressed company

• Liquidity event • IPO

Private Equity


• Asset Management

• Small teams

• Limited number of large investors

• Not accessible to public

• Typically not undergraduates

Hedge Funds


• M&A

• Capital Raising

• Work focuses on your company

Corporate Finance


• Managing money

• Very relationship driven

• AUM fees

• Commission fees

• Problematic incentives

PWM

general meeting 2 9.16.2014 usit general meeting 2 9.16.2014 announcements portfolio update market...

Documents

usit general meeting

bn slide

month slide

austin slide

orgevents slide

market update slide

general motors

market performance slide