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TRANSCRIPT
Introduction & Capital Markets February 1st, 2016
Jade Beguelin (CTO)
New Analyst Training Program
Week One
1. New Analyst Training Program Introduction 2. New Analyst Training Program Expectations 3. Introduction to Capital Markets
Agenda
• 9 Weeks Long • 8 educational presentations • 1 stock pitch and quiz class
• Designed to provide common baseline of knowledge among incoming prospective analysts
• Accounting • Finance • Value Investing • Economics
New Analyst Training Introduction
The purpose of this program is to provide the fundamental information needed to perform financial analysis.
Week 1: Introduction, program expectations, and the basics of capital markets Week 2: Investing, macroeconomics, and pitching Week 3: Accounting I Week 4: Accounting II Week 5: Comparable Companies Analysis Week 6: Time Value of Money and Bonds Week 7: DCF Introduction and Theory Week 8: DCF Construction and Evaluation Week 9: Stock pitch presentation (April 9th, 10th) and final exam (April 11th)
Mondays without training: March 7th (Spring Break), March 28th (Easter Break)
Program Curriculum The following is what will be covered each week.
• 1 Unexcused Absence • Sign in on sign in sheet at every training session! • Must make up any missed work. • All meeting slides will be up on:
http://georgetowninvest.wordpress.com • E-mail [email protected] if you have an absence that you think should be excused
• Satisfactory presentation of the stock pitch and score on final exam.
Graduation Requirements
All prospective analysts must complete the following requirements.
• Analysts will be ranked in three categories: • Outstanding (Top 33% of graduates) • Superior (Middle 33%) • Satisfactory (Bottom 33%)
• Analysts will rank their top three sector preferences • The Executive Board will assign analysts to sectors to ensure equal spread.
• You will now be a full-time analyst with GCI!
Post Graduation Once the program is completed, analysts will be placed into their sectors based on preferences and performance.
• Be engaged. • Ask questions. Training sessions should be open to discussion. • Feel free to chat after the sessions.
• Go to Market Updates! • Cannot stress enough how helpful these can be
• Do recommended reading. • This week: https://www.oaktreecapital.com/docs/default-source/memos/on-the-couch.pdf • Or just Google Oaktree Capital -> Memos from Howard Marks -> 2016 -> On the Couch
How to Succeed What you put into the training program will be what you get out.
Capital Markets
• Process of obtaining funds • Personal Finance • Corporate Finance • Public Finance
• All involve actions such as obtaining credit, managing funds, and covering liabilities.
What is Finance? Finance deals with the process of obtaining funds.
Financial Markets Flow Chart
Financial Markets (Banks)
Lenders (Investors)
Borrowers (Govt’s &
Companies) Securities Returns
Other Markets e.g. FX, Commodities, etc. Capital Markets
Equity (Stocks)
Debt (Bonds)
Capital Capital
Money Markets
• Markets that bring together buyers and sellers of financial assets and valuable goods.
• Broken down into various markets: • Capital Markets
• Used for raising of long term finance
• Money Markets • Used for raising of short term finance (<90 days)
Financial Markets
• Primary Markets • New securities sold from issuers to buyers (think IPO)
• Secondary Markets • Bought and sold among buyers
Types of Capital Markets
The types of capital markets are primary markets and secondary markets.
• Represent ownership stake in a company • Broken down into Common and Preferred Stock
• Preferred • Have a greater claim to a company’s assets • The first to receive dividends, usually include a fixed dividend as a fraction
of par value. • Hybrid security between a stock and a bond.
• Traded on stock exchanges (NYSE, NASDAQ)
Stocks
• Loans for a defined period of time that pay a fixed or variable interest rate.
• Fixed payments are known as coupon payments. • Coupon Rate = Annual Coupon Payments / Face Value of Bond
Bonds
Stocks • Ownership claim • Weak claim on company assets • Generally higher returns
Bonds • Lender claim • Strong claim on company assets • Generally lower returns
Stocks vs. Bonds
Georgetown Collegiate Investors