course will enable students to be portfolio managers of the Pace University
Student Managed Investment Portfolio, with an endowment of over $100,000
sponsored by the university. Students will research individual companies and
recommend purchases & sales to the full investments committee.
be based on the quality of presentations and critiques -- NOT on
how well the portfolio performs.
Permission of the instructor is required to register for this course. Interested students from the New York campus should come in to see the instructor [in NY, Prof. P.V. Viswanath, Tel. 212 346 1817, Email email@example.com; in Westchester Prof. Ron Filante, Tel. 914 773 3708, Email firstname.lastname@example.org]. Alternatively, submit a brief application with the following information:
This is an exciting opportunity for undergraduate students who have
completed FIN 301 and 351, and for graduate students who have completed FIN 652
and BUS 512. Exceptions could be made for
students with the right background. Send in your
application as soon as possible!
The Focus of the Course will be Fundamental Analysis, i.e. Discounted Cash Flow Analysis. We will use an online text by Aswath Damodaran as a basis for the lecture/discussions as well as for the analysis.
Text: Aswath Damodaran: Investment Valuation, 2001, John Wiley and Sons (http://www.stern.nyu.edu/~adamodar/New_Home_Page/valn2ed/book.htm)
Topics to be covered in the course:
Estimation of Discount Rates (Chaps 7, 8)
Quality of Earnings Numbers (Chaps 9, 10)
Estimating Growth (Chap 11)
Dividend Discount Model (Chap 13)
FCFE Model (Chap 14)
Fundamental Principles of Relative Valuation (Chap 17)
Earnings Multiples (Chap 18)
Book Value Multiples (Chap 19)
If we have time, we will talk about other topics, such as “How to Integrate Fundamental Analysis into Portfolio Theory,” from Bodie, Kane and Marcus.
The challenge will be in how we will integrate
the discussion of the topics and relate them to the actual stocks that will be
Week 1: Discussion of the Logistics of the Course; Division of Responsibilities; Introduction to Telerate and StockVal
Week 2: Introduction to Discounted Cash Flow Analysis
Week 3: Chapters 7: Estimation of Discount Rates
Week 4: Chapters 8: Estimating Risk Parameters and Costs of Financing
Week 5: Chapter 9, 10: Quality of Earnings Numbers
Week 6: Chapter 11: Estimating Growth
Week 7: Chapter 13: Dividend Discount Model
Week 8: Chapter 14: FCFE Model
Week 9: Chap 17: Fundamental Principles of Relative Valuation
Week 10: Chap 18: Earnings Multiples
Week 11:Chap 19: Book Value Multiples
Week 12: Conclusion
After examining the fundamentals of valuation, student groups will make presentations (starting no earlier than the fourth week). There will be no more than two (perhaps one presentation) each week; hence each group will make a maximum of two presentation during the entire semester. We will also have speakers joining us from time to time; based on the availability of these speakers, we will modify the above time-table.