42916/42442: Thursdays 5:35 p.m. to 8:15 p.m.
at the New York campus, Rm W404 (G-PACT room)
Email: pviswanath@pace.edu
Tel: (212) 346-1817
Webpage: http://www.pviswanath.com
Blackboard: http://blackboard.pace.edu
| Office | W486, Pace New York |
| Office hours: | Tuesdays, 3:30 to 5:30 p.m.; Thursdays, 2:30 p.m. to 5:30 p.m.; and by appointment Note: I am in my office most of the week; send me e-mail, give me a call or just drop by! |
This course deals with the valuation of corporate securities, primarily stocks, for the purpose of making investment decisions for a student-managed portfolio, funded by university monies. Students will learn about the techniques of investigating and valuing stocks. Most of the course will be devoted to the valuation of stocks based on fundamental analysis, paying attention to the macro-economy as well as to firm-specific issues such as industry characteristics, quality of accounting numbers, forecasting growth and using appropriate discounted cash flow and relative valuation models.
The Lubin School currently has several courses, such as FIN 320, FIN 351 and ACC 360 that explain the accounting and financial concepts relevant to asset valuation. These courses also explain how these concepts would apply to actual firms. The present course would go one step further, by bringing all these principles together in the valuation of actual corporate securities, primarily stocks and following through with buy/sell decisions. Such a course gives the sort of hands-on experience that is crucial for students to, on the one hand, ,learn effectively, and, on the other, to convincingly present themselves as qualified candidates for jobs in finance fields, such as Mergers and Acquisitions, Stock Analysis, Portfolio Management and others.The Focus of the Course will be Fundamental Analysis, i.e. Discounted Cash Flow Analysis.
It is also envisaged that there will be guest speakers, mainly equity analysts, who will be invited about a couple of times per semester. During Spring 2002, speakers included Professor Aswath Damodaran of NYU, Mr. Jason Graybill of Abner, Herman & Brock Asset Management, and Mr. Jack Salzman of Kings Point Partners. In Fall 2002, we had Larry Zicklin, current Chairman of the Board (and former CEO) of Neuberger Berman, Jack Rifkin, Director of Research at Neuberger Berman (and former head of research at Salomon Smith Barney), John Longo, a portfolio manager at Cyborg Long/Short Fund, and James Morris, stock analyst at Utendahl Securities.
The challenge will be in how we will integrate
the discussion of the topics and relate them to the actual stocks that will be
picked.
After examining the fundamentals of valuation, student groups will make presentations (see Course Outline). 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.
Since this is an advanced course in Finance, you will be expected to do a lot of reading on your own. Class meetings will be an opportunity to discuss the issues raised in the relevant textbook chapters, and to engage in exercises designed to improve understanding of finance concepts. Here are two examples of how this will be done. One, I will assign very recent Wall Street Journal articles, which you will read and comment on. Two, you will use the G-PACT (Global Portfolio Analysis Center; W404) and other resources to research and report on a selected company; you will analyze and apply the various principles you will learn in the course, to this company.
I believe this course will be a very exciting course. However, given that we will be investing real dollars, it is a serious course. For those who are willing to work at it, the end results should be worth it. So let's work together as a team, and go for it!
Text: The primarily text will be Aswath
Damodaran, Investment Valuation,
John Wiley and Sons, Second Edition, 2002.
Students will be expected to keep abreast of economic and financial news
by reading periodicals such as the Wall Street Journal, Investors Business Daily
and the Economist. They will also
extensively use programs such as StockVal and Telerate, as well as Internet
websites such as http://www.marketguide.com
and http://finance.yahoo.com to research
the stocks. Professor Damodaran
also maintains a website with up-to-date information, which students will use.
The text is also supplemented by notes on my website.
In this course, you will need to use the computer and the Internet a lot.
You should also obtain a Pace e-mail address as soon as possible, so that I can send you e-mail. Any student's Pace e-mail address can be obtained by going to the Contact Pace section of the main Pace Home Page (the default password is the student’s Pace Identification Number). More information about e-mail address, etc. can be obtained from the DoIT website. Even if you have another e-mail address where you wish to get your e-mail, you should still get a Pace e-mail address. Once you have your Pace e-mail account and password, you can go to the Pace University Student E-Mail Server at http://stmail.pace.edu and have your e-mail forwarded to your preferred e-mail address. You can find information on how to have your mail automatically forwarded at http://www.pace.edu/DoIT/forward/. The only way that I can communicate with you is through your Pace e-mail account. Hence, you should get your Pace account information as soon as possible.
Check your e-mail and the SMIP website on a regular basis. This will enable you to get the maximum from the course. I am available for consultation by e-mail at pviswanath@pace.edu. I check my e-mail practically every day, and, in most cases, you should get a speedy response to any questions.
We will also be using Blackboard as a gateway for some aspects of the course. Please log in to Blackboard at the earliest opportunity. Blackboard login procedures can be found on the appropriate Blackboard site. Essentially, your login ID for Blackboard will be your email ID, and your password will be your 9-digit social security number (for more details, go to the Blackboard site).
Class attendance is mandatory; because of the collaborative nature of the course, it is very important that you attend every class meeting; ten percent of your course grade is for attendance. You should also bring a calculator to all class meetings.
I also suggest strongly that you read the Wall Street Journal and/or the business section of the New York Times on a regular basis. If you wish to subscribe to the Wall Street Journal, you can do so from the SMIP Class Page. If you have access to the Economist, I suggest you read that, as well. There is no publication that gives as much in-depth coverage to so many issues!
Assignments are a critical part of the course, and will mainly be done in teams. Each team may consist of three to five members. I expect you to form your own teams. (However, if need be, I will assign students to teams, depending upon the need, as I perceive it.) By the beginning of the second week of classes, each team should give me a filled-out copy of the Team Contract. The team contract should be filled out in full, and should be signed by all team members.
Although assignments will be turned in by the team as a unit, I expect all members of a team to participate equitably in the work involved. I also expect each member of the team to work on each project; this is also in your own interests because the assignments are useful preparation for the exams. Every project submitted must also include a listing of which parts of the assignment were worked on by which team members. Whether or not a given team member worked on a specific part of the assignment, s/he must be familiar with the entire assignment that is turned in. I also expect each team member to have a copy of the final version of the submitted assignment; if any team member does not have a copy of the final assignment and/or s/he is not familiar with any part of the submitted assignment, I will reduce that team member's grade for that assignment. You may also use teams for joint learning and study: that is up to the members of each team. Teams may also want to assign members on a rotating basis to keep track of whatever is posted on the Web. However, each student is separately responsible for the material that is put up on the Web. Failure of the designated team member to fulfill his/her duties will not absolve any team member of the responsibility to keep up-to-date vis-a-vis class activities on the Web, or off.
Any student taking this course is presumed to agree to abide by the statement on academic integrity, as described on pages 62-63 of the 2000-2002 Undergraduate Catalog. It is your responsibility to get a copy of this catalog, which can be obtained from Lubin Undergraduate Academic Advisement.
As of now, I do not plan to give any exams. The most important part of the course will be class presentations -- your grade will be based on your class presentations as well as on your comments on other teams' presentations. However, I am not ruling out some quizzes or, at least, some class-based exercises to facilitate learning.
On my webpages, you will find recent media articles. From time to time, I will add to this list. There are several reasons why you should look regularly at these pages.
The password, necessary to access the Media Articles section will be announced in class, and can also be found at the Blackboard website. In case of emergency, you can contact me for the password.
Discussion Board (Blackboard):
We will also be using Blackboard for out-of-class discussion. Both in-class and out-of-class discussion is very important in this course. Simply being in class and listening to the points being made will go a long way. Hence, ten percent is assigned to simply being in class on a regular basis. Of course, it would be quite unfair to benefit from others' discussions without contributing, and would ultimately lead to very little discussion. Hence, an additional twenty percent of the grade is assigned to such participation.
Your final grade will be determined as follows:
| Factor | Impact on grade |
| Class presentations | 30% |
| Write-ups | 40% |
| Class participation (including Blackboard discussions) | 20% |
| Attendance | 10% |
Letter grades will be assigned as follows:
| Course Grade | Quantitative Class Score |
| A, A- | 90%-100% |
| B+, B, B- | 80%-89.99% |
| C+, C | 70%-79.99% |
| C-, D+, D | 60-69.99% |
| F | 0-59.99% |
Note that the minimum and maximum quantitative scores for plus and minus refinements to the letter grades will be at my discretion. These will be partly determined by the distribution of student scores within each letter grade category. I place a high value on effort; at my discretion, I will raise your grade one notch if I feel that you have tried hard to satisfy all the requirements of the course.
FIN 647 (for graduate students) or Finance 320 (for undergraduates), which deal with Corporate Financial Analysis, is a prerequisite for this course. Hence, most of our students will be Finance majors. However, non-finance majors, such as Accounting students and Marketing students who are interested in the marketing of financial services, are welcome as well. Other Lubin majors who can demonstrate the necessary competence may also consider taking this course. Permission from me is required, in addition. As an absolute minimum, you should have the following competencies.
On the index card handed out in class, please fill in the information requested below, making sure to number the item that you are responding to. Leave space on the top right hand side for a photograph.