ST. BONAVENTURE UNIVERSITY

      School of Business

Jim Mahar          

Finance 410 – Students in Money Management

“SIMM”

                                                                                                                                                           

 Fall 2013

 

Class times:  M and W 4pm Dee financial services lab

                                                                                                                                                                                    Instructor Information

Jim Mahar

Contact Information

Online whenever...

Google account for sharing files : jim.mahar@gmail.com

     

Course Description and Objectives

The primary purpose of Students in Money Management is to provide business students an opportunity to experience firsthand the management of a real investment portfolio.  Using money donated by alumni and others, students will be responsible for determining and monitoring overall asset allocation, for selecting individual equity and fixed income investments that conform to the investment policy statement (see attached), and for managing administrative issues.  An advisory board composed of industry professionals and alumni provide oversight and guidance.  Students enrolled for the class are responsible for reporting performance and other portfolio information to the advisory board.  Grounded firmly in the Chartered Financial Analyst (CFA) common body of knowledge, this course will draw on and develop a student’s spreadsheet modeling skills and require students to develop a formal buy or sell recommendation on a stock of their choosing supported by the analyses and models covered in the course.

Applicable Program Objectives

For specific program goals please see Program Objectives:

Finance 410 is an elective course for finance  majors, and supports the program learning goals and objectives as shown below:

Program Learning Goals

Objectives

Course

Goal 1 – Franciscan Values:  Our graduates will understand the relevance of Franciscan values in their professional lives.

1.     Our graduates will relate Franciscan values to contemporary business practices.

2.     Our graduates will apply an ethical framework to decision making.

We will discuss ethics throughout the course.

Goal 2 – Critical Thinking:  Our graduates will be critical thinkers.

1.     Our graduates will identify problems, select and apply appropriate problem-solving techniques, and use appropriate decision making skills to make a recommendation.

Finance classes are inherently about decision making as well as recommendations.  In this class we will do this in every buy/sell decision.

Goal 3 – Effective Communication Skills:  Our graduates will be effective communicators.

1.     Our graduates will produce professional quality written business documents.

2.     Our graduates will create and deliver professional quality oral presentations.

Students will be responsible for presentations almost every week.  

Goal 4 – Global Perspective:  Our graduates will have a basic global perspective.

1.     Our graduates will demonstrate a basic knowledge of international business issues.

Financial markets are inherently linked and thus international finance is central to the class.  Additionally, some of our holdings are international assets.

Goal 5 – Knowledge of Business Disciplines:  Our graduates will have a fundamental knowledge of business disciplines.

1.     Our graduates will demonstrate an  understanding of basic business disciplines and concepts.   In finance this means that students will understand valuation, capital budgeting, capital structure, time value of money, market efficiency, and derivative basics.

To value a firm, one must understand all aspects of a firm.  Thus, SIMM uses all other business classes.

This course should synthesize many of the finance program goals located at http://ms.sbu.edu/SLAP_goals/slap_goals/Finance.doc

                   Upon completion of the course, the student will be expected to:

1.           analyze an industry and a company’s position within that industry

2.           identify a company’s competitive advantage

3.           use the industry analysis, company positioning, and competitive advantage to develop forecasts for purposes of valuation

4.           value a company using several different techniques

a.           dividend discount models

b.           free cash flow forecasting

c.           market multiples

d.           residual income models

5.           create buy and sell recommendations based on company analysis and valuation models

The structure of this course is quite unique.  It is a student-run investment portfolio organized much like an independent money management firm with a management team and different functional areas.  Therefore, the progress of the fund and the implementation of the investment strategy (determinants of your grade) rely heavily on your initiative.  You will be expected to be proactive and operate with limited guidance.  This setting offers opportunity to be innovative and creative in your approach, and to learn from outside sources, such as industry professionals.   Unlike a traditional class, much of your direction will come from the management team instead of the instructor.  Let’s roll!

Prerequisites and Technology Requirements

FIN 301.  Students should have a basic understanding of the time value of money and the functioning of financial markets.  You should have a sound familiarity with MS-Excel and an understanding of how to manipulate data, formulas, and functions within MS-Excel.

Grade

Because the Student Investment Fund is organized as a stand-alone money management firm, different students have different responsibilities.  Students are evaluated based on how well they fulfill the responsibilities associated with their position.  Analysts for example will be graded on the quality of their presentations of buy-sell recommendations, the depth of their industry analysis, and how well they implement the valuation techniques developed in class.

Participation  and reports (Quality and Quantity)                                50% (undergrads are expected to pitch at least three stocks and do one report on some topic that will improve SIMM or a book report)

Bloomberg Certification                                                                  10%

Attendance                                                                                   10%

Test 1                                                                  5%

Test                                                                                                15%

Final Report                                                                                       10%            

However because we only meet a few hours a week, and much of the participation is outside of class, so as a new part of the class students are required to submit bi-weekly self evaluation report./ This will be used as part of the participation grade and to document what each student does.  We will discuss this in class.

Late Assignments and Exams

This class is designed to parallel real world experience in the investment management profession.  As such, it will be a tremendous learning experience that will help increase your marketability in the labor market.  Therefore, no late assignments will be accepted.  So plan ahead.

Grading Scale

Exams and stock reports will be assigned a grade according to the following grading scale.  The student’s final average will be a weighted average of these grades according to the weights above.  The letter grade for the class will be assigned according to the following grading scale.

                   A                 93 – 100%

                   A-                90 – 92%

                   B+               87 – 89%

                   B                 83 – 86%

                   B-                80 – 82%

                   C+               77 – 79%

                   C                 73 – 76%

                   C-                70 – 72%

                   D+               67 – 69%

                   D                 63 – 66%

                   D-                60 – 62%

                   F                  < 60%

Academic Integrity

                   Exemplary academic integrity is expected and assumed.  The work you submit (e.g., examination, homework, paper) should be your own.  Students are expected to be familiar and comply with the University Policy on Academic Dishonesty (see pp. 50-57 of the 2005-2006 Student Handbook).  Violating this assumption to any degree is not tolerated and carries severe consequences.  Violators will be dealt with severely and handled in accordance with this policy.  Penalties include failing the course and are made part of the student’s academic record.

Collaborating often times facilitates the learning process.  You may therefore consult with each other in limited ways.  Plagiarizers and cheaters will be dealt with strictly.  It is fairly easy to detect excessive collaboration in assignments (even when attempts are made to mask it.)  I have found cheating on computer assignments in this course as well as others and responded accordingly.  You are hereby put on notice.  If you have any questions as to what the appropriate boundaries are, please ask me before you act.  In the absence of that consultation, here are some guidelines.

a.           Copying files of someone else’s work is strictly prohibited.

b.           Copying formulas from another’s worksheet is prohibited.

c.        Consulting to understand the general approach and techniques is permitted.

Office Hours

                   Please see me if you have questions.  I am available during the office hours above and generally during normal business hours save for time when I am in class.  I can be reach by phone or e-mail, as well.  See me early before a problem becomes unmanageable.  Conscientious students without class absences have priority for out-of-class assistance.

Students with Disabilities

Students with disabilities who believe that they may need accommodations in this class are encouraged to contact the Disability Support Services Office, Doyle Room 26, at 375-2065 as soon as possible to better ensure that such accommodations are implemented in a timely fashion.  Documentation from this office is required before accommodations can be made.

Incomplete and Withdrawal Policies

University Policy prohibits instructors from assigning a grade of Incomplete (I) to prevent a student from receiving a poor grade in the course.  A similar policy applies to withdrawals (W).

­Extra-Credit Policy

No opportunities for extra-credit will be given to select students.  Otherwise, students who are not given the same opportunity are put at a relative disadvantage.

                                                                                   COURSE OUTLINE

Week 1                      Introduction to class

Portfolio overview

Types of investments

Look at By-laws

Equity Valuation Process

                                                   

                                – Discounted Dividend Valuation

                                   – Free Cash Flow Valuation

Week 2              Market efficiency…

                                   Industry overview

                                         

Week 3                      Market-Based valuation (ratios and multiples)

Week  4                   Portfolio Risk Management

Week   5                    Market efficiency and portfolio management

Week 6                      MIDTERM EXAM

Week 6-15                Presentations and Pitches