I nvestment A nalysis II Investment Analysis II - © 2012 Houman Younessi Welcome to MGMT-6330 Investment Analysis II Convenor: Houman Younessi email: [email protected]

Investment

Analysis II

Investment Analysis II - © 2012 Houman Younessi

Welcome to MGMT-6330 Investment Analysis II

Convenor:

Houman Younessi

email: [email protected]

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Investment

Analysis II


Objective Advanced study in Investment Analysis and Risk Management. Emphasis is on fixed-income analysis and derivatives in the context of portfolio management. Topics will include the use of options, futures, emerging markets finance, and fixed-income alternatives. Bond pricing, term structure, duration, and convexity are examined. The role of alternative asset classes, private equity, and hedge funds in an efficient portfolio is explored. Other topics include the International investment environment, a historical examination of speculation in the financial markets, the role of Behavioral Finance and fiduciary duty in investment and business decision-making. The role and use of technology in developing and executing financial models is embedded in course content.

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Textbooks:Swensen, D.F.; Pioneering Portfolio Management; Simon and Shuster – Free Press; 2009.

Nofsinger, J.R.; The Psychology of Investing; 3rd edition; Pearson Prentice –Hall; 2008

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Grading:

Group Workshop Assignment 20 Percent

Team Project 50 Percent

Manager evaluation 30 Percent

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Scope of course is:

INSTITUTIONAL

portfolio

management

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University endowment management is probably the best form of institutional portfolio management

- Long term - We all know the business- Needs are often more complex than

corporations

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Let us start at the beginning:

Objective of all (sane) investors:

How?

return good results

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Trouble is:

Most, yes most, buy high and sell low

Buy high:- Exuberance

- Herd mentality

Sell low:- Despair

- Herd mentality

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If you make a 50% loss, you have to

make a corresponding 100% gain to just get

even

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Must Play Defensive

Defensive does not mean making conventional or conservative investments or employing unimaginative, unoriginal, and “proven” staff and external fund managers

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It means:Ensuring technical competence and knowledge and understanding of:

- Finance theory- Macroeconomics- Financial and sectoral history- Current affairs and events

Safeguarding against biases:

- Incentive and ethical based biases (the principal/agent problem)

- Psychologically based- Self deception- Simplification- Yielding to disposition 11

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LET THE GAMES BEGIN

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Investment Analysis II - © 2012 Houman Younessi 13

So, what have we learned?

We are often not as good as we think we are

The world is often not as simple as we think it is

The world is complex enough, do not over-complicate things

Communication is tricky, we have to be careful with the data we are given

Investment

Analysis II

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So, what must we do?

We must:

Know the theory and tools

Know ourselves

Know the market Know others

Know the environment

Investment

Analysis II

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Theory and tools

QUIZ

Documents

I nvestment A nalysis II Investment Analysis II - © 2012 Houman Younessi Welcome to MGMT-6330 Investment Analysis II Convenor: Houman Younessi email: [email protected]