1. Capturing AlphaPresentation to Columbia Financial Investment GroupThomas Beevers, CoFounder and CEO of StockViews

2. About Me Graduate of Cambridge University. Corporate Finance at PwC from 1999-2004 Fund Manager of European Equities atNewton Investment Management inLondon 2004-2014. Grew Funds from$100m to $1bn by 2014. Cofounder and CEO of StockViews sinceMarch 14 3. Finance in One PageCapital OwnersProjectFund ManagerSell-Side AnalystCorporate FinanciersCompany 4. Efficient Market Hypothesis Still a dominant idea infinancial markets Taught in business schools A substantial part of the CFAsyllabus 5. EMH Refuted 6. Why Inefficiency ExistsThe reason that capital markets are, have always been, and will always be inefficient is not because of ashortage of timely information, the lack of analytical tools, or inadequate capital. The Internet will notmake the market efficient, even though it makes far more information available, faster than ever before,right at everyones fingertips. Markets are inefficient because of human nature innate, deep-rooted,permanent. People dont consciously choose to invest with emotion they simply cant help it. SethKlarmanOverconfidenceRecencyBiasConfirmationBiasPatternSeekingOverreactionBiasAnchoringAsymetricLoss AversionHerdingPredispositionfor Excitement 7. Institutionalized BehaviourInstitutions often reinforce behavioral bias.- Herding. Proximity to financial centers.- Confirmation Bias. A House View can become embedded.Organization looks for confirming evidence of House View.- Asymmetric Loss Aversion. Career Risk 8. Characteristics of Top Investors- Engage in Thorough Analysis- Philosophy of How Inefficiencies are Created and How toTake Advantage- Emotional Discipline. Do not succumb to panic or euphoria.- Humility. Recognition that luck plays a large role- Independent Thinkers 9. The Problem with Contrarian Investing 10. Characteristics of Top InvestorsLook at market fluctuations as your friend rather than your enemy;profit from folly rather than participate in it. Warren BuffettNot only do investors go wrong, they go wrong in a systematic andpredictable manner. So predictable, in fact, that consistentinvestment strategies can be built on their mistakes.Successful investors tend to be unemotional, allowing the greed andfear of others to play into their hands. Seth KlarmanIf you want to have better performance than the crowd, you must dothings differently from the crowd. John Templeton 11. Characteristics of Top InvestorsOur greatest power is that we know that we don't knowand we are open to being wrong and learning Ray DalioOnce we realize that imperfect understanding is the humancondition there is no shame in being wrong, only in failing tocorrect our mistakes.Our goal is not to outperform all the time -that's not possible. We want to outperformover time 12. Capturing AlphaConsider these two assumptions:1. Markets Are Inefficient2. Investors with the Right Framework can ConsistentlyOutperformIf we accept the above, then the next logical question is:Can we isolate the alpha generators from the crowd? 13. Crowdsourcing AlphaMarket Price (Inefficient)Extract Signal (Less Inefficient)All Market ParticipantsAlpha Generators 14. Sell Side ResearchDissatisfaction with Sell Side1. Conflicts of Interest2. Too Close to Company3. Waterfront Coverage4. Think Like the Consensus 15. StockViews ModelProof of AlphaGenerationHigh QualityResearch 16. StockViews Interface 17. Tools for Investment ClubsPending Development 18. StockViews Mentorship Program10 Students Selected who show strong analytical capabilitiesand independent thinkingSelected Students will receive one-on-one mentoring toimprove their analytical skillsTo work together on 3 articles over a period of 6 monthsApply by sending 2 recent articles to tom@stockviews.com