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 We meet every Sunday at 7:15PM – 8:15PM at W151 in PBB  Membership Dues: $25/semester  Food/Drinks every meeting  Investment information and education  Great trading tips and strategies  Investment Competition: $15/semester  Best way to gain experience and learn  Past prizes include iPads, Apple TVs, gift cards  Fun Discussion atmosphere, member involvement

 Roughly 8 members who have an interest in expanding their knowledge of capital markets  Responsible for following one economic sector and presenting to the club  Great resume experience  Will write for the HawkTrade blog on the Motley Fool (

 Platform: Wall Street Survivor  League: HawkTrade Competition  Link: wkTradeCompetition wkTradeCompetition  $15 fee to join  Ability to win great prizes!!!

 League Settings:  Start Date: 9/15/2014  End Date: 12/ 05/2014  Portfolio Size: $100,000  Maximum Trade Position: 25%  Able to trade derivatives and options  If you have any questions, comments, or concerns, contact me: daniel-

 Pick a stock.  Tweet the stock ticker symbol or it to studorg-  Top 3 gainers on the week win a Chipotle giftcard.

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The Fixed Income Market

 A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.

 Coupon – the interest rate that an investor receives for lending the principal, quoted annually but often times paid semi-annually  Principal – Also know as face value, amount which will be repaid to bondholder at maturity, generally ($1000)  Maturity – date at which the principal will be repaid to the bondholder

 Secured/Unsecured – whether or not the bond is backed by collateral, in the case that the issuer defaults  Liquidation Preference – In the case of a bankruptcy, money is returned to debt holders/equity holders in accordance with seniority  Taxability – Municipal bonds are tax-exempt  Callability – Bond can be called before maturity

 Credit/Default Risk – the risk associated with the issuer not being able to make interest payments or repay the principal on a bond  Prepayment Risk – typically through a call provision, risk of missing out on interest payments through early repayment of principal  Interest Rate Risk – the risk of interest rates dramatically changing

 Three main bond rating agencies: S&P, Moody’s, and Fitch  Issuer ratings for Corporations, Municipalities or Governments based on likelihood to default  Also issue ratings on specific debt instruments, secured debt typically has higher rating than unsecured

 Yield to maturity (YTM) is the most commonly cited yield measurement. It measures what the return on a bond is if it is held to maturity and all coupons are reinvested at the YTM rate. Because it is unlikely that coupons will be reinvested at the same rate, an investor's actual return will differ slightly.

 Coupon Rate > Market Interest Rate Bond is sold at Premium  Coupon Rate < Market Interest Rate Bond is sold at Discount  Yield - Price  Price - Yield

 A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years.  Higher duration: longer maturity, lower coupon  Lower duration: shorter maturity, higher coupon

 Corporations – repaid by cash flows, backed by assets  US Government – assumed to be risk-free  Municipalities – backed by taxing power or project revenue  Sovereign Governments – taxing power

 Significant free cash flow generation  Sufficient collateral to insure investment  Strong leverage  Total Debt/EBITA(R)  Strong interest coverage ratios  Funds from Operations/Interest Expense  Industry metrics, competition, macro factors

Technology

 The technology sector can be broken down into four mega sectors  Semiconductors  Software  Networking and Internet  Hardware  Stagnant growth over the last six month\  Software and IT grew the fastest  PC markets has been struggling

 The technology industry is characterized by high premiums  High expenditures in research and development  Above average of companies that have not reported positive cash flows  Investors have done well by investing in product leaders and firms that challenge the status quo

Spin-Offs  Companies are trimming down and focusing their operations  Notably this week are household names:  Hewlett-Packard & Co (HPQ)  Symantec Corp (SYMC)  eBay Inc. (EBAY) New Technologies  The smart phone market is saturating, and companies are shifting towards wearable devices  3D printing continues to gain attention,  Cloud storage and data security are hot topics

 CEO Meg Whitman will give in to Street and split HP into two divisions:HP  Corporate computing services  PC and printing  Comes after experiencing prolonged of stagnant growth

 Provides security, backup and availability solutions  Security: $4.2 billion  Information Management: $2.5 billion  Tax-free distribution to shareholders  Split will come at a cost to employeesemployees

The IMF World Economic Report & Oil

 Overall negative tone of the report sent equities tumblingnegative  Reported stated that valuations are “frothy”  Criticized the banking system, saying that the largest banks could not support financial recovery  Called for changes in banking business models

 Over supply continues to drive oil prices lower. Over supply  Domestic oil production bodes well for GDP growth, in the short term.  Lower oil prices is good for consumers at the pumps.  Shows possible signs of economic weakness.