Welcome! JANUARY 10 TH, 2010

Agenda Recap Fall Quarter Update on Winter Quarter Audience Recommendations

Our Officers President: Ross Klosterman Vice President: Steven Billups Treasurer: Chris Zych Public Relations: Neil Jindal Portfolio Manager: Luke Birk Adviser: Kurtis Roush

How to know what to invest in? 2 methods: –Fundamental Analysis –Technical Analysis Most lean one way or the other –We focus on fundamental and value (basically interchangeable) investing –We will cover both

What do we do here? We want to make you comfortable enough to put some of your own money in that warzone known as the stock market With the right knowledge and practice, you can navigate that warzone to your benefit

What does it mean to own a stock? Share of Stock: A security representing fractional ownership in a firm and a claim on its net assets and earnings. Value of stock changes with market Voting rights Do many things with stocks: –Buy (hold long positions) –Sell –Short selling (short position) –Cover short –More on this later…

What is a fund? A collection of stocks, other equity and debt instruments Can track a particular index (such as the Dow Jones or S&P 500) Diversification –“It’s the only free lunch”

More on Investing in Funds This Quarter…

Business Analysis Procter & Gamble –Competitive advantages? –Brand names? –Ability to raise prices with inflation? –Economic moat? –Industry and type of product? –Consistency?

Accounting Analysis Do the firm’s accounting policies reflect the business reality of the firm? If not, we must make adjustments

Financial Statements Balance Sheet: A list of the things owned and owed by the firm and the difference between the two Income Statement: A list of the resources acquired and consumed by a firm over a period of time Cash Flow Statement: A list of the flows of cash in and out of a company over a period of time

At a later date we will introduce more advanced concepts of accounting –Financial Ratios Profitability, Leverage, Solvency, Liquidity, Efficiency Comparison to other companies in the same industry –Valuation modeling Is the company’s equity more than its market cap? –Anything else you guys would like to learn more about

Balance Sheet for P&G

Reminders About Value Line Good starting point Usually a reliable source for objective data aggregated in a consistent format It’s generally a good idea to ignore Value Line’s predictions (or any analyst predictions for that matter)

Accessible via OSU libraries and ccig.osu.edu.

Choosing a Broker Now that we know the basics of a company, how do we open an account to trade? MANY options…

1. Thinkorswim My personal favorite, as well as Barron’s Great customer support Very innovative Zero downtime in 2008 Extensive, robust trading platform –Tons of tools… watch live CNBC… community Biggest drawback – acquired by TD Ameritrade. –Yet to see any real detrimental effect

Placing an Order

Types of Orders Market – brokers buys/sells for the current market price Limit –an order to buy or sell a set number of shares at a specified price or better –A Limit Order guarantees price, but not an execution Stop-Loss – similar to limit, buy or sell at a certain price –Limit downside of short sell –Protect existing profits Stop Limit – combines stop order (1) w/ limit order (2) –Control when the trade takes place Trailing Stop – parameter w/ trailing feature

What is Technical Analysis? Forecasting of future financial price movements Based on an examination of past price movements Not absolute predictions about the future. Can help investors anticipate what is "likely" to happen to prices over time

How is Technical Analysis used? Utilize various chartsUnderstand different chart indicatorsSome examples:

Charts

Support/Resistance Support – price level at which demand is thought to be strong enough to prevent the price from declining further Resistance – price level at which selling is thought to be strong enough to prevent the price from rising further

RSI/MACD RSI- momentum oscillator that measures the speed and change of price movements Moving Average Convergence/Divergence (MACD) – one of the simplest and most reliable indicators Bollinger Bands – allows users to compare volatility and relative price levels over a period of time.

New Indicators! Williams %R-A momentum indicator that works much like the Stochastic Oscillator. It is especially popular for measuring overbought and oversold levels Wilder’s DMI (ADX)-Used to evaluate the strength of a current trend, be it up or down

Stochastics (Full)-The Stochastic Oscillator is a momentum indicator that shows the location of the current close relative to the high/low range over a set number of periods.

Final Thoughts NOT FOOLPROOF! –*cannot be stressed enough Do your FA Questions?

What do YOU want to know? Cost for the year is $20 –Pizza and pop at every meeting, as well as t-shirts We only exist because you come here so.. What can we do to make this experience most beneficial to all of you. We are going to take these considerations seriously.

New Website! Still Easier for us to update, looks better Will put up.ppt soon!

Wall St. Training Pt. 2 EXCEL IN MERGERS & LBOs An Intense 2-Day Seminar in M&A and LBO 1/22/11-1/23/11 | 9AM – 5PM Location: TBD (Probably SB 320/330… or Gerlach) Learn M&A deal structuring techniques Build merger models and accretion/dilution Comprehend capital structure changes Build and analyze quick & dirty LBO model Special segment on resume, interview & career development tips

Thanks! Questions? Comments?