1. Student Managed Fund Undergraduate Portfolio April 24, 2003 Scott Bores Eric Burns Kevin Conlon Ellen Huebner Andreas Miliotis Lisa Lin Javed Singha Lucas Smith Jonathon Striker Jared Thal

2. Student Managed Fund I.Overall Performance II.Portfolio Allocation III.Strategy

3. Portfolio Performance

4. Performance Return on Portfolio (Rp) Return on S&P (Rsp) Risk Free (Rf) Since Active Management 17.04%8.39% 1.05% Excess Return 15.99%7.34% Risk (Weighted Average Beta) 1.00 Treynor Index [(Rp-Rf)/Bp] 15.99%7.34%

5. Target Asset Allocation 75%Equities 15%Bonds 10%Money Market

6. Current Asset Allocation Individual Equities78.95% S&P 500 Index12.6% Money Market8.45%

7. Reasons for Allocation Shift Initiated by Foundation Liquidity for future purchases Bullish on overall market

8. Change in Portfolio Value ValuesOctober 8 th, 2002 April 23rd, 2003 Total Portfolio$150,171.15$175,758.92 Money Market$15.49$14,776.32 Fixed Income$53,640.54$0 S&P 500 Index Fund $96,515.12$22,153.64 Equity$0$138,828.96 S&P 500847.91919.02

9. Sector Allocation

10. Portfolio Holdings KrogerPfizer, Inc. Home DepotLiberty Media LowesMcDonalds Concord EFSSears Applera Applied Biosystems PNC Financial Services Grp. Pepsico, Inc.Dover Corp. Microsoft Corp.Berkshire Hathaway KrogerPfizer, Inc. Home DepotLiberty Media LowesMcDonalds Concord EFSHawaiian Electric Applera Applied BiosystemsPNC Financial Services Group Pepsico, Inc.Dover Corp. First RealtyAbbott Labs American ExpressFirst Data Corp. Coca Cola CompanyBerkshire Hathaway Microsoft Corp.

11. Portfolio Objectives Outperform the S&P 500 index Build a well-diversified portfolio Invest in a manner that is consistent with our market forecasts Use valuation models to justify investment decisions Practice informed buy and sell decisions

12. Stock Selection Process Industry Selection Preliminary Research Using Valueline — Sales Growth — Free Cash Flow — Earnings Growth — Earnings Yield — Return on Equity & Invested Capital Detailed Research — Management — Strategy — Insider Trading — Pipeline — Other Qualitative Factors — Competition — Capital Structure — Financial Statements

13. Stock Selection Process Footnotes of Annual Statement Research and Development Prospects for the Future Small Cap Investments Tend not to coincide with our investment philosophy

14. Stock Selection Process Valuation Models 10 Year Equity/Bond Model Holding Company Valuation P/E Model Presentation to Student Managers Discussion Group Vote Stop Loss Orders Number of Shares to Purchase

15. Ten-Year Equity Bond Model Step 1. Step 1. Shareholder Equity * (1+Annual Return)^10 =Equity value in 10 yrs Step 2. Step 2. Equity value in 10 yrs / # of Shares = Equity per Share Step 3. Step 3. Equity per Share * Return on Equity = Earnings per Share Step 4. Step 4. Earnings per share * Projected PE Ratio = Price in 10 yrs Step 5. Step 5. Using future and present price, calculate expected return

16. Holding Company Evaluation To Value Holding Companies we use a liquidation model Find the recent value of all assets and divide them by the total shares outstanding Sum all the values together and find a liquidation value for each share

17. Protection Strategies Highest Return at the lowest risk  Stock selection process  Diverse portfolio  Sell Strategies

18. Sell Strategy Stop-Loss Orders  15% to 25% maximum initially Allows for volatility in a highly volatile market  Review and Adjust sell price to lock-in profits Replaceable Stocks (Are there better or equal opportunities elsewhere?) Upside and Downside Reviews

19. What We Learned Practical Experience in Money Management Application of Classroom to Real World Growth and Return on Invested Capital Drive Value

20. Thank You University of Connecticut Foundation Investment Advisory Board School of Business Mr. Pat Terrion Dr. Chinmoy Ghosh Dr. Tom O’Brien