2. General Meeting 1 9.9.2014

3. Opening Remarks Information about USIT –Who we are –What we are about Criticize me –Help me do a good job General Meeting 1

4. Meeting Agenda  Announcements  Portfolio Update  Market Overview  Lecture: Introduction to the World (Finance)  Pitch: YNDX  Important Dates General Meeting 1

5. 2014-2015 Campaign USIT will be giving away $1,000 this year –Funded by last year’s portfolio gains You decide where the money goes General Meeting 1

6. Important Dates Thursday, Sept. 11, 7PM; CBA 4.328- SCG Workshop Thursday, Sept. 11, 11:59PM- Officer and SCG Apps Due Sat., Sept. 13- Officer Interviews and SCG Lunch Sun, Sept. 14- SCG Interviews Remember to pay your dues to apply for an officer position! 2 Free meetings Get free T-shirt if you pay by midnight tonight General Meeting 1

7. Leadership Opportunities for leadership: Operations & Finance Marketing & Advertising Investing Logistics Chair Advertising ChairSCG Junior Analyst New USIT members are granted the title of Fund Analyst Technology Chair Treasurer Membership Chair General Meeting 1

8. Strategic Capital Group Director of Investment Director Senior Analyst Junior Analyst Director General Meeting 1

9. Opening Remarks cont. Applying to SCG Applying for Officer positions What happens if I don’t get in? !?!??!!??!!??!!??!?!?!?!?!?!?!?!?!?!?!? General Meeting 1

10. Announcements Build and manage your own virtual portfolio Compete with other McCombs students Top three winners receive prizes in January Register at usiteam.org/events Fall Portfolio Challenge $5$5 entry fee General Meeting 1

11. Announcements Pitch a stock to a panel of industry professionals Network with investors across the country Prize pool TBD Saturday November 1 SP www.usiteam.org/events T HE T EXAS S TOCK P ITCH C OMPETITION 2014 General Meeting 1

12. Announcements Free Wall Street Journal digital access for paid members Contact President@usiteam.org to receive login information President@usiteam.org General Meeting 1

13. Workshop Workshops Every Thursday 7-8PM CBA 4.328 Topic this week: Basic Terminology General Meeting 1

14. VIP Speaker Workshops Every Thursday 7-8PM CBA 4.328 Topic this week: Basic Terminology General Meeting 1

15. Student Consulting Initiative Workshops Every Thursday 7-8PM CBA 4.328 Topic this week: Basic Terminology General Meeting 1

16. Portfolio Update General Meeting 1

17. Portfolio Update General Meeting 1

18. Portfolio Update General Meeting 1

19. Portfolio Update General Meeting 1

20. Portfolio Update General Meeting 1

21. Investment Thesis - Gencor Due to Gencor’s strong product differentiation and vertical offerings coupled with strong highway industry growth and a consolidation of asphalt plants, Gencor is well positioned with strong financial backing to seize substantial profits in the industry and appreciate to $13.69 its value. GENC General Meeting 1

22. Cash is near equal to Market Cap, perfect for capitalizing on future cash flows General Meeting 1

23. Market Overview: Major Indices General Meeting 1

24. Market Overview: Unemployment  142,000 Job created  Unemployment rate drops to 6.1% General Meeting 1

25. Market Overview: General News General Meeting 1

26. Market Overview: General News General Meeting 1

27. Alibaba IPO  What is Alibaba?  Is it larger than Ebay and Amazon?  2013 transactions totaled $248 bn  More than Ebay + Amazon General Meeting 1

28. Alibaba IPO  Why am I talking about Alibaba?  IPO  Midpoint price range of $155 bn General Meeting 1

29. Alibaba IPO 2. By buying stock in Alibaba you get stock in?  A. The Dallas Cowboys  B. Chinese equivalent of social security  C. Alibaba  D. An agency in the Cayman Islands 1. By buying stock in Samsung you get stock in?  A. The Bundesbank  B. A off shore account in Jamaica  C. Samsung  D. A South Korean Pension fund 3. The largest IPO in U.S. history was?  A. AT&T  B. Visa  C. General Motors  D. Facebook General Meeting 1

30. Lecture: Introduction Industry Monetary Policy Fiscal Policy Econ Relative Valuation General Meeting 1

31. American Peak Oil General Meeting 1

32. World Peak Oil General Meeting 1

33. Crude Oil Production General Meeting 1

34. Natural Gas Production General Meeting 1

35. R/P Ratio General Meeting 1

36. QE What is it –What were the stages? –Why was it implemented –Was it a good idea? General Meeting 1

37. Quantitative Easing Stages General Meeting 1

38. Zero Low Bound General Meeting 1

39. US Debt General Meeting 1

40. US Debt General Meeting 1

41. US Debt General Meeting 1

42. Econ General Meeting 1

43. Cost of Capital General Meeting 1

44. Stock Price AAPL $97.99 per share FB $76.67 per share If we want to invest in cheap stocks (buy-low-sell-high), which would you invest in? General Meeting 1

45. Stock price is arbitrary! A company wants to sell a bunch of stock onto a stock exchange to raise money (IPO) The company needs to raise $100 million The company gets to choose the stock price it wants to issue the stock at 1 million shares @ $100 each 10 million shares @ $10 each 100 million shares @ $1 each 1 billion shares @ $0.10 each Price is only used to gauge how much you make off a buy-and-sell trade. It is NOT a determinant of value General Meeting 1

46. Back to multiples We want to figure out if an investment is cheap General Meeting 1

47. Relative Valuation Much in the way price is arbitrary for fruit until you standardize it per unit of weight, stock price can be standardized per unit of earnings Price per share Earnings per share Total earnings / total shares = Tells you how much you pay per dollar of earnings Investors tend to want to pay less for a dollar of earnings like paying less per pound of fruit = General Meeting 1

48. Price to Earnings Example AAPL =15.82x FB $76.67 $97.99 $6.19 $.92 =83.28x General Meeting 1

49. Interpreting a P/E Multiple Lower isn’t always better –For better, safer, growing companies, investors are willing to “pay a higher multiple” –Sometimes a higher multiple indicates expectation the company will “grow into it” Cheap has two meanings –You can get a good price –But that also means you could be getting bad quality General Meeting 1