general body meeting 9/15/10 1. mutual investment club of cornell agenda announcements junior...

General Body Meeting 9/15/10

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Mutual Investment Club of Cornell

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Agenda

Announcements Junior analysts Upcoming info sessions

Financial regulation headline Portfolio review General Growth Properties Update Brain teaser answer Conclusion


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Junior analysts

Tech: David Kim, Zach Peskin, Josh Lyons, Nicole Kim Media: Macro: Duane Mitchell, Larry Kogos, Mollie Maher Financial Institutions: Phil Crawford, Adam Nicoletti,

Albert Esteves, Jessica Zapas Real Estate: James Bosco, Wen Jun Wong, Brian Hong Energy: Steph Menke, Andrew Schoen, Stephen Lane,

Andrew Kugler Consumer/Retail: Philip Gatto, James Rockas, Andrew

Schrichte Industrials/Basic Materials:


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Buying shares

All members participating in the management of the fund must purchase a minimum of 3 shares

Investments will be collected next week


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What to do next

If you are a junior analyst Reach out to your senior analyst and

await instructions Attendance at general body meetings is

mandatory If you are not a junior analyst

Highly encouraged to attend education sessions (5:00-6:00pm)


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Basel III

Banks will have to keep more capital on hand to protect against huge investment losses They have to hold common equity to the

value of 4.5% of their assets by 2015 up from 2%

By 2019, need a 2.5% capital conservation buffer of common equity to be run down during financial stress

Tier 1 leverage ratio of 3% Bank stocks led gains for Europe’s

stock markets The euro gained 0.7% against the dollar


Credit Suisse Group(CS)

P/E ratio 9.2 compared to industry 10.7 CHF 14 million net inflows of new

assets Increase in market share in AM and IB Industry-leading capital strength; Tier 1

of 16% Continued movement to a more

conservative risk profile Hiring up 5% Q2 EPS of $1.12 with share price of

$46.91 Recommendation: Hold


Technology Sector Holdings

Cisco Systems, Inc. (CSCO) Consumer electronics, networking and

communications Hewlett-Packard (HPQ)

Computing, data storage, and networking hardware

iGo, Inc (IGOI) Power products for electronic devices


Cisco and HP


iGo, Inc

Different story from Cisco and HP Short-term play


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América Móvil (NYSE: AMX)


AMX- Overview

Leading provider of wireless telecommunications in Mexico, owned by Carlos Slim

Fifth largest mobile operator (number of subscribers) in the world

Largest company in Latin America: operates throughout Latin America, U.S.A., and South America

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AMX – Recent News

Performance since summer: up 3% Fixed line expansion to compete with

telefonica Acquires Telmex, Mexico’s largest carrier

of telephone and Internet service Partially owns NETC, largest cable

operator in Brazil Q2 Earning

Subscribers up 30.7% Revenue up 12% YOY

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AMX - Analysis

Bullish on Latin America Control over Mexico telecom market Growth in fixed line operation Strong liquidity position Some concern over 3G competition


GLD

Current Price: 123.99


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GLD (continued)

Falling value of the USD Against Euro, CAD, AUD, Asian currencies

Growth and strong demand from China and India

Consistent fear of inflation (though experienced volatility along the way)


Union Pacific Corp (UNP)

Recommendation: Hold Thesis:

Best way to play recovering economy

Efficient method of transportation

Undervalued Great business with a

durable competitive advantage


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Major Events Since Purchase

Post purchase drop Bad outlook by

management Rebound

Warren Buffett: BNI

Reports earlier this year of higher car loadings.


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Recent Events

Q2 Earnings Record EPS of $1.40

52% improvement yoy.

Total revenue growth of 27% yoyAll segments

Operating Ratio of 69.4%Best ever


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Occidental Petroleum (OXY)

Recommendation: Hold

Oil and gas producer Small chemical

business Strong balance sheet

Debt/Equity .08 Steady production

gains Primarily onshore


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Original Thesis

Oil was undervalued

Good reserve replacement ratio

Well run company


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Second Quarter Earnings

Q2 2010 net income $1.1 billion ($1.31 per diluted share).

Quarterly yoy production volume growth of over 3 ½ percent. Management style


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Boardwalk Pipeline Partners (BWP) Simple: Gas

transportation and Storage in Southeast Region

Tax advantaged set-up

Dividend of 6.5%


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Thesis

Take the yield Natural gas supply growth pipeline

demand increase. Profit and yield will rise.

Barriers to competition If market range bound, profit comes

from dividends


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Recent events

Q2 Earnings Revenue disappoints

Likely temporary Joint anomalies Basis spreads on

interruptibles

Macroeconomic weakness

Treasury yields dropping

Range bound market


Procter & Gamble

The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world.

The Company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments.

Procter & Gamble's products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores.

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Original Thesis

Portfolio of strong billion dollar brands Consumer preference for quality and

strong value in tough economic environment

Consistent strong performance throughout all markets

Trading at a discount due to fearful market sentiment despite stronger fundamentals

Low risk play on economic recovery

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Flat Performance, Currently at $60.64

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Updates

New Environmentally Friendly Compacted Laundry Detergent Formula to join Future Friendly Portfolio of Products

P&G reaffirmed expected organic sales growth of 4-6%

P&G investing $1 billion over 5 years in China to develop research and manufacturing centers closer to consumers

Look for PG to beat analyst estimates and for the stock price to bump up

general body meeting 9/15/10 1. mutual investment club of cornell agenda announcements junior...

Documents

amx slide

hp slide

huge investment losses

hp shortterm play slide

latin america contro

south america

largest cable operator

andrew schoen