MBA Face-off: Meet The Ohio State Team
CNBC would like to extend our thanks to all the MBA students from Carnegie Mellon, Cornell, Georgetown, Ohio State, University of Chicago, University of Michigan, University of Notre Dame & University of Texas Austin, for participating in this years MBA Face-Off...
In our last blog post we laid out our thoughts on some of the macro factors that have been driving market performance over the past several weeks. In particular we focused on what the potential impact of the Fed’s operation twist might be on the consumer and business sectors. The conclusion we reached then was that risk assets such as equities, commodities and assets linked to emerging markets would probably suffer as a result of the Fed’s action. This assessment has proven largely correct, however, the benefits of being on the right side of that trade have not made themselves apparent in the performance of Team McCombs.
Meet The MBA Face-off Texas (McCombs) Team
Simply put, the market is currently in a down trend. Reporters argue that the last 3 days were “bullish” and “strong”, but what is there to show for it? Volume on 2 of the last 3 days was non-existent and the 1 day where it did pick up, the market sold off heavy in the afternoon. The NASDAQ is finding resistance at both 2600 and its falling 50 day moving average. Is that bullish action? From a technical standpoint, there is very little bullish about the current market.
Hello CNBC readers! Thank you for checking out our blog. Since we last wrote, things have not come easy for the Johnson team (and our ranking reflects this). But alas, such is the nature of the beast when investing. We remain committed to our strategy and are confident that it’s just a matter of time until the pendulum swings back in our direction.
Meet The MBA Face-off Chicago (Booth) Team
During the current week, our consistently bearish outlook has not proven successful. After a robust debate, we decided to maintain our recent short positions even during the market rally of the past few days. We think that this is mostly a short-covering rally, and do not trust the recent positive macroeconomic headlines to last. That being said, we are actively looking to add to our short positions should this current rally continue.
At Carnegie Mellon’s Tepper School of Business, we are taught the importance of interpreting data to make informed decisions.
Tuesday was not for the faint of heart. All intra-day activity suggested another close at the day’s low - right up until the rumor mill went to work. In the last forty five minutes of trading, the S&P roared upward on news that European leaders were going to create a plan for Greece. And all this time I thought they had already done that…
OK, to start, a quick recheck of our team goals: 1) Crush Michigan (more or less, but it’s a long competition), 2) Shout-out on Mad Money (negative—currently considering more proactive efforts) and 3) Win (Booth/Fisher – go buy BAC or something).
The congressional super committee charged with finding an agreement on deficit reduction has a little more than a week to go until its November 23rd deadline.
Many members of our team went to Chicago’s “Invest For Kids” conference this week (see http://investforkidschicago.org/). The presenting speakers were phenomenal (e.g. Cooperman, Milken, Perry, Zell, etc.) and provided some of their best investment ideas, and we are confident the conference will continue to expand to support its educational causes.
This past week, the markets had been extremely volatile because of the news coming out of Europe and Italy. We had very interesting debates in our Securities Markets & Investment class about the yield on Italian bonds:
Our team here at the Carnegie Mellon’s Tepper School of Business is thrilled to participate in the MBA Face-Off portion of CNBC’s Million Dollar Portfolio Challenge. Our approach to the contest will combine fundamental, macro, and quantitative strategies.
Meet The MBA Face-off Tepper Team
After climbing out of the basement last week, Team Tepper is focused on taking targeted risks to catch the Chicago Bears. Looking at the impressive returns of the Booth team, we see that they are clearly net short, which has paid off so far. Ohio State seems to be adopting a similar strategy. We do not have a great deal of confidence about the direction of the markets with all these Seinfeldian rallies and retreats about nothing.
From Tuesday’s lows to Thursday’s close, the Nasdaq climbed an impressive 9%. A reasonable person should ask themselves, “Is this sustainable?” An old maxim seems to be appropriate to help explain this action: “In the stock market as in life, the road to the top comes by the stairs and the trip back down usually happens via elevator.” The fact that we came screaming off the bottom goes against this philosophy and puts into question the validity of the move.
Technicals, candlesticks, quants, fundamentals, vix, leg up, falling knife, dead cat bounce, Soros, Paulsen, Buffet, bulls, bears, hawks, doves, debts, shorts, unholy trinity, and round and round we go. None of it matters and all of it matters.
Suppose we start with the premise that markets are efficient. That every investor is able to look forward and quickly calculate their expected return and potential risk of their trade, take in all available information, and then place a trade to execute on their beliefs