With earnings season officially underway, the first crop of announcements has proven to be somewhat disappointing. Combined with negative reactions to Alcoa (AA), Fastenal (FAST), and JP Morgan (JPM), the market is in a strange state of flux. The Nasdaq (up 13% in 8 days) is demonstrating that it wants to move higher, but there’s no leadership to support the move. The best growth stocks always power the market in both directions. The market is yearning for leadership, but all of the leaders are tired. Perhaps earnings season will usher in a new crop of institutional favorites. If an uptrend is to continue, a catalyst is needed and it must come in the form of liquid, leading stocks.
We agree with our friends at Cornell about the need to deviate from what many of us spend time learning in business school – fundamental analysis. James Mackintosh echoed this view in his column in the FT yesterday. Correlations across sectors and asset classes are very high. When the bulls charge the bears hibernate, as we’ve seen this week. People are investing in binary bets on geopolitical events. That is a complex game. Take Europe – Sure, there is a plan to have a plan, but who will make the plan? The Troika, Merkel or Shäuble? This is an Organizational Behavior - Financial Economics mishmash case study nightmare.
Its October, the leaves are starting to change, Halloween costumes are in stores, ciders are starting to be spiked and apparently you can flavor anything with pumpkin and sell it (beer, coffee and even ice cream). It also means that Q3 earnings are upon us.
Pollution persists. From one day to the next we continue to see similar stories in the news, yet hope for a different outcome. The reality of the financial condition faced by Europe (and to a far lesser degree the U.S.) is similar to that of environmental pollution, which is to say that anything short of a permanent and complete solution does not restore confidence. Clearly, this is evidenced by the amount of volatility seen in the markets since the beginning of the CNBC Million Dollar Portfolio Challenge, with the well-timed use of levered ETFs being an effective way of capitalizing upon such movement.
I’d like to take a moment to talk about some of the events that took place last week at Fisher College of Business. On Wednesday morning our team had an opportunity to work with a CNBC camera crew to film a team meeting and conduct a live broadcast, while also being interviewed by another crew for the TV show Ohio Means Business. While that provided a great experience, the excitement was only beginning!
MBA Face-off: Meet The Georgetown Team
If you’re going through Hell, keep going…Winston Churchill said these words, presumably during a crisis much greater than the one we are in currently. At the moment our team takes solace in these words, and we are constantly on the search for ways to recover some of our drawdowns. Any aberration in normalcy presents opportunities, lurking in a far corner. As we had our flashlights on full beam over the last few days looking for the seemingly elusive opportunities, we stumbled upon some interesting facts:
The following is an example of the economic analysis we do as part of the MBA Investment Fund (http://www.mccombs.utexas.edu/Centers/AIM/MBA-Investment-Fund.aspx) at McCombs where we manage approximately $15 million in 3 different funds. We generally send out a weekly update summarizing the macro trends we see which help our portfolio managers to formulate some top-down views on market conditions.
This is not meant to be an excoriating post. But, as this is a competition, a little feather-ruffling is indeed not a bad thing. In fact, a verbal tete-a-tete makes these kinds of competitions exciting, right? With that in mind, consider the following.
Well, last week was certainly quite the week to start this contest! The combination of the Fed meeting and the macroeconomic uncertainty created pretty good conditions for trading. It will be interesting to see if the sell-off continues into next week or if a rebound is in store. With the constantly changing tone of the markets it appears as if anything is possible.
Greetings from the gorgeous hills of Ithaca, NY! We are excited to be participating in the CNBC challenge this year! Our group consists of student portfolio managers in the Johnson School’s $10 million Cayuga MBA Fund (www.cayugafund.com), a long short market neutral hedge fund with real investors. We are fortunate to have a great trading room at our school and a number of analytical resources at our disposal. Our school is known to have a strong investment management program and holds a number of great events such as the annual MBA Stock Pitch Competition and the annual Women in Investing conference.
Greetings from beautiful South Bend, Indiana! The University of Notre Dame’s Mendoza College of Business is excited to be a part of CNBC’s MBA Face-Off. We have a team of students assembled from the first and second year classes of Mendoza’s Two-Year MBA program supplemented by a few classmates from the rigorous One-Year MBA program (click on the “Schools” tab to view our individual profiles).
The Ohio State University’s, Fisher MBA Trading team is excited to be in the lead as the first week of trading comes towards a close. Our team has pooled together a wealth of knowledge and experience from financial markets and the broader financial services industry. Through collaboration and a strong team spirit, we’ll continue to systematically pursue strategies based on active trading, fundamental analysis, and the macroeconomic environment.
Sell-off started late Wednesday and stocks took a steep dive Thursday after the Fed's latest meeting on monetary policy. Given the most recent economic assessment, there's a lot of fear and turmoil in the market right now even after several solid earning reports earlier this week - Oracle, General Mills, Adobe - which we took advantage of. Will the Fed do something next week to boost the market? We hope so.