Intro to Stock Picking (4/14 GBM)

In our first general body meeting of Spring quarter 2010, Kamron our very own VP of Research and education gave a short 30 minute introduction to stock picking.

Kamron went over 3 strategies:
1) Fundamental Analysis
2) Technical Analysis
3) Growth/value/GARP

In Fundamental Analysis the act of “valuing” a company is to put a number on it. This is done by finding the intrinsic value, relative valuation, contingency pricing. Basically, through your valuation tools you come up with value of a company and then compare it to market price and either buy, sell, or hold.

Technical Analysis is done by analyzing statistics generated by past market activities, where you can find trends, patterns and then act on them. By looking at different charts to find indicators that predict future market activity. Generally this is viewed as a shorter term strategy.

Value Investing is accomplished by finding discounts or inefficiencies in the market. Value investors are usually Contrarians, meaning that they go against public opinion. Through valuation techniques, the value investor can spot an undervalued stock and capitalize on it.



Growth Investing looks for stocks with POTENTIAL and places much less emphasis on present price. This is the opposite of value investing. Growth investors buy companies trading higher than current value because of promise of future growth. Technology and pharmaceutical stocks are the usual suspects. Basically growth investing is betting on the idea rather than the present.

Kamron's parting advice:
1) Think for yourself, do not just follow fads
2) Do your own research
3) Understand what you are investing in
4) Forge your own path

About UIS

"The Undergraduate Investment Society is the largest student leadership organization on the UC San Diego campus. Ann Ko founded the organization in 2003 because she wanted to help undergraduates understand how to start careers in finance. In just seven years, it has surpassed Ms. Ko’s expectations. Today, it is a diverse organization committed to empowering our alumni with financial literacy. We provide career-oriented education through financial seminars, networking events, and luncheons with financial executives from local companies. UIS facilitates internships and promotes long-term relationships with potential employers by bringing professionals to UC San Diego as mentors and advisors. UIS meetings are held on alternate Wednesday evenings and are announced on the organization’s Web page.

In addition to providing services for students, UIS also gives students an opportunity to gain leadership skills. UIS officers plan, organize, and manage UIS meetings and events, especially the annual conference. There is no substitute for hands-on experience, and UIS is managed exclusively by students who make all UIS decisions and who are responsible and accountable for UIS activities."

Dr. Michael Willoughby
UIS Faculty Advisor

Source: Economics in Action