MPSIF G+I Meeting Minutes September 24, 2001
Noon session
Attendance:
· Todd Cohen / · Derek DeVries / · Simon Dong· Stewart Glickman / · Sean Ha / · Bryan Lapidus
· Shalini Mahajan / · Ram Venkateswaran / · Pablo Roa
· Larry Teitelbaum / · Amrit Tewary / · Graham Michener
1) Some administrative remarks from Professor Keenan:
· Given recent market volatility, Professor Keenan requires 24 hour prior notice from PM/trader/pitch maker regarding any trade transactions
· In order to help Professor Keenan manage email messages, please include the following items in the subject of all emails sent to him:
o Subject: MPG <space> minutes <space> date (i.e. MPG minutes 09/24)
MPG <space> pitch <space> date
2) Professor Keenan’s handouts included:
· Fund Profile samples handout
3) The group’s final discussion of goal and strategy for the Growth and Income fund has been revised as follows:
a) The Growth + Income fund strives for total return through capital appreciation and income (both dividend and fixed income). The fund will pursue this strategy by investing in two categories of securities:
i) growth stocks
ii) fixed income holdings
b) Growth stocks should be balanced against fixed income holdings to maintain the overall portfolio profile along a 70:30, equity:fixed income ratio.
c) We seek growth stocks as listed in the Russell 1000 Growth Index, which are based on price-to-book and forecasted growth measures. Stocks not included in this index may be considered, provided that the they show growth through a variety of measures, including forecast as measured by First Call consensus estimates.
d) The fixed-income component will function as a hedge against higher risk equity holdings as well as produce income to maintain our 5% fixed payout obligation.
e) The revised benchmarks are as follows:
Component / Benchmark / FunctionGrowth & Income Fund / S&P, risk-adjusted / Reporting purposes
· 70% Equity holdings / Russell 1000 Growth / Internal purposes for gauging actual performance of E holding
· 30% Fixed Income / Lehman Bond Index / Internal purposes for gauging actual performance of FI holding
4) Derek led an informal discussion regarding market direction. His conclusion is that given the latest increase in unemployment and recent tragic events, it is unrealistic to expect the US consumer to continue spending. Up until September, relatively strong consumer spending has kept the economy from entering into a recession. There is consensus agreement now that the market will likely move sideways or down for the rest of the year with a potential pickup next year.
5) Given this environment, our goal should be to pick the stocks and not the sectors, taking into consideration valuation, time horizon, end of year trading strategies, etc. We will try to avoid the impulses of market timing.
6) When pitching stocks, everyone should adhere to a format that includes:
o Summary
o Highlights & news
o Business overview à products
o Industry overview à comparison to peers
o Financials à stock chart, fundamentals, opinions of analysts on the Street, relative valuation, historical reference/valuation
4:30 session
Attendance:
· Todd Cohen / · Derek DeVries / · Bryan Lapidus· Ram Venkateswaran / · Sean Ha / · Pablo Roa
· Graham Michener / · Amrit Tewary
1) Handouts included:
· List of Russell 1000 growth stocks
· Amrit’s Powerpoint slides: TXN
· Bryan’s report: XOM
2) Amrit placed a SELL recommendation on TXN. There was unanimous agreement among the group with a caveat that any liquidation of TXN holdings will include a simultaneous swap with another semiconductor stock. We will continue to hold TXN until another pitch can be made for a replacement.
3) Bryan also had a SELL recommendation on XOM. There was unanimous agreement that XOM should be removed because it does not fit our criteria of a growth stock.
4) Ram volunteered to circulate a copy of a pitch from last year to serve as a model for future pitches.
5) Since we do not have a meeting on October 3rd with Harry Markowitz, we will adhere to the following pitch schedule:
October 1, Monday / Noon / RamShalini
Pablo / CISCO
SWY
LUV
4:30 / Derek Day / Energy Sector
October 8, Monday / Noon / ?????
4:30 / Amrit Day / Technology