General Body Meeting 9/10: Market Update, Investing 101, and a Stock Pitch Tutorial

Industrials Analyst Alex Hunter ‘24, Risk Analyst Chisom Njoku ‘24, and Ronald Grose ’24 delivered this week’s market update. The market opened at 4,506.92. The June Jobs Report was disappointing with only 235,000 new jobs, while720,000 were expected. New job opportunities within the service industry have stalled, and there are 400,000 new claims of inability to work due to COVID-19. However, unemployment dropped to 5.2%. In other news, the CARES act funding ended on 9/5/2021 and 7.5 million Americans lost total benefits.  Jerome Powell and the Fed also hinted at slowed bond purchases.


Head Analyst Shaan Shuster ’23 presented an introduction to investing. The basic definition of investing is to deploy capital in a way that will grow it. For our purposes, investing is buying shares of companies to drive portfolio growth. Other types of investments include fixed income, currencies, commodities.  Shaan also covered equity investing. There are two ways to grow capital, income, and capital appreciation.  The Club invests long-term because compound interest drives long-term performance.  In order to invest, you need to have orders executed by brokers, then shares are traded on exchanges. Anyone can sign up and use an online broker like Fidelity, Charles Schwab, or ETrade. In order to successfully invest, you need to balance your investment goals, focus on returns, and understand the risk and return associated with each investment. Risk and return are highly correlated, but diversification reduces risk (unsystematic).


Co-President Jack Evans ’22 provided the club with a tutorial on how to successfully deliver a stock pitch. In your pitch, you need to answer three questions. Who? What? Why?  The Who is the General background on the company and helps set up your pitch. This covers things like the # of employees, the location of the company’s headquarters, and store/manufacturing locations.  You should also cover the C-suite executive such as the CEO, CFO, etc., and their experience and reputation. Company Culture is another important aspect of any company you are going to invest in. What is the internal culture of the company? Are there any potential headlines/scandals?

The next question you want to answer is the What? What Product/Service does this company provide? Is it a quality top-of-the-line product with a sustainable market?  You need to be able to understand and explain what the company does and what its market/industry is.  You should never pitch a company you don’t understand because it is critical to know how a company functions before you consider investing


The final question you need to answer is the Why. You should always have a Catalyst for your pitch. A catalyst is an event or expectation of an event that drastically changes the price of a stock.  Why buy now?  Why is it undervalued?  Why is the share price going to increase? These are all important questions that should be answered in your presentation, otherwise, club members are going to ask them after you finish presenting. You always need to have a why.


You also need to be able to support your why with real numbers and financial metrics. Similar to only presenting companies that you know and understand, you should only utilize metrics and tools that you understand.  However, in any pitch, you should have recent earnings/revenue trend, PE ratio, 52-week range, Cash, and an Analyst Price Target.

You should also always have a comparison of your company to its peers and rivals.  Why this company instead of its competitor?  What sets it apart?. What makes the company unique/different/more intriguing than the rest? This is a great way to summarize your pitch and close the deal. Every investment has risks, so even though you are trying to get your pitch approved you still need to highlight some of the concerns. No company is perfect, and the audience knows this.  By acknowledging risk, you can spin your pitch the right way and legitimize your argument.

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