SMIPO Basics
What is the name of our SMIPO advisor? (Dr. ______)
Dr. Kaushik
What are the 3 main financial ratios SMIPO uses in order for a stock to fit our criteria?
P/E, P/B, P/S
True or False, SMIPO uses value-investing criteria for our investment purposes
True
MorningStar, SimplyWallStreet, SeekingAlpha
What does S&P in S&P 500 stand for?
Standards and Poor
Name 5 different SMIPO sectors
Basic Materials, Consumer Cyclical, Consumer Defensive, Energy, Financial Services, Healthcare, Industrials, Real Estate, Technology, Utilities
A financial ratio such as D/E can be calculated using which financial statement?
Balance Sheet
Who is the father of value investing, and who was the man he mentored to become one of the richest people in the world?
Benjamin Graham and Warren Buffet
What are the 3 financial statements used to evaluate a company?
Income Statement, Balance Sheet, Statement of Cash Flows
Name 3 major stock indices
NASDAQ, Dow Jones, S&P
Generally speaking, our holding period for a stock will be (either less than or greater than) a year?
Greater than
True or False, financial ratios themselves such as P/E, D/E, etc. are listed on publicly filed financial statements
False --> They are calculated using various techniques and formulas, or accessible via most major investment analysis platforms
The ultimate goal of value investing is to find and purchase stocks with a _____ floor and a _____ ceiling to minimize losses and maximize risk?
Define competitive/economic moat and give an example of one in a specific industry
A sustainable advantage a firm has over it competitors --> Google's search algorithm or Coca-Cola's brand
Who is current head of the Federal Reserve?
Jerome Powell
True or False, individual sectors in SMIPO can invest in ETFs?
False
Of the 4 new criteria which were added this semester (PEG, Dividend, ROE, D/E), explain what 2 out of the 4 mean.
PEG - Price to Earnings Growth (Shows price of a stock relative to their current/projected earnings growth)
Dividend - A [typically fixed but can increase/decrease] amount of money paid out to shareholders of a stock as an incentive for owning said stock
ROE - Return on equity, How profitable is a company relative to the money invested by shareholders?
D/E - Debt to Equity, A snapshot of the financial health of a company which can also show financial leverage
A technology company that has just been publicly listed is in finance media quite often for their proprietary AI software. They are currently barely profitable, and their P/E is 200. Would SMIPO be able to invest in this stock? Why or why not?
No, their P/E ratio indicates based on intrinsic value the stock is overvalued.
Name a financial model
DCF, DDM, LBO, 3 Statement Model, etc.
What does ESG stand for, and what does ESG investing entail?
Environmental Social Governance --> ESG conscious investing aims to produce quality returns while investing in companies with good ESG scores or generally speaking an emphasis on ESG initiatives within their business
WACC
What does Warren Buffet define as his ideal holding period for a stock?
When analyzing a ratio such as P/E or D/E for a Technology company, would we want to compare this industry to the sector or overall market? Why?
Industry --> Different sectors have different typical financial ratios and comparing ratios to the overall market will create misleading comparisons during analysis
When you purchase a naked call or put option, you want the stock to go ____ with a call and ____ with a put.
Down, Up