International Portfolio management through Stocktrak (US and foreign stocks, US and foreign bonds, futures, options, foreign-exchange-exposure hedging strategies)

1. Young Money For Young *****
Portfolio Presentation
Finance 230
Davindra Basdeo
Benjamin Biset
Raphaël Comte
Pierre-Marie Gigon
Alexia Klein
Sarah Lombardo

3. Reduction of the deficit
by $4 trillion over 12
years
Annual Healthcar
Defense
Domestic e
Budget
Spending Spending

4. Decisions
Purchase : $400 bn of Long
Operation Term securities
Twist Sell : $400 bn of Short Term
securities
No other Fed Funds Rate : maintained between 0.00%
QE to 0.025%
Forecasts
2.5% to 2.8% for real 5.0% to 6.0% for 1.6% to 2.0% for the
GDP growth unemployment rate inflation rate

5. 2008 Crisis: Fell by 10%
Consumption, Business Investments, Gov Spending Decreased
2009-2010: GDP rebound with QE1
2011: GDP increased
 Consumption in durable goods, Business Investments
2012: GDP expected to increase by 2.5%
Consumer will spend again
Employment will improve with businesses investments
<10%>

6. 0.6%
August to December, “the unemployment rate has declined by 0.6%.”

7.  Increased by 40% (January to August)
Safe place to invest
China’s GDP rose by 21%
 Decreased To a price of $1650/ounce until January 2012
Strenghtening of US Dollar
+9%
Increased by 22% in One Year
<13%>
+40%
+22%

8.  Increased by 25%
Peak in April
 Riots in Middle East and Arabic Countries
Decreased by 30%
 Investors looking fo Stability
Excess of Production
Increased by 24%
European effort to solve the debt crisis
 Decrease in Production
+25%
<30%> +24%

9. • Used to be the safest form of investment
o Rates started to decline after 9/11
o Decline accelerated after 2008

10. • Return for US Corporate Bond yields higher than Municipal
Bond yields
o Suggests higher risk for Municipal Bonds
• Decrease in both bonds rates from 2010 till 2011

11. • Yield Curves January 2011 higher than January 2012
o Higher number of treasuries sold in 2011
o Recovery slowed in 2011
• Optimistic forecast for the year 2012
o Due to unsafe European bonds

12. • Rise in 10-year bonds since early 2010
o Started with Greece in December 2009
o Continued with Ireland, Spain and Italy
• Forecasts:
o Fall of the Eurozone bonds continues, but not as
substantially

14. Always seen as a safe-haven: The Euro will continue to weaken
 Appreciation after S&P’s sovereign
downgrades including France. in 2012:
 The USD, measured by the trade-  Worsening debt crisis in
weighted DXY index, has increased
8% since early September. Europe
Asian markets will probably be

overvalued due to fewer exports to  Eurozone’s inflation “remains
Europe, leading the US currency to above the bank’s 2% target”
strengthen.
leading to higher yields in
the short term.

15.  The Dow Jones
-Ben Bernanke
speech about no
future quantitative
easing
-Increase in profits of
large companies
4% increase -
Standard&Poor’s Ended 5.5% at
due to overall
downgrade of US the end of the
recovery
Treasury Securities year - Biggest
from AAA to AA increase in 13
years

16.  Nasdaq and S&P500
-Same curves trends as the Dow Jones:
similar correlation between the three
indexes.
-The Dow Jones was the only index
which rose 5.5%.
-The S&P 500 remained almost the
same (0.4% decrease).
-The Nasdaq decreased by 1.8%

17. US stock market will
continue to be considered “The U.S. will continue to be
the “safest” market to the 'least bad' place to invest
Fragile economy: Dow for a number of years."
invest in, as the situation
Jones more attractive.
of the rest of the world George Feiger, CEO of
becomes more uncertain Contango
(e.g.: Europe)

18. MODERATE AGGRESSIVE STRATEGY

20. BETA
1.58
Halliburton Industry Major
Competitors
• $32.61 billion •Oil and gas equipment
company services
•Provides exploration,
• Created in 1919
development and
• Schlumberger
• Traded on the New production of oil and gas Limited
York Stock Exchange, •Sperry drilling, wireline • Baker Hughes Inc
Quote: HAL and perforating, testing
and subsea • Technip
• Operates in 80
countries

21. January 23rd
Q4 2011 earnings results release.
CEO Dave Lesar:
“This was a record
year for our
company.
Our business has
nearly doubled in
size over the last 5
years.”

24. • Sector started to underperform end of 2010
• Company’s stock had been falling for a long period
o Was expected to file for bankruptcy by the end of the year

26. Our case: January 27th
Worst Case: February 9th
Best Case: March 7th

27. • Worst Case
o Increase in stock price until February 9th:
 Continuation of the drop due to the previous announcement
 Biggest intraday gain since January 27th
• Best Case
o 1 month drop: February 9th – March 7th
 Delay on Toledo permit: only US production facility
 FSLR losses of $413M in the 4th quarter posted

28. BETA
1.25
3 Years
Fidelity Sharpe Ratio Major Competitors
FNARX Category
- Ivy Global Natural
• Fund inception in Ressources
0.74 0.64
1997
• Net Asset of $1.30B
Treynor Ratio - JHancock2 Global
• Quote: FNARX Timber1
FNARX Category
15.29 12.34

29. FNARX-Long YMFYP Best Case Worst Case
Bought $34,22 $34,22 $34,22
Sold $34,53 $36,31 $33,72
Number of Contracts 2 922 2 922 2 922
Long Amount ($) $99 990,84 $99 990,84 $99 990,84
Sell Amount ($) $100 896,66 $106 097,82 $98 529,84
<Commission> $10,00 $10,00 $10,00
Gain / Loss $895,82 $6 096,98 $-1 471,00
Return 0.91%
0,91% 6.11%
6,11% -1.46%
-1,46%
Bought 01/25/2012 01/25/2012 01/25/2012
Sold 03/15/2012 02/24/2012 01/30/2012
Total Gain / Loss $895.82 $6 106,98 $-1 461,00
# of days 50 30 5
Annualised 6.52%
6,52% 73.29%
73,29% -105.20%
-105,20%

30. $ 895.82
$34.22 $33.72 $34.53
- One of the world’s largest mutual fund companies
$36.31
- Short term period: 80% analysts agreed to buy FNARX
- Medium term period: 100% agreed to buy $34.22
- Long term period 67% said to buy
- 1.46 % 6.11 % 0.91 %

32. Large Cap
Companies
(> $10 Bn)

33. 1 year
3 years
>
10.15% 33.65% 21.32%

34. +13.97
+45.25% %

35. N/
0.73 0.71 0.07 N/A
A
≈
X 10.43
+ 0.23
N/A N/A 6.64 6.43

36. Networthy ETF Inflows : ICF
4.2% increase in
Indicator of
the outstanding
quality and
units week over
performance
week

37. Are U.S. REIT ETFs A Buy In 2012?
Gain of interest and
Improving US confidence from
economic Data investors in the
domestic real estate
market
Sign of possible Investors seeking
increase of returns in to expand exposure
the US real estate to the domestic real
market positions estate market

38. Foreclosure Properties Fall to 20% of Home
Buys
20%
Foreclosure Recoverage
and of the
distressed housing
sales sector

39. Subprime Debt Insured by FHA Climbs in Bet on
Housing Recovery: Mortgages
US homeowners
allowed to
New refinancing refinance their
program mortgages
Improvement of
investors New mortgages
confidence in the with very low
housing sector interest rates

40. 0.94 % 3.51% -1.98%
$ 942.90 $ 3 515.67 $ -1 980.09
7.20% 23.82% -25.40%

41. Drop in the Real
Estate Market
$77.03
$74.42 $75.12
$72.95
Constant recovery
of the Real Estate
Market

43.  Largest economy in the EU
1st

44. Higher
Probability for
the Bond Yield
to decrease
Higher
Probability for
the Bond Price
to increase

45. ECB slashes 2012 growth outlook, economy may
contract
Panic of
Euro Zone Expected Investors / Germany seen
Contraction Loss of as a safe haven
Confidence

46. Germany sells bonds guaranteed to lose money
Investors are
Demand for
Germany sold desperately
German Bonds
bonds with searching for a
expected to
negative yield safe place to
increase
invest

47. $2 959.45 $4 616.95 $933.31
2.98% 4.64% 0.94%

49. Short Term Long Term
Bonds Bonds
Operation Twist
Process

52. Off Stocktrak
On Stocktrak Call Polypore: PPO YMFYP Best Case
Call Polypore: PPO YMFYP Stock Price $ 40,73 $ 40,73
Stock price $40,73 Exercise Price $ 45,00 $ 45,00
Exercise price $45,00 Option price per share $ 1,65 $ 1,65
Option Price per share $1,65 # shares / contratc 100 100
# shares / contract 100 option price / contract $ 165,00 $ 165,00
Price / contract $165,00 Breakeven price $ 46,65 $ 46,65
Breakeven price $46,65
# contracts 60,61 60,61
# contracts 60,61 real #contracts 60 60
real # contracts 60 Investment $ 9 900,00 $ 9 900,00
Investment $9 900,00 #shares at actual price 243 243
#shares at actual price 243 # shares at option price 6000 6000
# shares at option price 6000 Leverage 25 25
Leverage 25
Did not exercise until 2/18/12
Took the Put on 2/1/12 Exercised on 2/6/12
Sold on 2/18/12 Exercised price $ 48,99
Sold at (option price) $-
Gain/Loss $-9 900,00
Commission $-20,00 $ -9 $ 14
Total Gain / Loss $-9 920,00 Total Gain / Loss 900,00 040,00
Return (%) -100% Return (%) -100,0% 141,8%
$ -9 $ 14
Gain / Loss $-9 920,00
Gain / Loss 900,00 040,00
# of days 17
Days 17 5
Annualized Return (%) -2100,71
Annualized Return (%) -2096,47 10108,8

53. $40.73 Expiration
$48.99
$ -9,920 Date
Short term analyst opinion: 40% sell
BE
Medium term analyst opinion: 100% sell $46.65
- 29 .92%
Exercice
Long term analyst opinion: 100% sell Price
$45.00
- 16.28%
New Competitor enter in the
market
A couple of analysts downgraded
Polypore on the news

54. Morgan Stanley Industry Major Competitors
• $37.96 billion financial •Investment brokerage –
• Goldman Sachs
holding company national industry in the
financial sector
• Created in 1935
•Segments of operation:
• Traded on the New Institutional Securities, • JPMorgan Chase
York Stock Exchange Global Wealth
• Quote: MS Management, Asset
Management

55. JANUARY 19TH
 Q4 EARNINGS REPORT: $275 MILLION LOSS ON A SETTLEMENT WITH THE
BOND INSURER MBIA
 “THE INVESTMENT BANK'S LOSS WAS LESS THAN WALL STREET WAS
EXPECTING.”
February 1st
• News on Facebook’s IPO regulatory
filings with the Securities and
Exchange Commission.
• Facebook confirmed that Morgan
Stanley will be the leading
underwriter in its IPO, which “could
generate as much as $500 million for
the investment banks.”

59. Freight
Logistics
Transportation
Supply Chain
Trailer
Management
Manufacturing
Services

60. +56.03%

61. 8 Stocks to Ride the Economic Revival
Increase in the US Boost Conway’s
economy company
Expected Increase
in the stock value

62. + 8.7% + 316%
+ 958%
Incredible Profitability
Management,
Management
Efficiency and Cost
Control

63. $3 472 -$9 900 $4,824
35.07% -100% 48,7%

64. Announcement of
installation of new
technology
$34.09
BE = $32.75
$32.43
EP = $30.00

65. EXXON Oil & Natural Gas Sector Competitors
- Energy products - $42,845B Market - Royal Dutch Shell PLC
Capitalization
- Major player in the - BP, PLC
industry - Highly volatile
- Total SA
- Created in 1870 -Affected by the recent
tensions in OPEC - Chevron Corporation
- Irving, Texas countries

67.  Bloomberg Calendar
 EIA Petroleum Report :
 Announced drop in oil demand, increase in
inventory, and in price
 Bloomberg
 Drop in Polish operations
 The Street
 Exxon lost its No 1 position in the stock market
 Expects a cash shortage
 Barchart
 Supply in US Exxon Natural gas too high

68. On Stocktrak Off Stocktrak

70.  Healthcare Sector
 Major drug
manufacturing industry
 Top competitors: Bayer
AG, Merck & Co. Inc., and
Novartis AG
 Recent recall so expected
stock prices to fall
 Recommendation: Strong
Sell

72. $-10,016
Strike Price:
$21.00
BE: $20.66

73.  Electronic Equipment
Industry
 Flooding in Thailand
 Strong Yen
 Decrease in Sales in
Europe and in the
United States
  Net loss of MORE
than $2BILLION

75. $-7,320
$17.62 $16.85
Strike Price:
$17.00
BE: $16.80

78. $-2,680
$19.36
Strike Price:
$17.00
BE: $16.65

79. $8,923

81.  Events that affected the
future
 EIA petroleum report
 Bernanke Speech
 BOJ intervention

82.  Petroleum report
 Depreciation of USD → led the future USDJPY down
 Increase in supply, and drop in demand

83. Bernanke's speech about tax cut
program

84. • Short position took on February 8th
o Earthquake
o Constant intervention of the BOJ
• GDP decline
o Shrink in output
o Export decline: Fall of 11.9% in 4th quarter 2011

85. • JPY low benchmark interest rates
o Drop in investors confidence in the US and Europe
o JPY is seen as the safest currency

88. Light Crude Oil

90. Crude Gains on Surprise US Stocks Fall
Potential Oil
Clashes in
Supply Chain
Nigeria
Disruptions

91. Iran asks OPEC members not to raise oil
output
Drop in oil
supply for
Iran Embargo
Western
countries

92. Crude Rises On Hopes For Greek Austerity
Plan
Expectations
Expected
that Greece will First step in
Improvement
approve Euro debt crisis
of European
austerity solvation
economies
measures
Demand for Crude Oil expected to increase

93. $ 15 820.00 $ 1 317 209.00 $ -11 660.00
95.35% 227.75% -350.32%

94. $109.77
$101
$99.68
$98.71

95. Gas stocks: currently 25.4%
above the 5 year average
and 24.6% higher than the
same period last year.
The Northeastern and
Midwestern sections of the
United States are starting to
finally see cold weather, but
the weather will have far too
late for the bulls in this
market.

96. Natural Gas-Short YMFYP Best Case Worst Case
Bought $2,47 $2,47 $2,47
Sold $2,432 $2,06 $2,68
Margin $3 713,00 $3 713,00 $3 713,00
Investment $96 538,00 $96 538,00 $96 538,00
Number of Contracts 26 26 26
Unit per contract 10 000 10 000 10 000
Leverage 6,6 6,6 6,6
Short Amount ($) $642 200,00 $642 200,00 $642 200,00
Cover Amount ($) $632 320,00 $535 600,00 $696 800,00
<Commission> $20,00 $20,00 $20,00
Total Gain / Loss $9 860,00 $106 580,00 $-54 620,00
Return 1,54% 16,60% -8,50%
Shorted 02/07/12 02/07/12 02/07/12
Covered 02/09/12 03/16/2012 02/17/2012
Total Gain / Loss $9 860,00 $106 580,00 $-54 620,00
# of days 2 38 10
Annualised 276,92% 157,26% -306,07%

97. $2.47 $2.68
$2.06
$2.43

98.  Fastest growing interest rate futures product
ever introduced by the CME Group
 Initially set up to manage long-term interest
rate risk
 Recommendation: Hold, Sell, Strong Sell

101.  Strong Buy Signals
 US economy is recovering
Stock market more attractive
 Greek government closed to agree on budget
measures
 Big components reported their earnings
 Disney and Coke

102. DOW JONES

103. Best Case: March 16th,2012
Positive economic members
Worst Case: March 6th,2012
Increase in Oil prices
Increase in Big components
Fear of the Greek debt
Prices (Alcoa, GE, Bank of
China’s cut of economic growth
America..)
target
$12,701
$13,331
$12,900
$12,846

104. Events which will have an
impact on the Aussie:
 US Crude Oil and gasoline
inventories
 China inflation
 New Zealand
unemployment rate

106. Rally after the RBA
announced that it will leave
its cash interest unchanged.

108. $-16,835

112. Production and
Supply of flat
carbon steel
products
Assembling cars,
construction,
appliance, energy,
packaging
sectors…

113. ThyssenKrupp in €480m quarterly loss
€480 m losses €101 m profits
TKA stock value
expected to
decrease

114. $862.54 $9 897.26 -$1 586.31 -$1 585.01 $4 248.93 -$3 166.29
0.87% -9.83% 1.56% -2.49% -6.77% 5.00%
2.02% 10.48% -0.79% -1.29% 7.45% -4.20%
52.03% 188.64% -57.03% -38.77% 149.02% -504.39%

115. $21.202
Acquisition of TKA $21.37
stainless steel unit
by Outokompu
group $18.80
$20.51
$20.77

117. +0.15 +0.27
% %
+0.09
%

118. +2.3
Lower Lower Lower Highe Lower Highe
r r
+0.6

119. Lower Lower Lower

121. Stocks, Commodities Rise After Greece
Approves Austerity Plan for Bailout
Bailout of Greece /
Greek approval of
No default
the austerity plan
payment
Euro Appreciation vs USD

122. BETA
1.04

123. Man Group-Long YMFYP Best Case Worst Case
Shares 46 641 46 641 46 641
Price Bought £1,344 £1,344 £1,344
Investment (£) £62 685,50 £62 500,00 £62 500,00
Exchange Rate $1,5753 $1,5753 $1,5753
Investment ($) $98 748,47 $98 456,25 $98 456,25
Price Sold £1,441 £1,5291 £1,2750
Exchange Rate $1,5929 $1,5933 $1,5733
Price Change 7,22% 13,77% -5,13%
Dollar change 1,12% 1,14% -0,13%
Gain / Loss $8 309,83 $15 175,92 -$4 896,39
<Commission> $20,00 $20,00 $20,00
Total Gain / Loss $8 289,83 $15 155,92 -$4 916,39
Gain / Loss Unhedged 8,42% 15,41% -4,97%
Gain / Loss Hedged 7,22% 14,11% -4,85%
Bought 02/14/2012 02/14/2012 02/14/2012
Sold 03/01/12 03/02/12 02/23/2012
# of days 16 17 9
Annualised 162,39% 298,80% -194,09%

124. £152.91
£134.4 £127.50 £144.1
£134.4
- Europe’s largest alternative fund manager
- short term indicators: 60% buy
15.41 %
- 4.97 % %
8.42

126. February 9th 2012
 Bank of England took the decision to keep its interest rate at 0.5% and to purchase a
further £50 billion of UK Government debt.
 Added to the £200 billion purchase authorized between 2009 and 2010, and to the £75
billion purchase in October 2011, the quantitative easing plan amounts to a total of £325
billion.
 The Bank of England adopted an expansive monetary policy and this last purchase in
February lead the British Pound to depreciate.

127. 



128.  Good Canadian Economy
 Railroad Industry
 A possible changement of CEO
 Investment Plan

129. 2.25% 7.24% -3.41%
2.25% 7.24% -3.41%

130. $74.20 $71.67
CP announced that its annual meeting of
shareholders will take place in May 17th,2012
$75.87
 Changement of CEO decreased and US dollar strenghtened
Oil
Canadian Stock decreased $79.57
Consol Energy decided to cut output at its Buchana
mine (Virginia) because of the lower demand from
foreign steelmakers  CP decreased

132. Adobe Industry
• $Created in 1982 • Application
• Traded on Nasdaq Software Major
100 • Offers a line of Competitors
• Quote: ADBE software and
services
• Apple
• Microsoft
Corporation

133. March 20, 2012
Adobe’s fiscal first-
quarter earnings fell
21% on weaker-than-
expected revenue from
its legacy desktop
software franchise as
customers awaited
introduction of its new
creative tools and
subscription services.

134. Adobe Systems-Short YMFYP Best Case Worst Case
Shorted $33,38 $33,38 $33,38
Covered $33,14 $32,88 $33,38
Number of Contracts 279 279 279
Short Amount ($) $9 313,02 $9 313,02 $9 313,02
Cover Amount ($) $9 246,06 $9 173,52 $9 313,02
<Commission> $20,00 $20,00 $20,00
Dividend - - -
Gain / Loss $46,96 $119,50 $-20,00
Return 0,72% 1,50% 0,00%
Shorted on 03/20/2012 03/20/2012 03/20/2012
Covered on 03/20/2012 03/20/2012 03/20/2012
Total Gain / Loss $46,96 $119,50 $-20,00
# of days 1 1 1
Annualised 258,84% 539,25% 0,00%

136. Gordman’s Store Industry
• $Created in 1915 • Home furnishing Major
• Traded on Nasdaq store Competitors
• Quote: GMAN • Offers a line of
footwear, home
fashions products • kohl’s Corp
and accessories • Macy’s Inc
including fragrances • Wal-Mart Stores

137. March 20, 2012
Gordmans’s fiscal
fourth-quarter earnings
rose a better than
expected 21% as the
regional retailer’s sales
benefited from same
store sales growth of six
stores last year.

138. Colonne1 Colonne2 Colonne3 Colonne4
Gordman's Store-
YMFYP Best Case Worst Case
Long
Bought $17,10 $17,10 $17,10
Sold $19,16 $19,69 $17,10
Number of shares 6 476 6 476 6 476
Long Amount ($) $110 739,60 $110 739,60 $110 739,60
Sell Amount ($) $124 080,16 $127 512,44 $110 739,60
<Commission> $20,00 $20,00 $20,00
Gain / Loss $13 320,56 $16 752,84 $-20,00
Return 12,05% 15,15% 0,00%
Bought 03/20/2012 03/20/2012 03/20/2012
Sold 03/20/2012 03/20/2012 03/20/2012
Total Gain / Loss $13 320,56 $16 752,84 $-20,00
# of days 1 1 1
Annualised 4336,84% 5452,63% 0,00%

140. NuSkin
- Anti-aging products
and nutritional Industry Competitors
supplements
- Personal product - Avon Products Inc
- $3.52B Market
capitalization - $305B Market - L'Oreal SA
capitalization
- Created in 1984 - Revlon, Inc
- Provo, Utah

141. News :
 New program for the personnal product
industry
 NuSkin positive earnings forecats
 Construction of a new facility in Shanghai

144. Chevron Industry
• $204.6 billion • Major Integrated Oil
company & Gas Major
• Created in 1879 • Engaged in Competitors
• Traded on Dow petroleum,
Jones Composite and chemicals, mining,
Dow Industrials power generation, • Exxon Mobil
• Quote: CVX and energy Corporation
operations
worldwide. • BP

145. March 22nd 2012
 A Brazilian federal prosecutor
filed criminal charges against
Chevron for a November oil
spill.
 Brazilian authorities estimate
that 2,400 barrels of crude
were spilled, which led
authorities to suspend all of
Chevron's drilling operations
and to deny the company
access to huge new offshore
fields.
 “The spilling of oil affected the
entire maritime ecosystem,
possibly pushing some species
to extinction, and caused
impacts on economic activity
in the region.“
 Rethink its Latin American
strategies.
 Shortage of trained workers,

148. McDonal's Industry
- Fast food industry - Restaurants Competitors
- $100.39B Market - $1,174B Market - YUM! Brands, Inc
capitalization capitalization
- Burger King
- Created in 1940 - Stable industry, due to Holdings, Inc
the necessity of the
- Oak Brook, Illinois product

149. News :
Retirement of the CEO
Known for being the leader who « turned the company
around »
Worked 41 years in the company, became CEO in 2004
Don Thompson will replace him

152. Apple Industry Major Competitors
• $589.44 billion •Personal computer
• Google
company industry
• Created in 1976 •Segments of operation:
Mobile phones, personal
• Traded on the Nasdaq computers, digital music • HPQ
• Quote: AAPL players
 Ipad 3 Went in Sales

154. $584
$598
$578

157. Risk of Drought in Europe
Freezing weather in February
Less Supply
Price will increase
March 22nd, 2012
Buy
$6.3575 $6.4125 $88,000

158. March 22nd, 2012

159.  China (2nd largest produce) May need to increase
import:
 Import by China may reach 20million tons by 2020
 The US is the largest exporter of crop
March 22nd, 2012
Buy
$6.4775 $6.5075 $120,750

160. March 22nd, 2012

161.  Our Last chance
 No News
 Observations
 Started to decrease
 Strong SELL signal

162. March 23rd, 2012

163. $1,000,000
March 23rd, 2012
Buy
$3,000,000
March 23rd, 2012
Short