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The Fund Stern Alumni Presentation April 25th 2006 1
Reality Investing at Stern
The Michael Price Student Investment Fund
April 25, 2006
________________________________________
The Fund Stern Alumni Presentation April 25th 2006 2
Tonight’s Program
Overview of MPSIF – Richard Levich, Faculty Advisor
The MPSIF Funds –
Questions & Answers
MPSIF Experience – Debbie Jones, President
Fixed Income Growth Small Cap Value
The Fund Stern Alumni Presentation April 25th 2006 3
Overview of MPSIF
MPSIF as an Endowment Fund
Origin of The Michael Price Student Investment Fund (MPSIF)
Organizational Overview
MPSIF as an MBA Course
Goals for the Future
The Fund Stern Alumni Presentation April 25th 2006 4
MPSIF Established in 1999
Founded with $2.0 million gift - Michael F. Price
Gift enabled establishment of three funds
Fund part of the overall NYU endowment
Fund has a mandated 5% per annum distribution
Michael F. Price - Managing partner of MFP Investors and former chairman of Franklin Mutual Series funds.
Three Funds - Red, Green and Blue - Each allocated $600,000. Each Fund had a different investment objective.Note: $200,000 allocated for administrative expenses
Distribution provides scholarships to selected students from the Price College of Business at the Univ. of Oklahoma for study at NYU Stern.
The Fund Stern Alumni Presentation April 25th 2006 5
Organizational Overview
Advisory Board for MPSIF
Management Advisory Council
Board determines general investment guidelines and provides administrative oversight
Council receives annual and semi-annual reports and visits class to review operating practices
Executive Committee
Individual Funds
The Faculty Advisor, President, Treasurer and Portfolio Managers - Exec Committee oversees activities of the fund over the semester
Student portfolio managers oversee day-to-day operations, other students perform related tasks
The Fund Stern Alumni Presentation April 25th 2006 6
Organization of MPSIF
Advisory Board
Fixed Income
Growth Small Cap Value
Executive Committee
Portfolio Manager (2)
Portfolio Manager (1)
Portfolio Manager (2)
Faculty Advisor, President, Treasurer, Portfolio Managers
Portfolio Manager (2)
The Fund Stern Alumni Presentation April 25th 2006 7
Pedagogical Objectives
We operate MPSIF as a Course not a Club
Goals
• Course promotes responsibility for managing significant real assets, and a vehicle for selecting and organizing students
• To promote continuity, students are required to participate over two semesters. Half register fall-spring, half register spring-fall. “Overlapping generations” setup
•An 8-11 month immersion course for honing analytical and presentation skills
•A capstone, interdisciplinary course in which managing diverse tasks relies on teamwork
•Deeper understanding of governance and fiduciary responsibilities in running an endowment fund
The Fund Stern Alumni Presentation April 25th 2006 8
MPSIF as an MBA Course
Not an ordinary class
Students perform all of the key tasks
• Some outside speakers, but very few lecturers• Emphasis is hands-on, experiential, learning-by-doing
The deliverables
• Financial writing, oral presentations, financial decision making in a group setting
• ~ 45 students populate 3 equity fund teams• Economic, sector and company research• Stock selection, buys & sells, monitoring• Fiduciary duties – Annual and semi-annual reports, minutes of
activities, Board presentations
The Fund Stern Alumni Presentation April 25th 2006 9
Recent MPSIF Initiatives
Alumni Panel and Alumni Reunion
Management Advisory Council
Wilshire analytics portfolio analysis
Annual Report upgrade
Resume book
Web-site upgrade
“The Educated Investor” newsletter
Proxy voting, litigation filings
Re-balancing of MPSIF portfolio
• Gross flows in excess of $400,000
The Fund Stern Alumni Presentation April 25th 2006 10
Deliverables
The Fund Stern Alumni Presentation April 25th 2006 11
MPSIF as an Endowment Fund
Student run MPSIF, but within limits “Rules of the Game”
MPSIF Operates on an open book policy
• MPSIF is a long-only endowment fund.• Permitted securities include: Stocks, bonds, money market instruments,
and limited mutual funds. NYU is a tax exempt institution.• Goals include (a) returns in excess of inflation over a 3-5 year period, (b) returns exceeding an appropriate benchmark, (c) focus on long-term opportunities rather than short-term trading gains,
(d) an acceptable level of diversification
• Stands ready to make its results, activities, reports available to anyone within the NYU community with an interest. (Active web site)
The Fund Stern Alumni Presentation April 25th 2006 12
How has MPSIF Performed?
Six year record – Inception March 1, 2000
The Michael Price Student Investment Fund vs. Blended BenchmarkPerformance of $1000 Investment since Inception (March 1, 2000)
$1,443
$1,243
600
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Price Fund
Blended Benchmark
Monthly returns are time-weighted and thus exclude effects of the Fund's annual 5% distribution. The Blended Benchmark is equally comprised of the Russell 2000 Index, the Russell 1000 Growth Index, the Russell 1000 Value Index, and the Vanguard Total Bond Index Fund.
Since Inception1.8M to $2.01M
44% Total Returnin first six years (~6.18%
p.a.)
Does not include $461,000 in distributions
Well ahead of benchmark 75% Equity, 25% Debt
The Fund Stern Alumni Presentation April 25th 2006 13
Goals for the Future
Enhance MPSIF profile inside and outside Stern
Enhance MPSIF as a vehicle for student recruitment and placement, as well as fundraising
Attract more funds under management – from NYU endowment or other benefactors
The Fund Stern Alumni Presentation April 25th 2006 14
MPSIF – Student Experience
The Michael Price Student Investment Fund
President: Debbie Jones
___________________________________
The Fund
The Fund Stern Alumni Presentation April 25th 2006 15
My Story…Why NYU, Why MPSIF
Why to get my MBA
Where to get my MBA
Previously analyzed mutual funds…needed to improve my fundamental stock picking skills
Met with alum from my undergraduate school who was also the original MPSIF President
How to get a job/internship
MPSIF After Stern
Stock pitches are standard for MBA internship and full-time job applicants (both buy side and sell side)
With six years of history there are numerous MPSIF alum working in the investment management profession
Financial Modeling?
DCF?
CMC & NYU
Deutsche Bank
First Annual Student Alumni
Mixer
The Fund Stern Alumni Presentation April 25th 2006 16
The MPSIF Experience
Placement into Fund (Team)
MPSIF Pitch/Update Format
Generally 15 students per fund – requests are considered. Management seeks a diversified background.
Standard MPSIF written pitch format Presentation to Individual Fund (mon/weds mtgs)
Student Feedback
Student Responsibilities
Question & Answer period – students are required to defend their ideas – Students vote on stock purchase
Additionally Students are required to take on an extra role, (e.g. alumni relations, historical analytics)
• Spent three years at a successful start-up biopharmaceutical company.
• Spent a year as a post- doctoral fellow at Harvard
Medical School, focusing on the research of anti- cancer drugs.
• He holds a Ph.D. degree in chemistry from
Harvard University.
• Investment Summary
• Performance
• Valuation (DCF, multiples, etc.
• Business Description
• Industry Outlook
• Competitor position
• Earnings Outlook
• Financial Statements
The Fund Stern Alumni Presentation April 25th 2006 17
Benefits of Reality Investing
You are accountable
Fund Simulation just isn’t the sameSEACOR is in the business of owning, operating, investing in, marketing and remarketing equipment, primarily in the offshore oil and gas and inland transportation industries. It also provides oil spill response and environmental remediation services.
Seacor (CKH)
Russell 2000 Index
The Fund Stern Alumni Presentation April 25th 2006 18
Performance as of February 28th, 2006
Beating our Benchmark25% Russell 1000 Value Index
25% Russell 1000 Growth Index
25% Russell 2000 Index
25% Vanguard Total Bond Index
The Michael Price Student Investment Fund vs. Blended BenchmarkPerformance of $1000 Investment since Inception (March 1, 2000)
$1,443
$1,243
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
Feb
-00
Apr
-00
Jun-
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Aug
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Oct
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r-01
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Price Fund
Blended Benchmark
Monthly returns are time-weighted and thus exclude effects of the Fund's annual 5% distribution. The Blended Benchmark is equally comprised of the Russell 2000 Index, the Russell 1000 Growth Index, the Russell 1000 Value Index, and the Vanguard Total Bond Index Fund.
The Michael Price Student Investment Fund
Performance of $1000 Investment since Inception (March 1, 2000)
$1,164
$852
$2,273
$1,370
400
600
800
1,000
1,200
1,400
1,600
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2,000
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Fixed Income
Growth
Small Cap
Value
CAGR since inceptionFixed Income: 2.56%Growth: -2.63%Small Cap: 14.66%Value: 6.51%
Monthly returns are time-weighted and thus exclude effects of the Fund's annual 5% distribution. The Fixed Income Fund was created on May 10, 2002 with transfers from each of the stock funds.
Source: Wilshire Analytics
* The Quantum growth/value style score is created from a weighted average of a standardized book/price and forward looking earnings/price (standardized against the Dow Jones Wilshire U.S. 2500 Index, 75% book/price and 25% forward earnings/price).
The Fund Stern Alumni Presentation April 25th 2006 19
The Fixed Income Fund
The Michael Price Student Investment Fund
Portfolio Managers: Marc Strauss and Michael Flood
___________________________________
Fixed IncomeFixed Income
The Fund Stern Alumni Presentation April 25th 2006 20
Fund Overview
Growth Fund
Fund Objective• The fund aims to outperform its benchmark, the Vanguard Total Return
Bond Fund (VBMFX) by taking positions in mutual funds and exchange traded funds (ETFs).
Fund Strategy• The Fund implements its views through a top-down allocation approach to
the main sub sectors of the US Fixed Income [investment grade] market, namely – U.S. Treasuries, Corporates and MBS/ABS, as well as the
Foreign investment grade bond market
Fund is tax exempt – No municipal bonds
Looking forward, we hope to start the next semester with the ability to trade in individual bonds across all sectors
Fixed Income
The Fund Stern Alumni Presentation April 25th 2006 21
Performance as of February 28th, 2006
Growth Fund
For the six months ended February 28, 2006, the fund had a negative net return of 69 basis points, trailing our benchmark by 50 basis points
• Overexposure to the short end of the Treasury yield curve
• Failure to capitalize on the continued strength of the MBS market
• Slight overweighting of the Corporate sector
After bottoming out in October 2005, the fund enjoyed four straight months of positive returns, with a YTD return of 98 basis points, 70 basis points above our benchmark
Over the past three months, we have focused our attention to being more closely aligned with our benchmark, reducing our exposure to the foreign sector and spreading our exposure to Treasuries across the yield curve
Fixed Income
The Fund Stern Alumni Presentation April 25th 2006 22
Performance as of February 28th, 2006
Fixed Income
The Fixed Income Fund vs. The Vanguard Total Bond FundPerformance of $1000 Investment since August 31, 2005
$991
$994
960
980
1,000
1,020
1,040
Sep-
05
Oct
-05
Nov
-05
Dec
-05
Jan-
06
Feb-
06
Fixed Income Fund
Vanguard Total Bond Fund
Monthly returns are time-weighted and thus exclude effects of the Fund's annual 5% distribution.
The Fund Stern Alumni Presentation April 25th 2006 23
Sector Allocations as of February 28th, 2006
Fixed Income
Sector Weightings vs Benchmarks
3.65%
35.61%
20.63%
34.96%
2.94% 2.21%
11.46%
7.78%
27.35%
22.55%
27.36%
3.51%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
ABSM
BS
Corpor
ate
Treas
ury/Age
ncy
Foreig
nCash
VBMFX MPF
The Fund Stern Alumni Presentation April 25th 2006 24
Fund Holdings as of February 28th, 2006
Fixed Income
Fixed Income Fund Holdings as of Febuary 28, 2006
Company Ticker Sector# Shares
HeldClosing
PricePosition Value
% of Assets
PIMCO Total Return Mortgage A PMRAX MBS 17,073 10.60 180,974 39.5%iShares GS $ InvesTop Corp Bond Fnd LQD Corporates 875 107.54 94,098 20.5%iShares Lehman 1-3 Year Treasury Bo SHY Treasuries 875 80.13 70,114 15.3%Templeton Global Bond Fund TPINX Foreign 5,124 10.62 54,417 11.9%iShares Lehman 20+ Year Treasury Bo TLT Treasuries 275 91.35 25,121 5.5%iShares Lehman 7-10Year Treasury Bo IEF Treasuries 300 82.97 24,891 5.4%
Total Securities 449,614 98.1%Cash 8,608 1.9%Total Assets 458,222 100.0%
The Fund Stern Alumni Presentation April 25th 2006 25
Sector Update and Outlook
Growth Fund
U.S. Treasuries
Fixed Income
• The Federal Reserve, reacting to inflationary fears as the economy remains resilient, is likely to continue to raise rates one or two more times in the short term. Future policy is likely to remain data dependent.
• Should the economy start to sputter, rate cuts are a distinct possibility by Q4 2006.
• Although the calendar year started with softness in the Treasury market, we are bullish on Treasuries and recommend overweighting the index with longer duration positions.
MBS
• With mortgage rates forecasted to rise to as much as 6.40% by the fourth quarter of 2006, slower growth in the housing market is expected. Higher rates will slow prepayments and curb home price appreciation, creating potential credit challenges ahead.
• As spreads widen we will continue take a slightly underweight position with respect to the index.
The Fund Stern Alumni Presentation April 25th 2006 26
Sector Update and Outlook cont.
Growth Fund
Corporates
Fixed Income
Foreign
• In terms of business fundamentals, competition from emerging economies has challenged many U.S. companies and industries.
• Rising interest rates will likely erode future profitability as borrowing costs rise and consumer spending slows.
• We recommend avoiding sectors like consumer discretionary, which may be adversely affected by a slowing housing market
and high energy prices.
• A shrinking interest rate differential, coupled with an ever growing current account deficit, could spell trouble for the dollar.
• With rates in Europe and Japan likely to rise, we will look to further reduce our exposure in the near term, especially as the Fed looks
to put the brakes on future rate hikes.
The Fund Stern Alumni Presentation April 25th 2006 27
Challenges Looking Forward
Fixed Income
Challenges
Switching Platform
• Future Fed Policy• Future of the MBS market• Dollar weakness• Tight credit spreads
• Performing our own credit research
The Fund Stern Alumni Presentation April 25th 2006 28Fixed Income
The Growth Fund
The Michael Price Student Investment Fund
Portfolio Managers: Nelson Shim and Rafael Tejada
___________________________________
Growth FundGrowth Fund
The Fund Stern Alumni Presentation April 25th 2006 29
Fund Overview
Growth Fund
Fund Objective
Investment Strategy
• Achieve returns above Russell 1000 Growth Index benchmark.
• Achieve positive absolute returns.
. • Search for stocks with long-term EPS growth expectations exceeding 15% that are attractively priced on a fundamental and relative basis.
• Search for stocks with a long-term, sustainable competitive advantage.
• Such companies may be:
pioneering a new product or service that will see dramatic future demand
altering pre-established norms in a static industry and gaining significant market share
applying their business model to new regions or leading in an industry that is experience high levels of growth
The Fund Stern Alumni Presentation April 25th 2006 30
Fund Performance as of February 28th, 2006
Growth Fund
The fund outperformed its benchmark by 365 bps with an absolute return of 8.75% through the six months ended February 28, 2006
$1,087
$1,051
$960
$980
$1,000
$1,020
$1,040
$1,060
$1,080
$1,100
Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06
Growth Fund
Russell 1000Growth Index
The Fund Stern Alumni Presentation April 25th 2006 31
Sector Allocation as of February 28th, 2006
Growth Fund
The Growth Fund - Sector Allocation
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Con
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Tec
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s Uti
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MPSIF Growth - Aug 05
Russell 1000 Growth - Aug 05
MPSIF Growth - Feb 06
Russell 1000 Growth - Feb 06
The Fund Stern Alumni Presentation April 25th 2006 32
Fund Holdings as of April 23rd, 2006
Growth Fund
Ticker Name Sector Shares Held
Current Price
Current Holdings
% of Total Assets
AEA Advance America Financials 1,600 14.65 23,440 4.8%AMAT Applied Materials, Inc. Information Technology 1,141 18.06 20,606 4.2%BHE Benchmark Electronics, Inc. Information Technology 981 28.30 27,762 5.7%CSCO Cisco Systems, Inc. Information Technology 1,157 20.68 23,927 4.9%DELL Dell Inc. Information Technology 565 27.01 15,261 3.1%DOVP DOV Pharmaceutical, Inc. Health Care 1,269 14.78 18,756 3.9%FDC First Data Corporation Information Technology 501 48.00 24,048 4.9%FDG FORDING INC Materials 266 38.96 10,363 2.1%GFIG GFI Group Inc. Financials 448 59.16 26,504 5.4%HOT Starwood Hotels & Resorts Consumer Discretionary 350 54.32 19,012 3.9%MOGN MGi Pharma, Inc. Health Care 944 17.84 16,841 3.5%MRX Medicis Pharmaceutical Health Care 330 33.14 10,936 2.2%MSCC Microsemi Corporation Information Technology 366 28.10 10,285 2.1%MXIM Maxim Integrated Products Inc. Information Technology 558 36.54 20,389 4.2%PETM PETsMART, Inc. Consumer Discretionary 825 28.90 23,843 4.9%PRAI PRA International Health Care 385 26.32 10,133 2.1%RIG Transocean Inc. Energy 367 87.00 31,929 6.6%SMOD SMART Modular Technologies Information Technology 1,111 9.39 10,432 2.1%TELK Telik, Inc. Health Care 656 18.31 12,011 2.5%TPX Tempur-Pedic International Inc. Consumer Discretionary 1,050 15.49 16,265 3.3%XMSR XM Satellite Radio Holdings Inc. Information Technology 454 22.15 10,056 2.1%WAG Walgreen Company Consumer Staples 431 42.41 18,279 3.8%WFT Weatherford International Ltd. Energy 608 49.69 30,212 6.2%
Total Equities 431,289 88.7%Cash 55,139 11.3%
Total Assets 486,429 100.0%
The Fund Stern Alumni Presentation April 25th 2006 33Growth Fund
The Small Cap Fund
The Michael Price Student Investment Fund
Portfolio Managers: Shivanker Saxena and Lei Mu
___________________________________
Small CapSmall Cap
The Fund Stern Alumni Presentation April 25th 2006 34
Fund Overview
Small Cap
Strategy• Focused upon stock selection and Identifying small-cap companies
with strong fundamental prospects, and that are under followed by the market.
• No explicit bias toward “growth” or “value” investing.
• Invest exclusively in U.S.-traded equities, (market cap < $2B).
• Concentrated portfolio of 20 to 25 positions, with a standard position size of $20,000.
• Security selection driven primarily by bottom-up fundamental research.
• In conjunction with the team’s overall sector and economic views.
Objective• Achieve returns above Russell 2000 Index benchmark.
• Achieve positive absolute returns.
The Fund Stern Alumni Presentation April 25th 2006 35
Fund Performance as of February 28th, 2006
Small Cap
The Small Cap Fund vs. The Russell 2000 IndexPerformance of $1000 Investment since August 31, 2005
$1,157
$1,102
950
1,000
1,050
1,100
1,150
1,200
Aug
-05
Sep
-05
Oct
-05
Nov
-05
Dec
-05
Jan-
06
Feb
-06
Small Cap Fund
Russell 2000 Index
Monthly returns are time-weighted and thus exclude effects of the Fund's annual 5% distribution.
• An absolute return of 28.22% in LTM ended Feb
28, 2006 (Russell 2000 return – 16.59%)
• An absolute return of 15.70% in 6 months ended
Feb 28, 2006 (Russell 2000 return – 10.24%)
• An absolute return of9.05% in 3 months ended Feb 28, 2006 (Russell 2000 return – 7.88%)
The Fund outperformed its benchmark by an average monthly 100 bps in the last sixth months
The Fund Stern Alumni Presentation April 25th 2006 36
Sector Allocation as of February 28th, 2006
Small Cap
The Small Cap Fund - Sector Allocation
0%
5%
10%
15%
20%
25%
30%
35%
Co
nsu
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Dis
cret
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y
Co
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Sta
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s
En
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Fin
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Ind
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MPSIF Small Cap - Aug 05
Russell 2000 - Aug 05
MPSIF Small Cap - Feb 06
Russell 2000 - Feb 06
The Fund Stern Alumni Presentation April 25th 2006 37
Winners and LosersName % Change Reason
WINNERS
DIOD 59.73% DIOD has completed a significant transition over recent years and constantly brings competitive new products to the market. The company has right mix of revenue, lean operations and predictable demand. We are still holding full position of the stock as we believe the company’s competitive edge could continue to support its price growth. The stock is now 75.07% higher than purchase price.
MIPS 44.46% Royalty payback on significant number of licenses signed in 2003 together with end users’ strong momentum in consumer electronics have boosted MIPS’s royalty revenue in recent quarters. We had chosen a good entry point for the stock when MIPS announced a disappointing Q4-FY05 result which lowered its P/E ratio down to a quarter of the sector average. Robust royalty revenue in Q1-FY06 made the stock price soar and we reduced to half position in Jan 06, right before it went down with a 52.75% return.
RI 35.24% RI’s stock price growth has benefited from the improving same stores sales growth, a successful marketing strategy and a business turnaround in FY06. The high margins also grant the stock price higher multiples relative to its peers. We began to hold the stock when it had an adverse run in the last 12 months, with the share price declining quite near to its 52-week low. We sold the stock in Mar 06 when it hit target price.
NFP 34.05% NFP enjoyed successful expansions in institutional life insurance market via aggressive acquisitions, providing a complementary geographic footprint to NFP. We liquidated the stock in Mar 06 with a 40.30% gain.
LOSERS
MOGN (34.61%) While its biggest revenue source Aloxi remained strong revenue growth, MOGN suffered from further delay in FDA approval on its widely-expected product Dacogen as well as failures in Phase 3 trials of its next important product. We liquidated the position in Mar 06 for a loss.
Small Cap
The Fund Stern Alumni Presentation April 25th 2006 38
Current Holdings as of April 23rd, 2006
Small Cap
Ticker Sector NameShares Held
Current Price
Current Holdings
Current weight among equity
holdings
Current Weight in
Total Fund
IWM Index IWM 100 76.68 7,668 1.6% 1.3%
ARLP Materials Alliance Resource Partners, L.P. 535 38.98 20,854 4.4% 3.5%ARO Consumer Discretionary Aeropostale, Inc. 825 29.55 24,379 5.1% 4.1%AXL Industrials American Axle & Manufact. Holdings, Inc. 1,170 17.69 20,697 4.3% 3.4%BBBB Information Technology Blackboard, Inc. 650 29.44 19,136 4.0% 3.2%BBI Consumer Discretionary Blockbuster Inc. 4,500 4.81 21,645 4.5% 3.6%CKH Energy Seacor Holdings, Inc. 280 86.73 24,284 5.1% 4.0%DIOD Information Technology Diodes Incorporated 840 41.41 34,784 7.3% 5.8%ELNK Information Technology EarthLink, Inc. 1,070 9.63 10,304 2.2% 1.7%FVE Health Care Five Star Quality Care, Inc. 2,000 10.17 20,340 4.2% 3.4%LTM Consumer Discretionary Life Time Fitness, Inc. 581 46.21 26,848 5.6% 4.5%MIPS Information Technology MIPS Technologies, Inc. 1,750 7.06 12,355 2.6% 2.1%OPEN Information Technology Open Solutions Inc. 1,285 28.15 36,173 7.6% 6.0%PHH Financials PHH Corporation 500 27.48 13,740 2.9% 2.3%POP Industrials Pope & Talbot, Inc. 2,900 5.79 16,791 3.5% 2.8%PROS Financials ProCentury Corporation 1,800 13.90 25,020 5.2% 4.2%RAIL Industrials FreightCar America, Inc. 290 70.00 20,300 4.2% 3.4%RARE Consumer Discretionary RARE Hospitality International, Inc. 650 32.38 21,047 4.4% 3.5%RURL Health Care Rural/Metro Corporation 2,350 7.82 18,377 3.8% 3.1%TXI Materials Texas Industries, Inc. 375 60.50 22,688 4.7% 3.8%USNA Health Care USANA Health Sciences, Inc. 476 37.90 18,040 3.8% 3.0%VB - VANGUARD SMALL-CAP V - 67.38 - 0.0% 0.0%WDFC Industrials WD-40 Company 740 32.00 23,680 4.9% 3.9%WLDA Consumer Discretionary World Air Holdings, Inc. 2,200 9.04 19,888 4.2% 3.3% Direct Equity Holdings 471,371 98.4% 78.5%Total Equities 479,039 100.0% 79.7%Cash as of April 23, 2006 121,698 20.3%Total Assets 600,737 100.0%
The Fund Stern Alumni Presentation April 25th 2006 39Small Cap
The Value Fund
The Michael Price Student Investment Fund
Portfolio Managers: Benjamin Macdonald and Chao Mui
___________________________________
Value FundValue Fund
The Fund Stern Alumni Presentation April 25th 2006 40
Fund Overview
Value Fund
Fund Objective• Outperform the benchmark on a total return basis by investing in securities that provide superior returns on a risk/return basis through capital
appreciation and dividends.
Fund Benchmark – Russell 1000 Value Index
New Strategic Implementations• Stronger Discipline• Top-Down Approach• ETFs • Increased Holdings to 30 Positions• Mid-Large Cap Focus (over $2bn) • Minimum 20% Total Return Potential • Stop-Loss on Every Position • Stop-Loss and Sell Limit During Summer and Winter Breaks
The Fund Stern Alumni Presentation April 25th 2006 41
Fund Performance as of February 28th, 2006
Value Fund
(a) Prices as of 4/21/2006
The Fund Stern Alumni Presentation April 25th 2006 42
Sector Allocation as of February 28th, 2006
Value Fund
The Value Fund - Sector Allocation
0%
5%
10%
15%
20%
25%
30%
35%
40%
Con
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MPSIF Value - Aug 05
Russell 1000 Value - Aug 05
MPSIF Value - Feb 06
Russell 1000 - Feb 06
The Fund Stern Alumni Presentation April 25th 2006 43
Winners and Losers
Ticker Name Buy Date Sell Date Buy PriceSell/Current
Price (a) Return
PERFORMERS
AWGI Alderwoods Group, Inc. 12/13/04 02/15/06 $12.03 $16.73 39.1%
EC Engelhard Corporation 11/08/04 01/09/06 29.79 37.84 27.0%
FSL Freescale Semiconductor Inc 03/30/05 NA 16.85 31.45 86.6%
RML Russell Corporation 10/05/05 NA 13.54 18.23 34.6%
STX Seagate Technology 11/02/05 NA 14.87 25.10 68.8%
LOSERS
BCGI Boston Communications 02/14/05 04/04/06 7.29 2.90 -60.2%
BSX Boston Scientific Corp. 03/09/05 NA 29.65 22.49 -24.1%
HELE Helen of Troy 11/29/04 04/04/06 27.08 20.51 -24.3%
SAFM Sanderson Farms, Inc. 10/13/05 NA 36.51 24.77 -32.2%
Value Fund
(a) Prices as of 4/21/2006
The Fund Stern Alumni Presentation April 25th 2006 44
Current Holdings as of April 24th, 2006
Value Fund
The Fund Stern Alumni Presentation April 25th 2006 45
Reality Investing at Stern
Questions & Answers
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