Market Players

Daniela Rodriguez

Ivan Bengochea

April 21, 2015

Table of Contents

Page 3______________________________________________________________IntroductionPage 4-5 _____________________________________Alibaba (BABA) Company PerformancePage 6-7________________________________________Apple (APPL) Company PerformancePage 8______________________________________________________________ConclusionPage 9_______________________________________________________________Appendix IPage 10_____________________________________________________________Appendix II

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Our portfolio was mostly composed of three companies: Disney, Apple, and Gilead

Sciences and Alibaba. We decided to use $100,000 of paper money to invest and disregarded the

other $100,000 that could’ve been borrowed at an interest rate. We ended with a buying power of

$114,353.76 We brought in $14,353.76 in profits. Our portfolio was constantly increasing and

decreasing throughout time, so many of the companies were purchased and sold simultaneously

to realize small amounts of profits and avoid risk/losses. Gilead had been at a record high after

pushing for its hepatitis c drug to be placed in the market. Since the government approves most

of the drugs it was very easy to keep track of it on the news. Disney kept creating several TV

shows and movies bringing in larger amounts of profit than expected. Alibabas revenues were

over valued and they were also brought into concerns with the Chinese government for selling

fake merchandise, bringing the stock down 10% in price. Our overall investment approach was

viewing all financial statements for the companies and seeing which were the safest companies

so we could invest in. About 80% of our money was put into safe companies that yielded small

profits, and then we decided to invest 20% into companies that showed healthy reports but were

also very risky due to renovation in production/sales. We also read up on the companies for a

week before investing so we could have an idea on what the companies financial position were

like to invest in at the current moment and what plans they had for the future in order to seek

profits. Starting our portfolio was very hard, especially not knowing how to do a financial

analysis on a company so we first invested in companies that we had heard of and thought they

could maybe outperform the S&P, which unfortunately we were not able to beat.

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Alibaba had its historic $25 Million IPO on September of last year, it surpassed

successful companies to this date such as Facebooks and Amazons IPO. The companies gained

reputable recognition making it the largest e-commerce in china. Its peak of price of share rose

from $68 to $120 in half a quarter and the expectations for the company from both analyst and

investors were extremely positive.

The first disappointment for both analyst and investors was that the revenue did not meet

its $4.45 Billion expectation; in reality it came slightly short only reaching $4.22 billion. This

made the price of the share decrease by 10% and it has remained so ever since. The company

explained that the drop was due to compensation to its employees and debt payments. The

company also had new projects on its plate, such as the mobile phone project which was showing

considerable profit. Yet the decrease in revenue from what had been projected had a bigger toll

in the downfall in the price of stock. A short while after, accusations came about by Chinese

authorities that Alibaba was selling fake/imitations of goods for the same price as its originals.

China’s state administration of industry and commerce said it had uncovered “the long-term

existence of illegal problems regarding the management of transaction activity and other issues”.

The Chinese involvement in Alibabas growth is also problematic, since the government is a

closely tied with its business it can pave its way for success or tumble it to the ground. Unlike

Americas capitalistic structure, which has little involvement from the government in business

ventures, that is not the same for Alibaba and its communistic country. This is a risk that makes

the investment on Alibabas shares seem unattractive. Alibaba responded to the accusations as

unfair since it has spent over one billion dollars trying to fight the sales of fake goods for over

two years. This added a negative connotation to those whom invested in the company, making

them second guess if their investment had been wise or not.

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Alibabas three major mutual funds holders dropped the stock from its portfolio once the

decrease in revenue was disclosed by the end of December of last year. Tiger Management, was

one of the major mutual fund holders, it minimized its large bulk of shares from 1.2 million

shares in the last quarter to only 571,183 shares after the revenue was shown.  Louis Bacon's

Moore Capital Management decreased its stake by 91 percent and Viking Global Investors LP

decreased its stake by 67.5 percent. This added fear in many investors as they saw that Wall

Street’s biggest Mutual fund players had dropped such large shares. This caused frenzy to those

who held the stocks and discouraged potential investors.

Regardless of all the adverse events that have brought Alibabas stock price down, it is

still considered substantially high compared to its initial public offering price of $68. Currently

the stock price lies at $84.85 and many analyst are still optimistic that the e-commerce dynasty

will overcome all hurdles of its current state.

By: Daniela Rodriguez

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Apple (AAPL) was placed on our portfolio early February when analyst were predicted

higher sales in products such as the iPhone 6, iPad, and MacBook’s. The stock was purchased at

131.61$ which was $1.39 less than its 52 week high. The company reported sales in products and

revenues were 5.3% less than what investors predicted, causing the stock price to slowly

decrease. The price is currently at $127.00 on average, showing that the investment tanked on us.

With very small experience on accompany analysis, I purchased the stock on a trading inflation

period in which the value didn’t match expected revenues or profits. With that said, I believe

Apple can still be a worthy investment that is sure to grow in value for the next 5 yrs. With news

coming out like the iWatch to be the most sold item of the year rather than the iPhone 6 which

increase sales compared to the quarter before, Apple close to becoming America’s first trillion

dollar company, Leading in Sales compared to big competitors like Android, and its financial

statements showing healthy long-term growth. Apple consisted of 23% of our portfolio which

really did ruin chances of beating the S&P in performance causing us a loss off $7.00 per share

on average and 3% loss on our total investment.

The buying of the stock too late was a very risky move as an investor. Apple was

4 days from releasing quarterly earnings when investors started predicting a 5.3% increase in

revenues due to new products released and that caused a 4$ increase in the stock’s price which I

took as a clear indicator to long the stock in hopes of apple reports coming out strong. The day

the reports were release the stock immediately tanked $3.49 at the open of the market, investors

were not happy with apples revenues compared to the expected revenues and the stock began

being sold in the market simultaneously bringing the demand down, and the price down with it.

The other reason why I’m so optimistic with apple is because recently on March 17, Apples

stock price began hitting an all-time low which gave me a good feeling that people would

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purchase the stock due to it being much undervalued. Apple has had a good year, having

increased revenues by 25.6% just off sales off the iPhone 6. Now investors are saying that the

iWatch is going to sky rocket Apples Revenues as they see there is a big demand for them in the

market. Research shows that 25% of the United States people have an iPhone which is a great

opportunity for a vast majority to want to get the watch. Apple also has a very large profit

margin with the watches, showing that gross profits could be anywhere near 37% which is very

high. Apple has never let investors down always changing their approach as a competitor in the

market which keeps me optimistic and sure to think that apple was a very good investment made

at the wrong time.

By: Ivan Bengochea

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This Financial Investment project enlightened us with the tools necessary and equipped

us with the valuable techniques to utilize for investing in our future. Not only did we acquire the

knowledge on how to effectively invest, we also learned how to decipher whether on not to

invest in a particular company. Although real money was not being invested, the project

provided real time money value on the gains or loss from our fictitious investments. This gave us

a glimpse on how our money would have been volatile in a real world environment. This project

was informative and helpful towards understanding the beginning of investing. It gave us the

opportunity to invest in the company of our choice, it required us to track each move the

company took, and it taught us the key points to focus in when investing. As beginners, we

made several mistakes, which were valuable in this learning experience. For example we were

forced to sell companies stocks in which we invested, but were not getting any profit from. This

occurred because we made hasty investments without first taking the time to analyze completely

whether they were good choices to invest in or not. Trends in the market are crucial when

investing and because you think a company is profitable at mere glance it doesn’t mean the

reality is so. In a futures opportunity, an in depth analysis from all directions of a companies

standpoint in time will be considered before an investment is made. This project was very

informative and helpful; the skills learned will be put to practice for our potential investment on

our upcoming years.

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SymbolCompanyCurrency

Quantity Security Types Price FilledCommission

AmountXRT

Trade dateTransaction

type

ACTION MRCY -1,100 Equities $15.8900 3/10/2015

ACTION XOM 220 Equities $87.5700 3/3/2015

ACTION GILD -123 Equities $105.2400 2/24/2015

ACTION AAPL 120 Equities $131.6100 2/24/2015

ACTION HD -64 Equities $112.7000 2/23/2015

ACTION MRCY 200 Equities $17.2300 2/19/2015

ACTION GILD -130 Equities $103.9900 2/19/2015

ACTION MRCY 900 Equities $17.2700 2/17/2015

ACTION GNC -300 Equities $48.7700 2/17/2015

ACTION GNC 300 Equities $48.2300 2/13/2015

ACTION BAC -800 Equities $16.7300 2/13/2015

ACTION BAC 800 Equities $16.6100 2/12/2015

ACTION LOW -170 Equities $71.9500 2/12/2015

ACTION LOW -80 Equities $71.7500 2/12/2015

ACTION HD 64 Equities $110.1700 2/10/2015

ACTION LOW -100 Equities $71.4000 2/10/2015

ACTION AAPL 10 Equities $120.9800 2/10/2015

ACTION AAPL 10 Equities $120.9800 2/10/2015

ACTION AAPL -10 Equities $119.5900 2/9/2015

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ACTION LOW 350 Equities $71.2600 2/9/2015

ACTION DIS 245 Equities $101.7600 2/9/2015

ACTION BABA 289 Equities $86.1600 2/9/2015

ACTION GILD 253 Equities $98.3600 2/9/2015

ACTION AAPL 120 Equities $0.4700 2/5/2015

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