McIntire Investment InstituteAt the University of Virginia

2008 Recap

Prepared by MII Managers | 27 January 2009

M c I n t i r e I n v e s t m e n t I n s t i t u t e2

Agenda

• Performance review• Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e3

Agenda

• Performance review• Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e4

2008 performance• MII performance 2007: -31.5% or (-

$172,279)• MII benchmark: S&P 500: -38.5%• Spread: 7.0%

2-Jan

1-F

eb

2-M

ar

1-A

pr

1-M

ay

31-M

ay

30-Ju

n

30-Ju

l

29-A

ug

28-S

ep

28-O

ct

27-N

ov

27-D

ec

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

Comparative YTD Performance

M c I n t i r e I n v e s t m e n t I n s t i t u t e5

2008 Winners and Losers

• “Winners”:– Exxon Mobil: (14.8%)– Monsanto: (16.9%)– Covanta: (20.6%)

• Losers:– American Express: (46.5%)– Johnson Controls: (49.6%) – Intuitive Surgical Robots: (60.7%)

M c I n t i r e I n v e s t m e n t I n s t i t u t e6

Portfolio changes

• Closed:– Exxon Mobil: 85.6%– Nike: 16.5%– Express Scripts: 234.6%– Deere & Co: (36.7%)– Johnson Controls: 42.9%

M c I n t i r e I n v e s t m e n t I n s t i t u t e7

Portfolio changes

• Opened:– Long: Textron– Long: Google– Long: Hemisphere GPS– Short: Herbalife– Short: Corinthian Colleges

M c I n t i r e I n v e s t m e n t I n s t i t u t e8

Agenda

• Performance review• Very Expensive Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e9

Set price targets

• Intuitive Surgical Robots• Johnson Controls

• Lesson – take profits

M c I n t i r e I n v e s t m e n t I n s t i t u t e10

Intuitive Surgical Robots

M c I n t i r e I n v e s t m e n t I n s t i t u t e11

Johnson Controls

M c I n t i r e I n v e s t m e n t I n s t i t u t e12

Understand Risks – currency, inputs, etc.

• Sadia• Lesson – always consider downside

M c I n t i r e I n v e s t m e n t I n s t i t u t e13

He who picks bottom has stinky finger

• American Express• Coach

• Lesson – Ease into positions in volatile market

M c I n t i r e I n v e s t m e n t I n s t i t u t e14

American Express

M c I n t i r e I n v e s t m e n t I n s t i t u t e15

Coach

M c I n t i r e I n v e s t m e n t I n s t i t u t e16

Entry Points

• Mistake: Deere & Co.• Well-Played: Monsanto

• Lesson – use watchlist, be patient

M c I n t i r e I n v e s t m e n t I n s t i t u t e17

Mistake: Deere & Co.

M c I n t i r e I n v e s t m e n t I n s t i t u t e18

Well-Played: Monsanto

M c I n t i r e I n v e s t m e n t I n s t i t u t e19

Short!

• No short positions over summer• One short position held through fall

semester

• Lesson – long/short fund need to have short positions

M c I n t i r e I n v e s t m e n t I n s t i t u t e20

Agenda

• Performance review• Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e21

Goals for 2008

• Improved transparency between managers and members– Polling on website– Timely decisions

• Enhance educational value– Financial news in Cavalier Daily– Sector Head presentations

• Standardized Sector Head memos• Open for suggestions as always

M c I n t i r e I n v e s t m e n t I n s t i t u t e22

Goals for 2009

• Improved watchlist• Enhance educational value

– Discussion of pitches during meetings• Improve transparency

– Explanation of management decisions– Issue Semester Reports

• Continue successful efforts• Open to suggestions

M c I n t i r e I n v e s t m e n t I n s t i t u t e23

Agenda

• Performance review• Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e24

Opportunities for involvement

• Benefits of MII involvement:

– Gain real-world investing education and experience

– Platform for future management position

– Improve presentation skills– Useful for interviewing

M c I n t i r e I n v e s t m e n t I n s t i t u t e25

Opportunities for involvement

• Positions for involvement: – Long-fund manager– Short-fund manager– Sector heads– Analyst (Analyst Program)– Member

M c I n t i r e I n v e s t m e n t I n s t i t u t e26

Long-fund positions

• Five person investment committee– Make decisions for all positions in the

portfolio• Candidates are strongly encouraged

to: – Demonstrate regular involvement– Make quality investment pitches with

attention to VAR• Election

– Investment memo and brief presentation

– Dinner with managers

M c I n t i r e I n v e s t m e n t I n s t i t u t e27

Short-fund positions

• Committee that oversees the short portfolio

• Responsible for presenting attractive shorts

• Exposure to advanced investing techniques

• Candidates are strongly encouraged to: – Demonstrate regular involvement– Make quality investment pitches with

attention to VAR• Elections are held in April

M c I n t i r e I n v e s t m e n t I n s t i t u t e28

Sector Head position

• Members select one of nine sectors to cover

• Helps managers oversee portfolio and gain insight into a specific sector

• Bi-weekly updates for managers– Overview of current holdings and

potential investments• Brief overview presentations at

meetings• Contact Pete Cobos (pjc9f)

M c I n t i r e I n v e s t m e n t I n s t i t u t e29

Analysts

• Analyst– One company presentation– Team presentations are acceptable

• Senior Analyst – Two company presentations

M c I n t i r e I n v e s t m e n t I n s t i t u t e30

Analyst Program

• Analysts will be paired with a manager:– Assist with idea generation– Offer guidance for research– Provide direction for VAR– Explain the PowerPoint presentation

process– Check the presentation for

requirements• Contact Pete Cobos (pjc9f)

M c I n t i r e I n v e s t m e n t I n s t i t u t e31

Requirements for a presentation

• Business overview• Well-developed thesis points• Management overview• Investment fundamental• Competitive position in the industry• Recent news and developments• Extensive VAR• Risks• Relevant financial metrics

M c I n t i r e I n v e s t m e n t I n s t i t u t e32

Agenda

• Performance review• Lessons Learned• Goals for 2009• Opportunities for involvement• Website/Collab

M c I n t i r e I n v e s t m e n t I n s t i t u t e33

Website/Collab

• Please visit our website and new Collab:– www.uvamii.com– Collab polling after presentations– Collab discussion forum– Post presentations and sector head

reports– Access research and educational

material– Improved transparency through timely

announcements/constant updates

M c I n t i r e I n v e s t m e n t I n s t i t u t e34

Questions/Comments