Paper Trading and Stock Valuation

Yinghao WangTina Chen

• Maintain a paper trading account with 100K dollars

• Goal: 110K by the end of semester• “Invest in companies, not in the stock market.”

— Peter Lynch

Methodology• Industry analysis• Type of company: slow growers, stalwarts, fast

growers, cyclical, or turnarounds? • Earnings, Earnings, Earnings• Key ratios or numbers: P/E, percent of sales,

the cash position, the debt factor, dividends, book value, cash flow, inventories, pension plans, growth rate, hidden asset … …

• Valuation: DCF, WACC

Schedule

• Flexible• Analyze our position and adjust portfolio