Professional Documents
Culture Documents
INSIGHTS
Published by the Georgia Tech Student Foundation Investments Committee
STATE OF THE
PORTFOLIO
Jarrod Stein
Performance: Over the month of
November, the portfolio gained 4%
and the S&P 500 rose 6.5%. The
portfolio is currently valued at
$1,177,165 and is up 11% YTD.
Jobless claims continue to land in
line with expectations as the United
States remains a main driver of the
global economy with slow growth
as the Eurozone struggles. The ECB
met under growing pressure to
prevent the economy from entering
recession. It was decided that the
bank would reassess impact of the
stimulus early in 2015 and
determine action at that point. US
markets ended at record highs this
week as data showed that the US
services sector continues to expand,
especially in light of the holiday
season. The impact of the decision
to end QE remains uncertain as the
Fed
remains
noncommittal
regarding raising short term rates.
Changes:
The
Investments
Decisions Group elected to sell the
holding in IBM following the
announcement of continuing their
share buyback program. The IC still
realized significant losses. This
month IDG voted to purchase Icon
PLC (ICLR), National-Oilwell
Varco (NOV), PowerShares Bullish
US Dollar Index (UUP), and iShares
MSCI Singapore Index Fund ETF
(EWS), all at a 2% allocation. Icon
is a contract research organization
that IDG believes to be positioned
well with good exposure and
minimal risk in the growing
healthcare sector. UUP tracks the
performance of the US dollar
against a basket of developedmarkets currencies; this was
purchased on the premise of a
strengthening dollar relative to a
weakening Euro and Japanese yen.
Promotions took place this week;
the current structure was retained
and the leadership is excited for
continued
productivity
and
development in the spring!
Editor-in-Chief
Rohan Verma
rverma31@gatech.edu
JAPAN
RECESSION
Zach Steinfeld
Japans
economy
unexpectedly shrank for the
second consecutive quarter,
marking the beginning of another
technical recession for the worlds
third-largest economy. GDP fell
an annualized 1.6% from July to
September,
compared
with
forecasts for a 2.1% rise. Core
consumer inflation for the nation
is currently .9% amid declining
energy prices and a weak
currency, making the Bank of
Japans 2% percent target tough
to
achieve
and
maintain.
Japanese
Prime
Minister Shinzo Abe has called a
snap election for December 2014
and delayed next years planned
consumption-tax increase from
8% to 10%. This increase would
equate to a double in the purchase
tax from Aprils 5% level.
Abe raised hopes in 2012
that his Liberal Democratic Party
(LDP) could reinvigorate Japan,
swaying voters to give the LDP a
large majority in the Japanese
parliament. He appointed Bank of
Japan
Governor
Haruhiko
Kuroda, who has proven that
monetary policy alone (i.e.
aggressive bond-buying) cannot
sustain economic growth.
(Continued on Page 3)
December 5, 2014 [Edition 3 Volume 3]
~1~
Recent Legal
Changes Spell
Uncertainty for
Healthcare Industry
Palmer Brasher
Japanese Recession
(continued)
In 2013, Abe launched his multibillion dollar stimulus spending
program
known
as
Abenomics. The program has
succeeded in both devaluing the yen
and pushing investors from bonds
into domestic stocks, spurring
hockey-stick growth of the Nikkei,
which has gained 81% under Abe.
However, primarily the richest 20%
of the Japanese population has
benefited from this growth, while
most
consumers
have
seen
stagnation in wealth as a result of
horizontal wages and increased
taxes. Japanese exports are
benefitting
from
recently cut the
the deflated yen,
nations
credit
but
consumers
rating to A1 from
have not benefited
Aa3 in light of
from this windfall,
growing
as exporters have
uncertainty over the
not
increased
governments
wages. As a result,
deficit
reduction
consumption has
targets.
Should
slipped 4.7% since
Abe fail to correct
April. In light of
this
debt-ridden
these events, shortsinking ship, Japan
term prospects for
will likely resort to
the Asiatic nation
supply-side reform
look
to find growth in a
grim. Moreover,
now
receding
Japan carries the
market.
Figure 2. Japanese Inflation
largest debt load in
the developed world, at over 200%
of GDP. Additionally, Moodys
months to support an economy
growing at the slowest pace in
more than a decade.
What's
even
more
troublesome are the indicators
outside China, which show even
slower growth than what official
government
statistics
have
indicated. Of primary interest are
Chinas chief import partners who
provide the majority of Chinas
raw materials, driving both their
domestic and export industries.
Australia, one of Chinas primary
sources of iron ore commodity, has
seen exponential growth in exports
over the past decade only to watch
the last few years become a flat
stagnation to decline. This
realization is supported by the
official factory index for China
falling to 50.3 for November,
Figure 3. Chinese Real Estate
below the 50.5 reading projected
Investment and Annual Growth
by economists, while a private
gauge from HSBC Holdings Plc
Management founder Philip Groves
and
Markit Economics came in at 50,
said in October. Nonperforming
the
dividing
line between expansion
loans at Chinese banks jumped by
and
contraction.
the most since 2005 in the third
As China continues to
quarter to 766.9 billion yuan
change its policy and is unable to
($125.3 billion), official statistics
meet souring debt coverage, a
released earlier this month showed.
mounting rapid decline in imports
The Peoples Bank of China has
will be the telltale sign that the
injected 769.5 billion yuan into its
government is finally allowing the
banking system over the past two
contraction of supply.
December 5, 2014 [Edition 3 Volume 3]
~3~
QUANTITY (#)
AMT
ASH
ATVI
BKLN
BOND
BUD
CVS
DIS
EFA
EWS*
EXR
GOOG
GOOGL
HD
HYS
ICE
ICLR*
IDA
IP
KFNPR
KRFT
MA
MCK
MGA
MO
MON
NBL
NGG
NOV*
QCOM
RE
ROP
RYAM
SBUX
SIRO
UA
UHS
UTX
UUP*
WFC
XOM
BAC Bond
Cash
355
224
1220
817
191
185
311
312
596
1750
418
20
20
330
194
102
432
397
426
690
363
280
191
300
516
191
495
429
321
390
138
152
235
254
288
500
222
250
1500
465
442
1
PRICE
PORTFOLIO
ALLOCATION
%
$101.61
3.4%
$117.86
2.5%
$21.77
2.5%
$24.17
1.9%
$108.80
2.0%
$114.14
2.0%
$89.84
2.6%
$93.23
2.8%
$63.82
3.6%
$13.10
2.2%
$60.12
2.4%
$537.31
1.0%
$542.58
1.0%
$98.95
3.1%
$103.25
1.9%
$227.05
2.2%
$53.96
2.2%
$62.91
2.4%
$54.78
2.2%
$25.77
1.7%
$59.70
2.1%
$88.77
2.4%
$211.82
3.8%
$110.01
3.1%
$50.94
2.5%
$121.09
2.2%
$51.58
2.4%
$72.95
3.0%
$67.35
2.0%
$73.34
2.7%
$174.61
2.3%
$158.79
2.3%
$23.71
0.5%
$81.31
2.0%
$87.78
2.4%
$69.59
3.3%
$106.92
2.2%
$111.21
2.6%
$23.53
3.3%
$54.50
2.4%
$94.37
4.0%
$10,423.90
1.0%
$124,580.20
*NEW PURCHASE
PER SHARE
COST
TOTAL
PROFIT/LOSS
%
$72.62
$97.55
$14.83
$24.84
$109.30
$94.25
$57.84
$57.62
$64.08
$13.25
$47.32
$276.21
$277.06
$61.41
$105.00
$194.07
$53.97
$55.13
$48.62
$25.98
$44.68
$37.79
$66.76
$56.75
$24.43
$111.83
$52.74
$50.04
$73.07
$54.83
$156.87
$97.91
$35.32
$79.84
$75.89
$17.06
$106.36
$92.74
$23.47
$35.23
$73.05
$10,417.43
39.92%
20.83%
46.75%
-2.69%
-0.45%
21.10%
55.32%
61.80%
-0.41%
-1.17%
27.04%
94.53%
95.83%
61.13%
-1.67%
16.99%
-0.01%
14.10%
12.67%
-0.81%
33.62%
134.90%
217.28%
93.86%
108.50%
8.28%
-2.20%
45.78%
-7.83%
33.76%
11.31%
62.19%
-32.86%
1.84%
15.67%
307.81%
0.53%
19.92%
0.25%
54.69%
29.19%
0.06%
SOLD: IBM