Syllabus for Kerschner ReadingsThematic Investing—Demographic DynamicsThematic Investing—Technological TrendsThematic Investing—Corporate RestructuringThematic Investing—The Death of a ThemeEquity ValuationProfits, the Economy and Stock PricesThe Fixed Income MarketsManias, Panics and Walls of WorryBig Mistake!Course Outline C15.0042 Investments Topics Spring 2003This is a special seminar that will focus on global investing strategy with a primary focus on equity markets. Classes will be a combination of lectures / discussions related to topical issues in investing strategy and current research related to equity markets. Half the sessions will be led by Edward M. Kerschner, one of the foremost practicing market strategists. The other sessions will be led by finance faculty and will focus on reviewing valuation theory and describing some of their ongoing research. Contacts: Course Materials - will be found on Prof. Kerschner's NYU website: http://pages.stern.nyu.edu/~ekerschn Edward Kerschner please contact in class or through Prof. Mei Jianping Mei office: KMC 7-69 998-0354 [email protected] http://pages.stern.nyu.edu/~jmei Michael Keenan office: TCH 9-05 998-0355 [email protected] http://pages.stern.nyu.edu/~mkeenan Grading: Prof. Mei will be in charge of grading. Grades will be based on (1) a series of written assignments, some individual and a couple in groups, (2) classroom participation (which assumes you have read the material ahead of time), (3) probably a "review-type" final examination. Professors Kerschner and Keenan will also be looking at some of the written assignments. To facilitate this, please submit two copies of any written assignment you do, and be sure to keep a copy for yourself.C15.0042 Investments Topics Calendar Schedule OutlineMonday Wednesday01/20no class - MLK holiday01/22Mei & Keenan Administrative01/27Kerschner: Session 01 Investment Strategy - an Overview01/29Keenan: Review of Basic Valuation Models02/03Kerschner: Session 02 Asset Allocation Relationships02/05Keenan: Other Simple Valuation Models02/10Kerschner: Session 03 Thematic Investing - Demographics02/12Kerschner: Session 04 Thematic Investing - Technological Trends02/17no class - PD holiday02/19Mei 02/24Kerschner: Session 05Thematic - Corporate Restructuring02/26Kerschner: Session 06 Thematic - Death of a Theme 03/03Kerschner: Session 07 Equity Valuation03/05Mei03/10Kerschner: Session 08 Profits, the Economy and Stock Prices03/12Keenan: How Firms Die 03/17no class - spring break03/19no class - spring break03/24Kerschner: Session 09 Fixed Income Markets03/26Mei 03/31Kerschner: Session 10 Flations: Inflation and Deflation04/02Mei 04/07Kerschner: Session 11 Individual Investor and the Stock and Bond Markets04/09faculty 04/14Kerschner: Session 12 Manias, Panics, and Walls of Worry 04/16Kerschner: Session 13 Big Mistake ! 04/21Mei 04/23Mei & Guest04/28Mei04/30faculty05/05Mei - review session05/07no class final exam (5/12 - 10:00-11:50) Dates / topics subject to changeCourse Description for Kerschner materials: Investment Topics with a focus on Global Investment StrategyC15.0042 3 credits. SpringPrerequisites: C15.0002, C15.0007, and senior standing.Investment Strategists play a key role in the investment process. Course acquaints students with the process of developing a macro view of the financial markets that can guide asset allocation, stock selection, and other investment policies. Key topics include asset allocation, equity valuationand thematic investing—i.e. determining how demographic, technological and political trends will affect financial markets. The course will also examine other issues, including corporate profits, the fixed income markets, inflation and deflation, and panics and manias. Knowledge of basic finance,macroeconomics, economic history is helpful. Readings, group discussions employed.Course Instructors:Mr. Edward M. Kerschner, Chief Global Strategist for UBS Warburg.Professors Mei, Keenan, and others from the Department of FinanceMr. Kerschner will usually meet the class on Mondays from 11:00-12:15p. The topics he will cover are indicated in the Syllabus below. There may be Mondays when the class runs longer. Onmost Wednesdays Professor Mei or other finance faculty will discuss related research that relates to analytical procedures for valuation and portfolio analysis. Most class sessions will focus on equity markets and analysis. Grading will be based primarily on class discussion and written reports. It is essential that you do the class reading before the class session. Spring 2003Syllabus for Kerschner Readings _______________________________________________________________________Session 1:* Investment Strategy—An OverviewReadings: * “2003 Global Outlook” (Kerschner) A broad overview of one Wall Street firm’s investment strategy, focusing on stock market valuations and current thematics. Note that all of the issues addressed in this overview will be explored in detail in subsequent lectures._______________________________________________________________________Session 2:Asset Allocation Relationships—Theory and PracticeReadings: * “Does Asset Allocation Matter Anymore?” (Kerschner) “Advanced Theory and Methodology of Tactical Asset Allocation” (Lee)“Determinants of Portfolio Performance” (Brinson, Hood, Beebower)* “Asset Allocation—Explanation of the Model” (Kerschner);“Asset Allocation—Monthly Update: October 1987, October 1988, * December 2002” (Kerschner)What is asset allocation? Why does it matter? We will discuss the financial theory behind asset allocation, and review the factors that led to the adoption of an asset allocation framework by the investment community. An Asset Allocation model that has been successfully used on Wall Street for over 25 years will be examined. Finally, we will discuss the challenges that face Asset Allocation practitioners today.Topic for Discussion: So, does Asset Allocation matter anymore?_______________________________________________________________________* Indicates “core reading”Session 3:Thematic Investing—Demographic DynamicsReadings: “Consumer Comeback, Chapter Five: The Payoff” (Kerschner)* “Consumer Comeback” (Kerschner)* “The New Millennium American” (Kerschner)“The American Age of Affluence” (Kerschner)“The All American Shopping List” (Kerschner)“Consumer Myths” (Kerschner)“Consumer Myths