Topic
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Reading Assignment (* = optional)
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| IV. |
Fundamental Analysis |
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A. |
Dividend Discount Models for Use
in Fundamental Analysis |
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1. |
Fundamental analysis |
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Kolb: Chapter |
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2. |
Simple dividend discount models (review) |
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3. |
Two variations on a common theme |
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4. |
Improved dividend discount models |
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5. |
The three levels of fundamental analysis:
an overview |
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B. |
Economic Analysis |
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1. |
Interest rates |
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Kolb: Chapter |
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2. |
Inflation and economic growth |
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3. |
The business cycle |
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4. |
Of what use is economic analysis to a
fundamental analyst? |
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C. |
Industry Analysis |
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1. |
Factors that influence the fortunes of all
companies in an industry (market) |
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Kolb: Chapter |
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2. |
Of what use is industry analysis to a
fundamental analyst? |
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D. |
Company Analysis |
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1. |
Accounting background |
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Kolb: Chapter |
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2. |
Financial ratios used in fundamental analysis |
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3. |
Risk analysis |
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4. |
Of what use is company analysis to a
fundamental analyst? |
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5. |
A final word |
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E. |
Forecasting Cash Flows |
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1. |
Trend-line forecasts |
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Kolb: Chapter |
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2. |
Incorporating economic, industry and company
analysis |
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F. |
Forecasting Discount Rates
(Required Rates of Return) |
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1. |
Beta once again |
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Kolb: Chapter |
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2. |
The CAPM pricing equation |
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*Shiller: All |
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3. |
Forecasting the risk-free rate |
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*Glassman & Hasset: All |
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4. |
Forecasting beta |
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5. |
Forecasting the market risk premium |
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6. |
Forecasting the discount rate |
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G. |
Putting It All Together |
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1. |
Forecast cash flows |
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Kolb: Chapter |
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2. |
Forecast discount rates |
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3. |
Calculate the intrinsic value |
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4. |
Compare the intrinsic value to the current
price |
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| VI. |
Efficient Markets Analysis |
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A. |
The Efficient Markets Hypothesis |
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1. |
What is an efficient market? |
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Kolb: Chapter |
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2. |
The three forms of the EMH |
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*Malkiel: All |
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3. |
Implications for makets |
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B. |
The Efficient Market Analyst's
Approach to Investing |
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1. |
Underlying philosophy |
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Kolb: Chapter |
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2. |
Investment strategy |
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3. |
Evaluating fund performance |
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C. |
Optimal Portfolio Choice |
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1. |
Depicting attitudes towards risk |
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Kolb: Chapter |
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2. |
Portfolio risk and expected return |
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3. |
Depicting investment opportunities: one
safe, one risky asset |
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4. |
Optimal portfolio choice: one safe, one
risky asset |
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5. |
Optimal portfolio choice: two risky
assets |
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6. |
Optimal portfolio choice: multiple risky
assets |
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7. |
Markowitz diversification in practice |
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D. |
Market Valuation of Risk |
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1. |
Beta, diversifiable and non-diversifiable risk |
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Kolb: Chapter |
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2. |
The CAPM pricing equation |
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E. |
Are Markets Efficient? |
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1. |
Evidence suggesting efficiency |
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Kolb: Chapter |
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2. |
Evidence suggesting inefficiency |
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*Thaler: Chapter 13 |
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3. |
Implications for individual investors |
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End of second of two pages |