Smart Woman Securities Introduction Meeting

smartwomansecurities

© 2006 Smart Woman Securities. All materials are for SWS

members’ use only

September 30, 2006

about us

• Smart Woman Securities (SWS) seeks to provide undergraduate women with the skills necessary to make investment decisions through market education, exposure to industry professionals, and real-world financial experience.– The core purpose of SWS is to educate

young women about investing in the financial markets through educational seminars and direct investment experience.

our mission

our team

•Founding Team:

Tracy Britt Co-FounderHarvard ‘07

Lilly DengFounding PartnerHarvard ‘09

Anika GrubbsFounding PartnerHarvard ‘09

Tiffany NiverFounding PartnerHarvard ‘08

Teresa HsiaoCo-FounderHarvard ‘07

Jane FangFounding PartnerHarvard ‘08

Aidan Madigan-CurtisFounding PartnerHarvard ‘07- ‘08

what will SWS do?

• Weekly educational seminars• Mentorship programs with

professionals• Practical experience in investing and

managing a portfolioSWS isn’t a one-off class about personal

finances and how to fill out your taxes and 401k forms (although that’s important as well!)

… We are trying to give you a platform in which you can use to learn more about

investing and managing your finances. We are learning, just as you are!

our focus• There are several ways in which to invest your money

(checking accounts, savings plans, bonds, mutual funds, etc.)

• Our focus is on equities and how you can invest in the stock market.– There are several reasons for this:

o Since 1926, the average large stock has returned more than 10 percent a year*

o You learn about evaluating a company and deciding whether or not it is a good company in which to invest

o Knowing how to pick stocks can be like a “gateway” into learning about other asset classes (bonds, mutual funds, etc.)

o You can learn more about something with practical experience than by just reading about it

* - CNN.com

what we don’t do• We don’t tell you how to manage your

money• We don’t tell you what to invest in

– Our focus is on empowering you to make investment decisions that are best for you.

– We want to give you options to make your own choices about your portfolio.o In the future, you may decide that investing in individual

stocks is too risky of an investment… however, how will you ever know what you prefer until you actually invest?

* - CNN.com

educational seminars

• The education seminars are designed to provide you with a broad introduction to investing. Each week, we will build on the previous curriculum.– The curriculum has been designed by the SWS

team with the help of industry professionals and individual investors. The seminars have been created especially for undergraduate students from a liberal arts background.

– Although we can’t learn everything about investing in 10 weeks, the seminars are intended to give you a platform upon which you can build knowledge and learn more about investing in a comfortable community setting.

educational seminars

• No prior knowledge of investing or finance is necessary!

• We have high-profile executives and professionals coming and speaking to you about investing.– Each week, you will receive a copy of the

presentation in which to take notes, along with a handout of supplementary information (including a glossary of key terms and other resources). A binder will be provided for you.

educational seminars

2006 scheduleSaturday, Sept. 30SWS Intro Meeting

Topics Covered: - Women in investing- Financial independence- Expectations of SWS members

Tuesday, Oct. 3Lecture: Introduction to Investing

Topics Covered:- Introduction to stocks- How the financial market works- Understanding the terminology- Case Study: Billionaire investors

Oct. 5-6Trip to Omaha

Meet Warren Buffett- Tour of Berkshire Hathaway

Wednesday, Oct. 11Lecture: More on Investing

Topics Covered:- How to read the Wall Street Journal- Portfolio diversification and an overview of other investment tools- Brief glimpse at the various industries- Case Study and Simulation: Investment strategies- SWS Investment Assignment

Wednesday, Oct. 18Lecture: Value Investing

Topics Covered:- What is value investing?- Finding undervalued stocks- Using accounting and valuation techniques- Benefits of value investing- Different forms and approaches to investing

All seminars are held from 6:00 to 7:45 PM at 45 Mt.

Auburn Street (Democracy

Center, white building next to Daedalus)

Wednesday, Oct. 25Lecture: Introduction to Financial Statement Analysis

Topics Covered:- Accounting fundamentals- Financial statement introduction - Understanding basic ratios- Case Study: Evaluating financial statements from individual companies

Wednesday, Nov. 1Lecture: The Company’s Perspective

Topics Covered:- Understanding what a financial officer does for a company- Maintaining its fiduciary duty to shareholders- How management interact with investors and research analysts- Looking at attributes of successful companies

Wednesday, Nov. 8Lecture: Introduction to Valuation

Topics Covered:- Incorporating important ratios into your analysis- Basic valuation techniques (ie. DCF analysis, dividend valuation model, etc.) - Running financial models- Keeping up to date with the market on your own

Wednesday, Nov. 15Lecture: Market Factors and Trends

Topics Covered:- Macroeconomic factors that may influence stock prices- Efficient market hypotheses- Patterns or trends in the market?- Case Study: Market sentiment

2006 schedule

Wednesday, Nov. 29Simulation: Finally Making an Investment Decision

Topics Covered:- Financial statement analysis- Development of company and industry ratios- Analysis of senior management- Development of investment hypothesis- Exploration of key investment criteria

Wednesday, Dec. 6Presentation: SWS Investment Assignments

Topics Covered:- How to present a research report- Questions that should accompany any presentation- Exposure to presentations in differing industries- Feedback from industry experts

Wednesday, Dec. 13Lecture: SWS Fund Details and Personal Investing

Topics Covered: - SWS fund details - How SWS allocates funds - Investing principles and criteria - Explanation of SWS industry coverage - How to pursue a position in SWS - How to invest in a personal account

2006 schedule

investment project• In addition to attending all seminars, SWS

Associates will be required to complete an investment project.– The project will involve working in small teams

(2-4 people) and researching an assigned company in depth.

– Each team will use their knowledge from seminars, complete further research in the industry, and may have the opportunity to speak with industry professionals.

• The semester will culminate with investment recommendations by each team and final presentations.

mentoring

mentoring• SWS members will have the opportunity to

interact with mentors on a variety of levels.– Community Mentors: These mentors are available

for general advice about investing and finance, and come from a variety of different backgrounds.

– Industry Mentors: These mentors are available for more specific advice about the Investment Project, and will serve to offer advice for teams as they go through the Project in the semester.

• Mentors serve as a resource for students; we already have many mentors signed up, and they are very excited to work with students!

investment fund

investment fund• We anticipate to begin investing in the Spring.• The SWS Investment Fund will focus on

domestic U.S. equities, operating with a long-only strategy.

– After conducting in-depth research on a company, SWS members make presentations to their industry team and the Investment Board, outlining an investment recommendation and the analysis behind their hypothesis.

• The Investment Board will eventually make a final recommendation to buy if the stock meets the value criteria outlined by the investment strategy of the fund.

investment fund• Logistics of the fund:

Individuals

Investment Fund

Managed by Investment Board

We seek donations from individuals to the Investment Fund. These SWS “Investors” do not actually receive any returns, although they have the option to withdraw their principal at the end of every fiscal year. If the value of the SWS Investment Fund is less than the principal invested, the Investor will only receive the proportional balance of the Fund.Currently, all returns generated from SWS investments will be

reinvested in the Fund. Eventually, SWS may use generated returns to pay for the day-to-day operations of the organization, including expenses related to the Education Program, outreach trips, and internal SWS events. SWS will never take out Investors’ principal to pay for any incurred expenses.

what’s next?

what happens after the fall?• Following the fall education program, SWS

members have the opportunity to become Associates and are placed on 1-2 industry groups.– Within those groups, Associates work in teams

to research a specific sector more in depth and become “experts” on the field.

– Industry mentors will serve as resources for teams within the industry groups.

– Each team will make recommendation decisions on companies in the sector to an Investment Board that will invest the SWS portfolio in chosen companies.

o Industry groups: Consumer, Financials, Healthcare, Media, Technology

what happens after the fall?• Continuing education

– Industry groups will continue the education begun in the fall by inviting industry professionals bring in speakers for their specific groups.

– Industry groups will work to become experts in the field and will continue education as needed to gain specific skills for industry expertise

– Industry groups may also attend conferences and visit companies to learn more about their field

– Organization-wide lectures may also be held with an emphasis on learning about investments other than equities (ie. bonds, mutual funds, etc.) or talking about women’s issues (opting out, work/life balance, etc.)

getting involved in SWS

organizational structure

2

Founding Family

Investment Board

Portfolio Manager

Executive Board

Chair

Industry Group

Analyst

Associate

Education Program/“Comp”

Member

To join SWS, all participants must go through the 10-week education program, where they will be expected to attend all seminars and complete the SWS Investment Project.

Once SWS participants have completed the education program and Investment Project, they will have the opportunity to join one or two industry groups as Associates. Associates work in teams and conduct research on companies in the industry. Once Associates have demonstrated sufficient interest and knowledge of the industry, they may become Analysts, who are in charge of leading each team.

1

3Industry Analysts who have demonstrated knowledge and passion for the markets will be selected to become Portfolio Managers on the Investment Board, where they will make actual investment decisions for the SWS portfolio. Portfolio Managers may apply for a Chair position on the Executive Board, which oversees the day-to-day operations of SWS within their various areas of expertise.

Progression of SWS

becoming an SWS member• Brief applications will be given out on

Tuesday, October 3rd. They will not be posted online.– If you have a conflict with this Tuesday only,

please email recruiting@smartwomansecurities.com.

– Applications will be due Sunday, October 8th at 5 PM via email to recruiting@smartwomansecurities.com.

• Requirements for becoming an Associate– Attendance at all seminars (Wednesdays, 6-7:45

PM)*– Completion of the Investment Project– Unfortunately at this point we are unable to

accommodate students who will have conflicts.

* - The first seminar will be on Tuesday, October 3rd due to conflicts with the

Buffett Trip.

why should I join?

learning about investing

• Planning for your future• Financial independence• General knowledge• Personal interest

When asked about when women should start learning about investing, Professor Mahnaz

Mahdavi of Smith College said, "College is the right time for people to start thinking about this. It's the

first time the majority of people become independent, move away from home. Even if their parents are giving them money, they're the ones

who have to manage it."

why should I join SWS?• Ability to join a new organization in its

inaugural class and make an impact• Educational platform in which to learn more

about investing• Access to senior executive-level mentors• Opportunities for company visits and dinners

with representatives throughout the semester and into the spring.

• Chance to gain practical experience in the investment fund

• Join a community of like-minded women

Q&A