Securities Analysis - Fall

 

 

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Finance B8313-01. Securities Analysis

Profession Paul Johnson

The purpose of this course is to provide students with a real world view of the role and activities of an equity security analyst.  In the course, we will build a construct of how capital markets function, teach the tools as well as the “thought process” involved with security analysis, and, expose the students to the mental limitations we all bring to the activity.  The course will focus on three aspects of securities analysis: (1) understanding the process of analyzing companies; (2) understanding the valuation process; and (3) understanding the challenges of achieving success in a highly competitive capital market.

There is no formal structure to security analysis and the subject cannot be taught through books and readings alone.  Although certain books and articles do provide analytical tools, security analysis must be learned through practice.  Consequently, the course is split into two sections.  The first eight lectures will focus on the various tools of the security analyst to help in the investment process.  In the last two lectures, students will practice what they have learned by presenting an original company analysis and stock recommendation to the class.  We will wrap-up the course during the final examination period, although the course does not have a final exam.


Syllabus

 

We ask the students to answer the following two questions in class.  Here are my responses.

Is the market short-term oriented?

What is the difference between value and growth investing?

 

I have also written a couple of essays relevant to securities analysis.

Academy Awards, Sharon Stone and Market Efficiency

Competitive Advantage

How to think about scenarios in the analysis process

Shenanigans, Forensic Analysis and Short-selling

 

A flow-chart of the securities analysis process

A chart of risk levels

Valuation Matrix

 

Michael Lewis's terrific story of the Oakland A's, as told in Moneyball, offers an interesting parallel to investing.  I use this book, and its insights, to provide important instruction in my class on Securities Analysis.

 

Presentation Guide Lines

 

 

 

 

 

This page was last updated on 01/27/07.