Spring
2009 BAD 370 Investments____ Syllabus
INSTRUCTOR:
Robert Irons OFFICE
HOURS: 3:30 – 5:00 PM MWF
PHONE: Work (708) 524-6841 e-mail:
PLEASE SHUT OFF ALL CELL PHONES
PRIOR TO THE BEGINNING OF EACH CLASS PERIOD.
CLASS MEETS: Class will meet
from 11:30 AM to 12:20 PM each Monday, Wednesday and Friday.
PREREQUISITES: Students must complete all
prerequisite classes before registering (ECON 260 and BAD 350), and are
expected to be proficient in all prerequisite material (algebra, statistics,
accounting, corporate finance, economics, and a high level of functionality in
Microsoft Excel).
TEXTBOOKS: Fundamentals
of Investments, Fifth Edition,
Fire
Your Stock Analyst, (2006), Harry Domash, Prentice-Hall Publishing, ISBN 0132260387.
Supplementary
materials such as outside readings will be delivered
via the MyDU web page for the course. Students should
have access to (and proficiency in) Microsoft Excel, a reliable internet
connection, a valid Dominican email
account, virus scanning software, a portable USB flash drive and a hand-held
calculator. Financial calculators are not recommended.
COURSE DESCRIPTION: BAD 370 is a one-semester course in investment management.
The course begins with a guided reading of the classic A Random Walk Down Wall Street, which details the evolution of the
ideas in investments. Chapters from the Jordan & Miller text provide
additional background. The Domash text features guided exercises that teach
students how to conduct their own analysis of a company and its stock. Topics
include valuing a stock and forecasting target price ranges, analyzing stock
charts, and assessing the profitability and financial fitness of the firm. Students
refine these exercises into individual stock reports that are presented to the
class at the end of the semester. Students will divide up into teams, with one
or more members of each team explaining 1.) how the particular stock/industry
was chosen, 2.) the current state of the industry in which the firm operates,
and 3.) the specific reasons for recommending the stock in question. The course
also covers the practical aspects of how to speculate and manage risk with
option contracts on individual stocks and stock indexes.
This course will be run more like a seminar than a lecture
course. In any given week, assignments consist of an eclectic collection of
popular and practitioner readings, textbook questions and problems, and
exercises from the Domash text. Seminars emphasize student participation, which
requires a greater level of preparation than a lecture-based course, and
results in a different type of learning. While learning in a course usually
involves mastering a set body of knowledge, learning in a seminar is a more
fluid experience. A properly facilitated seminar is a learning journey, where
all participants, including the instructor, explore and question the depth and
breadth of their knowledge, and share this questioning experience with each
other. To participate in a learning experience such as this, it is important
that participants discard any fixed expectation of exactly what they will
learn. The only thing that is pre-determined at the start of the semester is
the topics to be explored; exactly what we will learn remains to be discovered.
OBJECTIVES
OF THE COURSE:
Course learning objectives include:
BRIEF OVERVIEW OF MY TEACHING/EDUCATION PHILOSOPHY: Business schools are professional schools.
Programs should focus on developing competent and ethical practitioners of
business, similar to the way medical schools develop competent doctors and law
schools develop competent attorneys. Students are best served by courses that
include cases and projects that simulate real-world business problems and
situations and highlight the skills students have acquired. These skills should
directly contribute to improved professional performance. Theory is useful when
it provides a conceptual framework that helps students identify classic
business themes and break down complex situations into more manageable
components so that problem-solving and analysis becomes easier.
HAND-HELD CALCULATORS:
Students will need
to be able to solve problems on a hand-held calculator for the in-class exams.
If a problem requires calculation, a long-form solution to the problem must be
presented in order to receive any credit. Correct answers that are not
accompanied by explicit calculations that support the given answer will receive
zero points. For this reason, financial calculators are not recommended for the
course, as students tend to master the menu functions without understanding the
underlying mathematical formulas. Students are expected to read their
calculator manuals and learn how to use al relevant functions such as
exponents, roots, brackets, memory and decimal places.
_______________________________________________________________________________________
Some of the formal class policies listed below, particularly the ones on
attendance, class participation, completion of homework, etc., may appear
unnecessary, especially for an adult audience. Experience has taught me,
however, that the small amount of time and effort it takes to make class
policies and other expectations clear at the beginning of the semester can save
a lot of time and effort later by preempting unnecessary misunderstandings.
Thank you for your patience and attention to these items.
OFFICE HOURS AND APPOINTMENTS: For students’
convenience, office hours will be held during the period listed on this
syllabus. For office hours outside that time period, priority will be given to
those students who contact me ahead of time and schedule an appointment during
this time block. If the time block fills up, students may schedule appointments
on different days during the hours when I am on campus. Students are always
welcome to drop by my office informally, but calling or emailing ahead is
recommended to ensure that I will be available during the preferred time frame.
EXAMINATIONS: Dates for the exams are listed
below and in the syllabus topic outline. Students are expected to arrange their
schedules so they can attend all regularly scheduled exams and exercises.
GRADING/EVALUATION OF STUDENTS: A
numerical final class average for each student will be calculated as a weighted
average of the following evaluation criteria:
|
Class
Contribution |
10% |
|
First
Mid-Term Exam |
20% |
|
Second
Mid-Term Exam |
20% |
|
Stock
Analysis Project |
25% |
|
Final
Exam |
25% |
|
Total |
100% |
|
A |
>
92.9% |
|
A- |
90% -
92.9% |
|
B+ |
87% -
89.9% |
|
B |
83% -
86.9% |
|
B- |
80% -
82.9% |
|
C+ |
77% -
79.9% |
|
C |
73% -
76.9% |
|
C- |
70% -
72.9% |
|
D |
60% -
69.9% |
|
F |
< 60% |
Students who have an A or A-
average going in to the final exam can choose to opt out of the final exam and
take the grade they have earned at that time as their final class grade. To be
eligible for this option, students must have at least a 90% average for both
mid-term exams, the stock analysis project, and for class contribution.
Students eligible for this choice will be notified during the week before the
exam, once the stock analysis projects have been graded. Once a student chooses
to take the final exam, however, it must count for 25% of the final grade.
There is a maximum of 100
achievable points. After all the criteria are evaluated, an appropriate grade
distribution based on final class averages will be constructed. Students with
final class averages conforming to the traditional 90/80/70/60 breakpoints will
earn grades equal to A/B/C/D. In general, grades of A
are awarded to students who display consistent excellence in terms of
attendance, attitude, preparation, commitment and achievement. Grades of B are
awarded for above average achievement and a determined commitment to excel in
the course. Grades of C are awarded for average work, and for students that
demonstrate commitment but may not be performing at the highest levels. Grades
of D are awarded for below average work, and for students that display less
than adequate commitment to mastering the material. Grades of F indicate
failing work, and/or an inadequate commitment to mastering the course material.
Grades are not rationed. There is
no limit to the number of grades in any grading category that can be awarded.
Grades are determined only by the items listed in this syllabus. There are no
"extra credit" projects or alternative methods of evaluation. Grades
are based on observable outcomes such as exam performance, project quality, and
students' contribution to creating a positive class environment. Unobservable
inputs such as study time or effort do not affect course grades.
DISCLAIMERS. The detailed topic outline below
shows the proposed course schedule. Some flexibility across weeks should be
expected, but in general I'll try to adhere to the schedule as much as
possible. While students are encouraged to pursue as much additional reading as
they like, class time will focus on the material described in the topic outline
below.
I reserve the right to change the
methods of evaluation and the weights assigned to each evaluation component at
any time during the semester. This may
include, but is not limited to, spot-checking homework assignments and lecture
notes and short unannounced quizzes.
Writing and Organization. Students are
expected to write with clarity and precision, using the minimum number of words
to communicate the maximum amount of information. Concise, focused, organized writing is the
goal. Proofread thoroughly, because
deductions are made cumulatively for all spelling and grammatical errors and
any unclear prose (you will lose at least one point for every error, and past a
certain threshold, more than one point will be deducted for each error). Tips on good writing and project organization
are free for the asking; please call or stop by the office and I'll be happy to
help.
Course
Organization, Homework, etc. Solutions to the Jordan
& Miller Test Your Investment Quotient problems are in the back of the
textbook. The Domash exercises are
primarily self-study. Students should
show up for class with each week's Domash analysis completed on a new page of
an Excel workbook they maintain and update during the semester. Homework assignments are spot-checked and
graded by asking students to present solutions during class. Simply consulting the posted homework
solutions does not constitute fulfillment of the homework requirement. Students are expected to understand the
solutions to all assigned homework and all the stock analysis exercises they
complete. Exam questions in this course
come from five sources —
Students
are expected to study the topic outline guide and dates, gauge the workload in
advance and arrange their schedules so that all work is completed on time every
week.
The Stock Analysis Project. 25% of your course grade
will be determined by the stock analysis project and presentation. The project
is based on exercises from the Domash text.
The goal is to produce a slightly scaled-down version of a professional
stock analysis report. The stock
analysis project is due the last week of class, when each team will give a 10-15
minute in-class presentation of the highlights of their analysis. A hard copy of the report is due, along with
a Word file, well-organized supporting spreadsheet showing all the calculations
that went into the report, and a PowerPoint presentation of your findings and
conclusions.
Class
Contribution. 10%
of your grade is categorized as "class contribution," explained in
greater detail below. This reflects my
cumulative impression of your contribution to the course during the
semester. Class contribution measures
class participation as described below, as well as your contribution towards
creating a positive class environment. A
positive class environment is fostered when students conform to class policies
such as those listed below:
·
have
good attendance, including attending the first class session and all exams and
exercises;
·
be
punctual (class begins promptly at 11:30 AM);
·
be
fully prepared for every class meeting (including being ready to pass quizzes,
discuss the assigned
readings, present solutions to
assigned homework, and ask good, focused questions);
·
turn
off all beepers, cell phones, PDAs, and other electronic devices;
·
give
your full attention to whomever has been granted the floor and refrain from
side conversations,
newspaper reading, or any activity
that is distracting to the class (non-class activities are prohibited
during lecture; e.g., surfing the
web, checking email, reading non-class materials);
·
contribute
to class discussion in a courteous and professional manner;
·
read
from or present your homework notebook upon request (see policy on homework
notebook and
lecture notes above);
·
turn
in all work on time.
What
Constitutes Good Participation? I expect that
everyone will want to participate enthusiastically in all class
discussions. Good questions are at least
as good as, and sometimes better than, good answers. To ensure maximum participation, I ask that
you curb your enthusiasm only to the point where you refrain from calling out. Please signal your desire to participate and
I will call on you ASAP. If someone has
already participated two or three times, I will first solicit new input into
the discussion before calling on that same person again. Opinions prevail when they're based on solid
reasoning that's communicated eloquently and concisely, not because someone is
willing to speak louder or more forcefully than others.
It is the instructor's
responsibility to manage the discussion environment and grant the floor to a
speaker. Diversity of opinion
contributes to the quality of the course, so I appreciate your courtesy in
allowing me to create an inclusive class discussion environment and solicit
contributions from the greatest number of students. It will sometimes be necessary to interrupt a
student's contribution if it is too lengthy or rambles off topic. Learn to take this in stride; you can always
make up for it the next time you're asked to participate. Students will notice a marked increase in the
focus and quality of everyone's contribution as the semester progresses and our interaction increasingly becomes based on fact and
analysis.
PLAGIARISM: Plagiarism is the use of another
person’s work or ideas without giving credit to the originator. If plagiarism is suspected, the parties involved will receive a zero for
the class and their conduct will be reported to the administration, to become a
part of their permanent record.
ATTENDANCE POLICY. Attendance is an important
component of your success in the course. Lectures are drawn from a wide variety
of background materials, and there is a substantial amount of technical
material that requires significant build-up to present effectively.
Additionally, most class sessions will include facilitated discussions on
pre-assigned topics. Missing many classes and/or being chronically late not
only affects your understanding of the material, but imposes costs on other
students when you are not present and fully prepared to participate in each
class session. You must be able to attend class in order to contribute and
participate. The recommended number of absences in this course is zero, but
students will be allowed to miss up to 3 classes before incurring a mandatory
penalty. Beginning with the 4th absence, students' final course averages will
be reduced by 5 points (based on a 100-point scale) for each additional
absence. Students are required to attend the first day of class and must be
present for the in-class exams (dates provided in the "topic outline"
at the end of the syllabus), and to provide advance notification of absences
via e-mail.
MAKE-UP POLICY. Students should not assume they
will be granted automatic extensions or make-ups if they miss homework and/or
exam deadlines without advance permission. Waivers from homework, exam, or
other course requirements or deadlines, including permission to miss and make
up an exam at a later time will be granted in writing, and only for
extraordinary circumstances (see below). To avoid misunderstandings, there will
be no verbal waivers from course requirements or deadlines.
EXTRAORDINARY CIRCUMSTANCES. Students
encountering genuine emergencies or other extraordinary circumstances should
contact me as soon as circumstances allow. Barring truly extraordinary circumstances,
however, students are expected to adhere to the course schedule and complete
all exams, assignments, and other course requirements on time. Students who
fall out of contact for an extended period of time and miss deadlines without
advance explanation will be assigned a grade of "F."
COMMUNICATION CHANNELS. E-mail is the best way to
contact me. Students are always welcome to call me in the office, but if I
don't answer the phone you might get a faster call back by sending an e-mail
with your contact phone numbers and preferred contact times.
GRADING AND TIME COMMITMENTS. To earn a
passing grade, students should demonstrate a strong desire to obtain complete
mastery of the subject matter in accordance with the depth and breadth of my
expectations. I expect everyone will give this course high priority throughout
the entire semester, and arrange their schedules so they can devote whatever
time is required to master the material. It would not be unusual for some
students to find they need to spend 7-10 hours or more per week on the course,
over and above the 3 hours per week spent in the classroom. A substantial
amount of the coursework must be completed independently, by following homework
solutions provided by the instructor. Class time focuses on specialized and
technical topics, and comprises only a small component of the total course
experience.
COURSE
OUTLINE:
|
Week |
Malkiel |
Jordan & Miller |
Domash |
Discussion
Topics |
|
1/16 |
|
|
|
|
|
1/19 - 1/23 |
Chapters
1-5 |
|
|
|
|
1/26 – 1/30 |
Chapters
6, 7, 8, 9, 11 |
|
|
|
|
2/2 & 2/4 |
First Exam – |
|||
|
2/6 – 2/13 |
|
|
|
The
Equity Premium |
|
2/16 – 2/20 |
|
|
|
|
|
2/23 – 2/27 |
|
|
|
|
|
3/2 – 3/6 |
|
|
|
Fundamentals
& Intrinsic Value |
|
3/16 & 3/18 |
Second Exam – Jordan & Miller Ch. 4, 5,
6, 7; Domash |
|||
|
3/20 – 3/27 |
|
|
|
|
|
3/30 – 4/3 |
|
|
|
Shiller vs. Siegel |
|
4/6 – 4/8 |
|
|
|
Market
Signals |
|
4/13 |
|
|
|
|
|
4/15 – 4/24 |
Stock
Analysis Projects and Spreadsheets Due – In-Class Presentations |
|||
|
Week of 4/27 |
Final Exam – |
|||