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Professor Crocker H. Liu
Stern Advantage: Finance Module (Introduction to Security Analysis) 
(212) 998-0353 Office
(212) 995-4233 FAX
email: cliu@stern.nyu.edu
Summer 2005
9-95 KMEC
Office Hours: By Appointment
Website:www.stern.nyu.edu/~cliu

Texts:
Required

A. Damodaran (AD), 2nd Edition, Investment Valuation:Tools and Techniques for Determining the Value of Any Asset, Wiley
J. Siegel (JS), 3rd Edition, Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies, McGraw-Hill.

Class Packets: Lecture Handouts Packet is available from Undergraduate Dean's Office on 6th Floor of Tisch.

Grading Policy: Late mini-cases are not accepted
 
Mini-Cases (2)
60% (Each case is 30%)
Final Exam
40%

Mini-cases are due in class on the assigned date at the beginning of class. Students are not allowed to email their cases to me (I've had several emailed projects in the past that have contained malicious viruses that eluded both my McAfee and Norton Anti-Virus software). The Case Projects are an individual effort.  Rationale: Employers frequently ask students to submit an example(s) of a project done solely by them which demonstrates their analytical ability, their proficiency at financial modeling, and their  effectiveness at written communication. My intent is to provide students with a portfolio of their own work which they can use in the job interview process e.g. submit it to potential employers along with their resumes and cover letters.

Grade Distribution: Grading is based on the class curve

Computers and Calculators: Students should have an elementary understanding of how to use Excel. We will also go through how to use Excel in class.

COURSE SCHEDULE

 
Session(s)
Date
Day
Topic
Assigned Readings/Assignment (Book, Chapter)
1
7/8
Friday
Drivers of Capital Markets
Market Efficiency

Gold, the Federal Reserve and Inflation (JS, 11) 
Stocks and the Business Cycle (JS, 12)
World Events Which Impact Fincl Mkts (JS, 13) 
Reaction of Fin. Markets to Econ Data (JS, 14) 
Technical Analysis & Trend Investing (JS, 17)
Calendar Anomalies (JS, 18)
Behavioral Fin & Investing Psychology (JS, 19) 
2
7/11
Monday
Investment Strategies Stock Indexes (JS, 3)
Perspectives on Stocks as Investments (JS, 5)
Large, Small, Value, and Growth Stocks (JS, 8) 
Valuation of Growth & Tech Stocks (JS, 9)
Reminiscences of a Stock Operator (EL, All)

Case: Price and Earnings Momentum 2005 case (due on Tuesday, July 12)

3

7/12
Tuesday
Introduction to Valuation
Relative Valuation
Sources & Measures of Stock Mkt Value (JS, 6) 
Bull Market, New Economy, Age Wave and Future Stock Returns (JS, 7)
Introduction to Valuation (AD, 1) 
Approaches to Valuation (AD, 2)
Basics of Risk (AD, 4)
Fundamental Prin. of Relative Valuation (AD, 17)
4

7/14
Thursday
Relative Valuation (continued) Earnings Multiples (AD, 18)
Book Value Multiples (AD, 19)
Revenue & Sector-Specific Multiples (AD, 20)

Case: Relative Valuation 2005 case (due on Friday, July 15)

5

7/15
Friday
Midterm Exam  Bring calculator to class. Test is closed book.