logo about writing tools
teaching data blog



Introduction to Instructor's Manual: Investment Philosophies



        I do not teach this class as much as the valuation and corporate finance classes but I do know that this can be a challenging course. Students often come in with strong views on what works and what does not and are sometimes resistant to information to the contrary. Some of them also want easy answers and ways to beat the market and are severely disappointed when there are none forthcoming.

Teaching Material: Overheads and Instructor's notes

Semester Course on Investment Philosophies: As a precursor, the notes that you will see below are for a 27-session investment philosophies class. The sequence in which I introduce the topics and the material that goes with each are shown below:



Lecture Notes


  • Introduction to Cours
  • Overview of Portfolio Management
  • Investment Philosophies

Introduction to Investment Philosophies


Elements of Risk

  • Equity Risk and Return
  • Bond Default Risk and Return

Understanding Risk


Valuation Basics

  • Discounted Cashflow Valuation
  • Relative Valuation



Trading Costs and Taxes

  • Components of Trading Costs
  • Taxes and Returns

Trading Costs and Taxes


Market Efficiency

  • What is an efficient market?
  • Testing Market Efficiency
  • Performance Evaluation

Market Efficiency


Technical Analysis

  • The Random Walk Hypothesis
  • The Rationale for Technical Analysis
  • Strands in Technical Analysis

Technical Analysis and Charting


Value Investing

  • Passive Value Investing
  • Contrarian Value Investing
  • Activist Value Investing

Value Investing


Growth Investing

  • Passive Growth Investing
  • Activist Growth Investing (Private Equity and Venture Capital)

Growth Investing


Information Trading

  • Before information gets to market
  • After information reaches market

Information Trading



  • Pure Arbitrage
  • Near Arbitrage
  • Pseudo Arbitrage
  • Long Short Strategies and Hedge funds



Market Timing

  • Timing Strategies
  • The Record on Market Timing
  • Market timing and Security Selection

Market Timing



  • Designing Index Funds
  • The performance of managed funds
  • Enhanced Index Funds



The Closing

  • The Choices
  • Choosing an investment philosophy
  • Testing whether it works for you

Closing Presentation


Review Session



There are about 500 overheads overall in these powerpoint presentations but it is fairly speedy going since much of it just reports on where the evidence stacks up. You have plenty of time in this course to have guest speakers who can talk about individual investment philosophies or to have discussion sessions where students can talk about investors who have succeeded with each investment philosophy. 

Quarter Course on Investment philosophies(19 –20 sessions): If you are doing a course that lasts only 19 or 20 sessions, I would reduce my coverage of each investment philosophy to two sessions from three and perhaps skipping the introductory session on risk (since it is likely to be covered elsewhere)

4-5 sessions on investment philosophies: If you decide to incorporate investment philosophies into a class on another topic (say investments), you might want to use the shorter version of the lecture notes that provides the high points of the course.

Projects and Quizzes

Investment Philosophies Project: The most effective way to grade students going through the class is to make them develop an investment philosophy, come up with investment strategies and then test them.