Last week, we sold CSCO at $21.99, for a profit of $240. While I can’t say we had any amazing insight into the next earnings report filed by Cisco on Friday, we did take a very disciplined approach to investing and sold when the stock hit our price target. Cisco reported drops in both earnings and gross margins that have contributed to its drop from $22 to its current level of about $18.70. In the long run, I still believe CSCO to be a good long term, value investment; however, due to the time constrained nature of the university desk investment fund, it is not likely to come back into CEF’s portfolio.
Wing-Ho C. - CEF
Sold CSCO, Asset Allocation
As an update of CEF’s investment fund, we just sold CSCO on Friday at $21.99 for a return of 12.25%. The fund’s current return is 11.49% after two and a half months and now mainly consists of a long position in COPX. Currently, we are researching a possible long play on ticker ABT.
After the first two weeks of school, most of the topics we have covered are still reviewing things we have learned before. In Portfolio Management we learn about asset allocation and investments utilizing the Capital Market Line and using concepts from optimization to find the most efficient portfolios. We see how this technology can be applied no matter what kind of assets a fund focuses on. I wonder if day traders etc. who are more focused on technical analysis also utilize these theories or if allocation is more focused on gut instinct and diversification simply comes through picking many different stocks that may not give the most efficient portfolio but is hopefully still less “risky” for the target rate of return.
Back from Break
It has been a relaxing winter break but it’s unfortunately time for me to leave Phoenix for the chilly East Coast once again. Over the course of the break, the CEF portfolio has faired pretty well with an overall return of just over 11%. We closed our first position and sold BP at $49.29 (bought at $44.37) giving us an 11% return on investment. Prior to the Gulf oil spill, the company had been trading just under $60 but it has sold off many of its assets to pay for the damages and fines. We felt that with that and among other reasons, it was time to take our profits ahead of the February quarterly announcement and seek other investments.
Among the many things that happened over the break, I was excited to see many interesting things come out of the Consumer Electronics Show. Particularly, I think Motorola’s Xoom tablet will give the iPad a run for its money and hopefully Apple’s response in the iPad 2 will continue to raise the bar. Motorola’s also announced an interesting new phone called the Atrix which can be docked to a laptop like add-on that turns the phone into a netbook of sorts with built in 4G access to AT&T’s network. If Google can take advantage of these new devices and load them with it’s Chrome OS, it can really start pushing the world toward a cloud based system that has been envisioned since the beginning of modern computing. OnLive, a cloud based gaming company, has already proved that high end computation and real time display of graphics is a viable system. If Verizon ever gets the Atrix and Chrome OS takes off, I can say good-bye to my laptop.
School starts up again next week so I will finally get a chance to see all my grad school friends again. Hopefully, we will all be getting interviews and subsequently internships for the summer.
End of semester and more about me
With the fall semester drawing to a close, CEF is meeting officially one last time for the semester today. I have had a great semester sharing and learning about everyone’s perspectives on financial markets. It has definitely been a long, tough semester with our first installment of grad school finally under our belts. Now that most of our finals are over, I’m looking forward to dedicating more time to the investment fund and trading over the winter break. Thus far, CEF is invested in COPX and CSCO. Thanks again to Brent Sullivan and the HedgeFundLive team for letting CEF participate in this great program.
I have been meaning to post this earlier but was delayed by finals and other projects at the time. Just to share a little bit more about myself, I’m from Arizona and had never seen falling snow until just this last month (I have been waiting to throw a snowball for a very long time). Needless to say, the weather in Ithaca has been quite a shock to me. My interests mainly lie in technology and gadgets like smart phones, tablets, etc. as well as in sports such as golf, tennis, table tennis, and wushu. I will admit that I do fit the stereotype for Asians pretty well but I am 6’1” so I still do my best to break the mold.
Introduction
Hi, my name is Wing-Ho Choi. I am the president and cofounder of the Current Events in Finance (CEF) student organization at Cornell University. I am a master of engineering candidate at Cornell’s financial engineering program and hold dual bachelor degrees in finance and economics from Arizona State University. CEF holds weekly general meetings where we meet to discuss and share different points of view about recent financial news. I am currently a member of the Technology sector analyst team for CEF’s investment fund.
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