The document discusses a simple but effective portfolio strategy of buying favor stocks and shorting out-of-favor stocks. It focuses on using both fundamental and technical analysis, with more emphasis on technical analysis for shorter investment periods. As an example, the document discusses investing in Nokia by going long while shorting Apple in late 2012. This was based on Apple introducing a disappointing new iPhone 5 after Steve Jobs' passing and Nokia partnering with Microsoft's new Windows Phone operating system to better compete with iOS and Android. The trades proved profitable as Apple's stock dropped 40% in the next 6 months while Nokia increased 60% in the next 3 months.

1. Simple but Effective
Minzhi Qiu

2. Simple but Effective
• Portfolio Strategy:
Buy favor stocks and short out-of-favor stocks
• ‘Fundamental + Technical’
The shorter the investment period is the more I will
focus on the event that could cause investors’ short
interest on a stock.
The shorter the investment period is the more I will
rely on Technical analysis.

3. Fundamental Analysis
• To care more about services and products
rather than only focus on the numbers on the
financial statements such as top line and
bottom line growth, etc.
• Example: different stocks recommended by
marketing management lecturer and financial
management lecturer.

4. What was happening?
•
•
•
•
•
The iphone 5 was introduced at
September 12, 2012.
It was the first iphone after ‘Steve
Jobs era’.
It looked ‘longer’.
It was disappointing.
The iphone segment generated
about 50% of the revenue for
Apple.

5. iphone

6. What happened
•
•
•
Apple announced first
dividend since 1995
Changed the length-to-width
ratio on iphone
Tim Cook Apologized for
Apple's Maps
Thinking
•
•
•
Switch in strategy and
organization culture?
Will it lead to any conflict?
Are those drivers which
drive the past growth of
Apple still there?

7. What else was happening?
Microsoft was going to release
its windows phone 8 operating
system
• Nokia finally got something to
compete with ios and android
• The gap between Nokia smart
phone and iphone would be
filled
• It was a totally different user
experience
• People love diversity
•

8. iphone
Lumia

9. My Decision
• What did I do?
Buy Nokia and Short Apple.

10. Technical Analysis
• Short Apple on Oct.10 at $639.

11. • Buy Nokia on Nov.19 at $2.91.

12. What happened after that
• Apple’s stock price
dropped about 40%
in the next 6
months.
• Nokia’s stock price
increased about
60% in the next 3
months.

13. THANK YOU
Any Questions?