1. Tej Patel (Primary User) Pateltej@udel.edu
Preet Patel Preetp@udel.edu
Hillary Khan HaKhan@udel.edu
Group Name: TPH
Group Number: 38
Summary
The objective of our team comprising of Hillary Khan, Preet Patel and myself (Tej Patel)
was to show a profit within our portfolio by the end of the time span from September to the end
of November. We have all heard the slogan ‘greater the risk greater the reward’ and that is
exactly what we planned on doing, to try and beat out the competition. The competition in this
case is the S&P 500 index (and the rest of the class, for good measure).
In comparison to the rest of the class we surpassed both the benchmark (S&P 500) and
the rest of our classmates. The group of TPH ended with a return of 3.26% which amounted to
$32,637.96. The group that came in second place (jgreers) ended up with 1.02% which amounted
to $10,201.79. When it came to the S&P500 due to late decreases in the beginning of November
the benchmark ended up in the negative with -.83% for a loss of $8,288.13.
Our original goal for a return was set to approximately 8%, due to economic downturn
during and after the elections the stock market slipped up. In September the S&P was at roughly
1500 points, after the brief meltdown the S&P dropped down to 1350 points, within a span of a
month and a half. So we did not necessarily meet our benchmark of and eight percent return but
we did meet our goal of surpassing the S&P and the rest of our classmates.

2. - S&P500
Figure 1.0 Source: Google Finance
As you can see the S&P was pretty constant between the months of September and
October in the 1420 – 1460 range, then late October into early November it plummeted.
Figure 1.1

3. This was the overview of Portfolio TPH. As the S&P dropped our portfolio also suffered,
but thankfully we still managed to keep a higher return over the benchmark. The late October to
early November drop in Standard and Poor’s has a great correlation with the drop in the
portfolio.
Investment Strategy
In our Investment Policy Statement we stated that we would diversify between stocks,
mutual funds, bonds and etc. Also with the stocks we were going to diversify with different
industries.
We did not end up venturing into futures, foreign exchange, bonds and etc. However we
did end up with a wide variety of stocks in our portfolio. The industries we ventured in were
conglomerate, construction services, medical, insurance, tobacco, energy, aerospace and most
importantly technology. We had a bulk of technology stocks because we figured we should take
advantage of the tech bubble while it lasts.
Figure 1.2 Source: StockTrak

4. The open positions page on StockTrak above shows the array of stocks we invested in,
which come from a vast amount of industries. “You shouldn’t put all your eggs in one basket” is
a common saying that applies here; we figured if we banked on one industry and if that industry
ended up failing (ex. 2008 Real Estate Crisis) than we would lose a massive amount of capital.
This is what led us to diversify and also find those companies that have been on the upside as of
late. The only reason we began losing money towards the end was because we did not anticipate
the shift in the market during the elections. Otherwise we would have been spot on for our goals
listed in the investment policy statement from the beginning of the semester.
I figured this strategy would help us achieve our 8% goal (or the goal of surpassing the
benchmark) because it is a common tactic used in trading today by the professionals. We did not
leave our eggs in one basket, we also tried to buy low and sell high. The cliché rules are
overused but they still do come in handy from time to time.
In figure 1.2 it shows there are twelve different stocks that we purchased shares of, all
from different industries. There were a few major stocks that we all were set on purchasing.
Those stocks are the following:
1. Apple (AAPL) – This stock choice was pretty self-explanatory. For the past ten years
Apple has been dominating as one of the greatest technology stocks on the market. Apple
has increased from $7 per share all the way to its current $600 per share (just in the past
10 years). Also in September Apple hit its all-time high at a little over $700 per share.
We ended up making $26,010.46 on the apple sale as stated in Figure 1.2

5. Figure 1.3 Source: Yahoo! Finance
2. Google (GOOG) – Google was another tech stock that we decided to go with, for the
same reason as Apple, they have been doing exceptionally well for years now. Google
also hit an all-time high in the stock market during our simulation, peaking at about $768
per share.
Figure 1.4
Overall we ended up losing about eight thousand dollars because we longed Google; but
we made profits of about 26 thousand with our investment in Apple (Figure 1.2).
Analysis
Beta is a measure of an assets systematic risk, meaning what economic factors affect the
market. In terms of Beta, the stocks in our portfolio are quite diversified. We have various stocks
with a beta less than 1 and greater than 0 indicating the stock will fluctuate closely but not
exactly to the index. Our portfolio also contains couple of stocks with a beta greater than 1
indicating that the asset will fluctuate exactly as the market does. I noticed all of our stocks
followed one of the two characteristics. Google was one of the stocks in our portfolio that tanked
and left us thousands in the hole. Below is a picture of the index, and the circled area indicates
when the market dropped. Picture 2 is a chart of Google stock (Beta=.91) and the circled area
indicates when Google had a negative return. There is a strong correlation between Google and

6. with the index shown below. Our portfolio did not contain assets with a Beta less than or equal to
0. As these assets have no correlation with the market we managed to keep systematic risk to a
minimum.
1.
2.
During this stock simulation, our group has learned that it’s quite instrumental to analyze
and, if possible, follow the market trend for the sake of wise investment. Hence,
microanalysis of the market is equally, and sometimes more important as the number
analysis. Since the stock simulation only lasted for three months, our group mainly did the
short-term analysis. Based on our analysis, the world’s financial market has become more

7. volatile and unpredictable for the short run, primarily because the global economy grows
sluggishly and involves more risky events which gives way to increasing uncertainty. Several
reasons are illustrated as follows:
o The euro zone debt crisis is the main reason for all the issues. The debt problem in
Europe has become persistent and pervasive. Greece experienced the most serious
economic instability. Simply, Greece has borrowed much more money than they
can pay back. Greece now has a new socialist prime minister that has been
elected, a prime minister that is not one for change and austerity, so it seems like
Greece will continue in their debt crisis.
o Spain is also teetering on the brink of defaulting on their debts. As their
unemployment level has risen to a record 25 percent there have been a lot of
recession fears. Also Standard and Poors have downgraded their debt to BBB+
from their original A rating. This is because Spain’s housing bubble was even
larger than the United States housing bubble, so when the bubble popped, it had a
much greater effect.
o Even the United States is struggling to recover from its greatest recession which
occurred over 4 years ago. Although the country is technically “out” of the
recession, unemployment is teetering above the natural rate and is in no rush to
return to a normal rate that would represent a healthy economic state. Also, the
erratic market gives insight to the uncertainty of investors – many times
throughout the duration of the simulation, news would bounce back and forth
between the hopeful recovery of the market and this hopeless post-recession time
we are stuck in. The inconsistency in the news just added more confusion to an
uncertain time.
Overall, the crises that have hit many of the world’s largest economies has made it
difficult to identify which stocks will perform better than others. Had the markets been more
stable we believe that our stocks would have returned more or at least mitigated the losses we
incurred.
Throughout the course of the simulation we have learned a lot about the stock market.
We gained valuable experience as to how the stock market works; also we learned that

8. diversifying your portfolio is the best way to limit your losses and even increase potential for
profits. One thing I learned about my group is all of us are very ambitious. The reason we had
the urge to achieve our goals of beating out the benchmark and the rest of our classmates, is
because of the ambition. Another thing we learned is that we should always buy low and sell
high, we invested in Google when they were at their all-time high, when that is technically the
worst time to invest. All in all we learned a lot from the simulation and this will definitely help
for our future endeavors.