Honors Capstone Project
Date of Submission
Capstone Prize Winner
Won Capstone Funding
Corporate Finance | Finance and Financial Management
Academic finance courses teach the underlying principles of portfolio management. Diversify your portfolio to eliminate idiosyncratic risk, match your portfolio beta to the risk appetite of your investors, invest in companies exhibiting earnings per share growth, and your fund will beat the market. More or less, this is the mindset of the herd, but following the herd never gets you ahead. Warren Buffet “attempts to be fearful when others are greedy and to be greedy only when others are fearful.” True investors ignore the movements in the market, and focus their energies on discovering unrecognized intrinsic value. As such, value investing hinges on the belief that markets are inefficient because inefficient markets result in short term prices unrepresentative of intrinsic value, thus presenting investment opportunities.
I was introduced to the principles of value investing through my participation in the Orange Value Fund, a value investing hedge fund administered through the Whitman School of Management. Fernando Diz, an associate professor at the business school, is the managing director of the fund. The fund models its investment approach after Martin J. Whitman’s investment philosophy. The philosophy is simple: buy “safe” and “cheap” investments, but the practice is difficult. To be considered “safe,” a company must pass a rigorous examination of its industry, competition, top management, directors, and capital structure. To be considered “cheap,” the security must be trading at a significant discount to its estimated intrinsic value. My Capstone Project is a compilation of five research reports on the following companies: the Bristow Group, EnCana Corporation (now EnCana and Cenovus Energy), Ship Finance International Limited, Google, and GameStop Corporation.
Glick, Aaron, "Orange Value Fund Research Reports and Valuations" (2010). Syracuse University Honors Program Capstone Projects. 711.
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