Reflection On The Group Acceptance Of Your Suggestions

Published Date: 02 Nov 2017

Student Name : Xu yuan yuan

Student ID : 1008007238

Matriculation No. : 20037834

Date : 16/4/2013

Word Count : 1281

CONTENTS

How did my own Initial Portfolio Perform Against my Group? .......................................................... 3-7

What Lessons did you learn? ....................7-8

Did my Group Portfolio Perform Better than my Individual? Should More of my Original Shares be Included? .......................................................8-10

3.1 Calculation

4. Reflection on the Group Acceptance of your Suggestions ....................................................10

5. Summary ..................................................10

1. How did my own Initial Portfolio Perform Against my Group?

The initial ten stocks are chosen from Manufacturing industry, food processing industry, transportation and logistic, finance and other industries. I choose these stocks according to the companies’ history, reputation and their financial statement, which shows the relevant data, such as the revenue, price earning, beta and dividend yield. These data can reflect the movements of stocks. The price earning can reflect the payback period, when the price earning is lower, the payback is shorter and the risk will be decreased. The value of stock is high. The dividend yield is the higher the better. Therefor, these data are important to help us compare the stocks when thinking about which one of stock should buy.

There are five members in our group, at the first, each member choose ten stocks, and we have 50 stocks in total. Then, we put the 50 stocks together, and discuss which is better to choose. We pick out the stocks which have longer history, and the prospect of the companies, which could have higher return in the future. In the end, there are two stocks of my initial portfolio were chose. The Singapore Airlines Limited and DBS Group Holdings Ltd have higher share price, and their beta are low in relevant.

Table 1: The statement of stocks in March 12, 2103

Table 1: The statement of stocks in April 8, 2103

The table of statement above shows the performance of initial stocks between March 12 and April 8. We have $100 million as total cost,in my initial portfolio, i divide them into ten parts, each stocks has $10 million. The brokerage cost are unified at $5000. After input all the data into excel sheet, the No. of Shares has been calculated out, it is $199161045.3 in total. As the market value in total is $94091747, the profit/loss is -$5908253.401, which means the stocks during this month was in loss.

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Table 3: The statement of stocks in four weeks

The table 3 shows the profit and loss during one month, the last portfolio gain is $9201942. It is clear that our group was in profit in last month.

2. What Lessons did you learn?

From this assignment, i found that it is difficult to choose a good stock and get along with our group members is also not that easy.

First in all, i knew that there two approaches for investors to analyze the stocks, they are technical analysis and fundamental analysis. This two approaches help investors evaluate the stocks, and decide which one is better to buy. This step was also difficult to me.

This is a project that needs a lot of time to search information and have to understand all the knowledge about stocks. For example, when i choosing stocks, i have to know the history of this company, and the statement of financial, the statement is helpful to understand the profit or loss in the past years. Because the statement can reflect the trading position of the company. And i have to search the update news about this company, in case if there is am incident that could effect the company’s price of stock. What’s more, i have to understand many theory that i never touched before. Such as what is the price earning ration, how to calculate the annualized profit, why to choose the stock which has lower price earning or higher beta. These questions have to be answered by myself.

After i learned, i knew that the price earning can reflect the payback period, when the price earning is lower, the payback is shorter and the risk will be decreased. The value of stock is high. The dividend yield is the higher the better.

Besides, i also learned how to arrange my time, l have to list a schedule to arrange my time, in order to save time and to right thing in right time. As a group member, i know how to get along well with my partners. we need to be mutual tolerance.

The last point that i have learned is the risk diversification. I know can not put all the eggs in to one basket. This theory is useful in our life and work. The risk is common in life and work, we have no idea to avoid it completely, but we can do something to reduce the risk.

Did my Group Portfolio Perform Better than my Individual? Should More of my Original Shares be Included?

After calculation, my group portfolio perform better than my individual. Because of the higher profit. However, my individuals were in loss. Here is the calculation of individuals and groups:

3.1 Calculation

The initial portfolio:

Formula:

Profit over 4 weeks

Profit over 4 weeks= (940,917,846.6-100,000,000) / 100,000,000= -5.9%

Annualized profit=（1- 5.9%）＾13 -1= -0.5464 or [-54.64%]

The group portfolio:

Profit over 4 weeks= (9201942.50-100,000,000) / 100,000,000=9.2019425 %

Annualized profit=(1+9.2019425%)ï¼¾13 - 1=2.147 or [214.7%]

From the calculation, it is clear that the group portfolio is in profit. Actually, the main reason of earning profit was due to the risk diversification, we din not put all eggs into one baskets. The ten stocks are chosen from different industries, in case of the stock price decrease at the same moment. This can reduce the losses if there is a "bear market". In the first week, the portfolio value is $99566933, which is less than $100 million. Then we just hold all the stocks waiting for the upward tendency. And in the next three weeks, our stock was in a status of earning profit, the portfolio value in all three weeks was higher than $100 million. And in the second week, we got the highest profit, which was $123015088.80. During the three weeks, we choose some stocks to sold out when the price was going down. All in all, the high return can contributed to the risk diversification. In our group portfolio, we mix different stocks in order to reduce risk. We mix stocks that belong to government, private companies and bonds. As for the initial portfolio, although the final profit is negative, there still exist some good stocks in the ten stocks.

4. Reflection on the Group Acceptance of your Suggestions

In my own opinion, the two stocks: Singapore Airlines Limited and DBS Group Holdings Ltd are the best in my individual portfolio. There is no else to choose or add into group portfolio. Because the other stocks performed not that good in last month. In my individuals, the final result shows that it was in loss. Even if i want to add some more stocks into group portfolio, my group members may not agree with me, because it would affect the whole stock portfolio, and the final profit value will be reduced. This is not good to our group results.

Summary

The main objective of this report is to analysis and compare the stocks that in my initial portfolio and my group portfolio. After analysis, the initial portfolio was in loss, however, the group portfolio was earning profit. The risk diversification helped a lot. It reduced risks and diversify risks to maintain the profit.