Hello Everyone! Hope you all had a good time in San Francisco!As part of your assignments for this session, I want all your teams to open an account with this stock game. Many of you have done so all ready. Please thank Sarahi effusely for setting this up for all of us! There are three major aspects about this Assignment:
I. Team PortfolioYou will manage a portfolio, starting at $1 Million, in play money. The goal of the exercise is two fold: Start to get you to understand the market, but even more important, start to get you to think analytically about your decisions.
II. Trading BlogA major part of your homework from now on will be to make trades in your portfolio. But before making a Trade, you will need to record your reseaons as to why you are making a particular trade in a journal like "Trading Blog" which I will create for you and link off of your company websites.
N.B.: Trading Blogs will only be accessible to your other team members, me, and your counselors for review, in order to protect your trading strategies.
In this "Trading Blog" I want you to write down the key reasons why you are making a trade. Cite your sources for your data. While you do not have to share the information you found that impacted your trade, it is strongly encouraged that after you find some useful sites, to share them with the other teams here on our class Blog.
This habit of writing down your reasoning before and after your trade will help make you rich!!!Don't believe me - believe George Soros - a multibillionaire financier - who wrote a terrific book "The Alchemy of Finance" in which he recorded for two years his trading decisions. Many trades he lost money on, but then on many others won. His goal was to try to become a better trader...and it worked! Many smaller, successful investors also do this process, and over the long run it definitely works. Warren Buffet also is known to follow a similar self-analytical process in order to improve his performance.
III. Combine Trading Blog with your Business Plan WebsiteIn order to incorporate this game into your other major assignment, the building of the Business Plan Website, I want you to select 4 to 5 companies that may impact your business, and include them in your portfolio.
These companies may (or may not) be obvious ones. By developing this list, you are also creating your "Industry Analysis" and "SWOT" analysis for your company. I assure you that successful companies - even (and perhaps especially) small ones, keep tabs on how other companies may impact them. Remember the sagacious title of Intel's Mr. Andy Grove's book "Only the Paranoid Survive"
Here are a couple of quick ideas to get you started:1. Look at your material suppliers, and service providers
Example: if you make icecream, where do you get the ingredients? Given recent problems in health inspection (i.e., mad cow disease), how will this impact your production costs?
2. Look at the logistics
Example: Will you use DHL, UPS, an/or Fedex to deliver your goods? If so, what will happen to your company's costs if these delivery prices go up, due to say increase in fuel costs for these companies?
3. Dependency on Intellectual Property
Example: Say you wanted to customize SmartCars, or offer custom made videos. How will copyright and trademark laws impact your costs?
4. Availability of Specialized Employees
Example: If you are making clothing using cutting edge technology, you will need Research and Development. Who has this expertise? Do you want to hire them directly, or perhaps do a joint venture and/or licensing with the original inventors?
National budget deficit--total debt as a percentage of GDP: