Buying Equity Means Owning a Part of a Business

The Equities Department follows a value investing approach focused on German small- and mid-caps.

Value Investing

This concept, established by very successful and well-known investors like Benjamin Graham, Warren Buffet and Philip Fisher focuses on fundamental analysis. Value investors conduct a deep qualitative and quantitative analysis and thereby aim to understand the business of their investment target.

The MSMIF

The Munich Student Managed Investment Fund (MSMIF) is our real money fund. For organizational reasons it is separated into its own legal entity, however the Club's Equities team is its backbone. Our Analysts are responsible for developing investment ideas and covering stocks. By investing real money our members learn to be accountable and take responsibility for their decisions. Learn more about the MSMIF: www.msmif.de

Organization

The Equities team consists of junior and senior analysts. Newcomers receive extensive training in value investing and company valuation, leading to their first stock pitch. In weekly meeting we discuss investment proposals.

Screening

We constantly monitor a large variety of stocks through a watchlist using quantitative indicators. Interesting candidates are analyzed in greater detail.

Stock Pitch

A team of analysts evaluates the company. Using qualitative and quantitative criteria we aim to understand the underlying business and determine a fair share price. The resulting pitch is discussed in our investment committee.

Monitoring

If we conclude that the company is worth an investment, we continuously monitor its stock price as well as any news surrounding the company. Based on this analysis we reconsider our decision.

Fixed Income Investments along the Yield Curve

The Fixed Income Department applies the value investing approach on bonds.

Fixed Income Investments

Investing in bonds means allocating money for the long term. There are two ways to earn money with bonds. The obvious one is the periodically paid interest. The other one is appreciation to or above face value of the bond because of shifts in the yield curve or because of changes in the companies or countries ability to service and pay back its debt. Being the biggest securities market by volume it is not only thrilling to discover it, but also full of opportunities. We aim to benefit from those by applying a value investing approach, using a self-developed screening tool, to search for undervalued bonds and analyzing qualitative criteria.

Organization

The Fixed Income team consists of analysts with different degrees of experience. Team members learn about FI basics, debt markets, FI screening, credit analysis and investment strategies. In weekly meetings we discuss investment proposals and expand our knowledge.

Developing Alternative Strategies to Generate Steady Returns

This Department is concerned with the development of algorithmic trading systems to derive automated trading decisions.

Algorithmic trading

Algorithmic trading uses pre-programmed algorithms to drive trading decisions. This allows to trade by complex pre-defined instructions without the risk of losing money due to one's lack of discipline. Furthermore, such systems are much more efficient at processing the huge amount of information and noise that is present in today's markets and faster in execution.

Organization

The Department consists of several project teams, each focusing on a different algorithmic approach, as presented below. Our goal is to ultimately join all these projects in a single automated trading system.

Newcomers will start in one of our project teams, quickly developing expertise and contributing their own ideas. The single project teams schedule their meetings by themselves whereas community meetings are held for project milestone presentations and the formation of new teams.

Technical Analysis

Technical Analysis is based on the assumption that all relevant information is reflected by past prices. In this project we work on the automatization of common strategies and want to find out which combinations and strategies are best suited for different market situations and asset classes.

Sentiment Analysis

Sentiment Analysis aims on quantifying investors' opinions and emotions towards stocks and other investments. Based on data from stock market forums or Twitter we work on self-learning algorithms to classify comments and retrieve tradeable information.

Correlation Analysis

Correlation Analysis uses sophisticated statistic to find links between price movements of different stocks and asset classes. In this project complex data analysis and focus on delayed reaction of price changes play an important role.