Download IMIFC Newsletter What happened in the competition this week?

January 18th, 2016
IMIFC Newsletter
Vol. I Issue 7
Current Leaderboard
- TOP 15 YTD
What happened in the competition this week?
1.timothysamir 33.47%
2.tadrosre
12.84%
3.kimjon26
9.12%
4.mAsad
9.04%
5. rafayman
6.52%
6.lamwing9
3.99%
7.Valentin229
3.73%
8.OmarAliOsman 2.85%
9.howegord
1.30%
10.karimlij
0.99%
11.chotmura
0.76%
12.zhaoyu31
0.45%
13. NFatima
0.27%
Trader daasomar bought 470 shares of Chipotle Mexican Grill Inc. (NYSE: CMG) at $445.35/share.
14.morellca
0.13%
15.Sadaanan
0.00%
Chipotle has the characteristics of a business with potential for great growth opportunities. It has managed strong
revenue growth, progressively increasing margins, strong earnings growth, and a strong return on invested capital.
Best of all, the business has done this consistently over the last decade through a variety of economic conditions
and with negligible long term debt.
Remember, there will be numerous prizes awarded for
participants, ranging from
most risky trader to most diversified portfolio. So even if
you don’t place in the top 20,
there’s still a chance you will
get an award!
By Arooj Shakeel, SMA
Trade of the week
However the e-coli crisis has left the stock at valuation levels not seen since 2009. Shares are down more than 40%
from the highs, and 47% at one point earlier this week. The company will face an uphill battle going forward, but
management is taking steps in the right direction, such as kicking off an extensive media campaign in February to
get customers back into the stores, and indicating corrective actions they will take. Restaurants will apparently be
giving away free food to get customers back and win their trust. Chipotle's supply chain will also see further process
improvements to prevent such a recurrence of an event of this scale occurring again.
In addition, the board has recently approved a $300 million share repurchasing program, which will be added to the
current $1 billion buyback.
I believe that investors buying the stock at these levels will be handsomely rewarded.
By: Anwar Khan
IMIFC Newsletter
Page 2
What happened in the markets this week?
Macroperspective
White House proposing a cumulative $4
Billion investment into self-driving car
development
tential beneficiary, as well as Google which has accumulated the
most real-world driving data for self-driving prototypes than any
traffic accidents and signifi- other company. Although this plan does benefit many parties incantly improve safety on
volved with the development of self-driving vehicles, this is quite
The Obama administration on January America’s roads. His estian interesting move from the governments perspective since this
14th pledged to include $4 billion in the mate was that as many as
move will likely disrupt many as shown from about 12% of the US
2017 budget proposal for self-driving
25,000 deaths could have
population currently drives for a living. What will happen to these
car projects over the next 10-years. The been avoided last year if
jobs and this percentage of the population is yet to be seen, as well
government would remove hurdles to
this driverless technology
as the impact on the economy in the short run, but this revolutiondeveloping autonomous vehicles and set was able to be utilized by
ary development in the vehicle industry is undoubtedly the future.
further guidelines for them within the
the average driver. MoThe potential benefit of fewer accidents, auto repairs, insurance
next six months. The $4 billion will be bileye, which is a technoloclaims, gas consumption etc is sure to outweigh the negatives, and
used to finance research projects and
gy company that develops
it’s certainly a breath of fresh air to see the government overlookinfrastructure improvements tied to
vision-based driver assising the potential short term economic pain for the long term benedriverless cars. Transportation secretary tance systems that provide
fits associated with these vehicles.
Anthony Foxx said that autonomous
warnings for collision prevehicles had the potential to reduce
vention is an expected poBy: Brandon Black, UEC
Microperspective
Free Fall of Oil
The Canadian dollar and oil prices are
continuing to plummet, with the latter
nearing historic lows and a variety of
indicators suggesting the absolute bottom has yet to be reached. Despite oil
prices falling below $30, US shale producers who drilled their wells at $75 per
barrel in years prior are continuing to
produce since the initial cash outlay is
considered a sunk cost and the additional expense to extract and transport oil is
considered minimal. Further exacerbating the oversupply in the market is a
result of OPEC countries, including the
de facto leader Saudi Arabia, producing
at full throttle due to their unwillingness
to lose out on revenue. Although oil
consumption on a worldwide basis is
increasing slightly due to a reduction in
gas prices (the U.S. experienced roughly
3% growth from 2014 to
2015), consumption cannot
keep pace with the amount
of oversupply that continues to flood the market.
businesses. A main driver for Canada’s GDP has always been consumer spending, and if consumer sentiment erodes much further,
an impending recession could be well on its way.
Expected Impact on Financial Markets
Spiral Effect on Canadian
Economy
If Canadians begin to reduce their discretionary spending, not
only will the retail, manufacturing and the service industry all be
significantly impacted, investors will not participate in the equity
As long as oil revenues are
markets. Although typically a reduction in interest rates by the
depressed, the energy sector will continue to see job Canadian bank would have a positive influence on consumer
spending and investing, interest rates are so low that we are in
losses and reduction in
liquidity trap territory, meaning very little further stimulus is
investment, which will
negatively impact the
available. The general consensus is that markets will continue to
Canadian economy. How- devalue in the short-term; however, contrarian investors may see
ever, more concerning to
this as an opportune time to enter the market. As Warren Buffet
Canadians is the low value
once said “be fearful when others are greedy and greedy when
of the dollar which results
others are fearful.”
in reduced purchasing
power for consumers and
By: Omar Mansour, UCS
This Week’s Economic Calendar
MON
: [18]
Wipro Limited
(WIT) Quarterly earnings
TUES:
[19]
WED:
[20]
THURS:
[21]
FRI:
[22]
Housing Market Index
10:00AM
Goldman Sachs
Group, Inc. (GS)
Quarterly earnings
Bloomberg Consumer Comfort Index
9:45AM
Baker-Hughes Rig
Count
1:00PM
Bank of America
Corporation (BAC)
Quarterly earnings
Raymond James Financial, Inc. (RJF)
Quarterly earnings
American Express
Company (AXP)
Quarterly earnings
General Electric
Company
Quarterly earnings
Delta Air Lines, Inc.
(DAL)
Quarterly earnings
TD Ameritrade
Holding Corporation
(AMTD)
Quarterly earnings
Starbucks Corporation (SBUX)
Quarterly earnings
SAP SE (SAP)
Quarterly earnings