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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