expected returns of possible investments

[Trent Ball]

These numbers are the average of daily returns since February 1st,
therefore they are our expected daily returns for these assets,
unless someone has any news regarding these assets that may increase
or decrease our optimism regarding.

IAU= %-.065
ixc= %.123
IYW= %.249
EWHS= %.428
EPOL= %-.004
HDV= %.132
WOOD=%.145
EIS=%-.186

[Trent Ball]

Please look these over and ponder how you think we should weigh these
assets in our portfolio. Please try to provide input tonight so i can
make the trade either tonight before i fall asleep or tomorrow
morning. We need to have a good idea for our allocation weighs
before i can make the trades tomorrow.

[Trent Ball]

No one has responded with any ideas on which assets we should invest
in/how we should weigh the assets. Here are the variances of these
assets since February 1st. Just in case you need them to run an
optimization problem. IF NO ONE RESPONDS TO THIS THREAD I WILL NOT
MAKE THE TRADES. We need to have input so i can have a good idea as
to what we prefer.


> IAU= .000205
> ixc=.00009
> IYW= .00005
> EWHS= .000265
> EPOL= .000309
> HDV= .0000104
> WOOD=.000122
> EIS=.0000875

Thank you
Trent

[Trent Ball]

Just to be clear, the variances above are the variance of daily
returns not asset price.

[Nayab Khan]

Let's say we're trying to get a 5% target return this week (in which
case, let's potentially rethink our exit strategy of 3%?)

E(r) = summation of all the weights and expected returns

0.20 - EWHS - small cap hong kong
0.20 - EIS - keep in mind we're shorting EIS
0.10 - WOOD - forestry which has been on a tear this year. forestry
companies according to market data on WSJ has been up like 10% this
year. it seems like a safe bet.
0.15 - IYW - big tech firm
0.05 - EPOL - poland - i put less in here, as compared to in others
because it has a slightly negative expected return to date this year)
and because if you look at a graph of its historical prices, it's
super super volatile. we're going to need to BE REALLY CAREFUL and
watch EPOL like a hawk. A very cheeky hawk.
0.10 - HDV - high dividend yield
0.10 - IAU - gold - hedge
0.10 - IXC - big oil - i feel like you should always be long oil.

i think it could be smart to have our push for this very short term
(potentially just a week) be small cap hong kong and shorting israel.
I don't necessarily see any big impetuses slash sources of price
changes for hong kong, unless there is a rate change that i'm not
aware about. regardless, it has been on a tear since the etf came to
market in the start of the year and i think we could ride that for a
bit. it basically mimics china's growth, minus the hype about being
China. In short, I think it's a little secret.

I think shorting Israel has obvious reasons - bombs be flying, stuff
be happening. I think businesses will obviously be fearful, so I'm
imagining we could potentially see a dip in the market that we saw
like in January 2009. A (distant) possibility, but a possibility,
nonetheless. And, I think the possibility is enough to cause there to
be significant downside pricing pressure.

the issue that i see is that IXC and EIS are going to be positively
correlated, i think.
we don't really have anything as our major negatively correlated
asset. let's play it by ear? if not, should we include icln, which was
our major negatively correlated asset last time?

These are all pretty back of the envelope estimations. Feel free to
disagree.

[Nayab Khan]

Also. Let's keep 5% in cash just to be on the safe side. So, the
weights I gave above should be out of $950,000.

[Trent Ball]

I agree with the majority of your weights Nayab. But i think since our EIS play is pretty risky we should consider bumping it down to .15 and increasing our weight in IYW to .2. Considering the average daily returns of IYW are more positive than the daily returns for EIS are negative, and the variance for IYW is .00003 less than EIS' variance.

Let me know what you think. Also when i place the short sell order for EIS i should use "Good till cancelled" for the term right? and do i need to set a "limit" or "stop" price type for the trade on EIS?

Goodluck Studying Guys
Trent
________________________________________
From: sanguine...@googlegroups.com [sanguine...@googlegroups.com] on behalf of Nayab Khan [nhkh...@gmail.com]
Sent: Sunday, March 11, 2012 11:01 PM
To: Sanguine Strategy
Subject: Re: expected returns of possible investments

[Trent Ball]

One more quick question. Does anyone think we should get a pulse on the market and try to make trades after an hour or two tomorrow or should i go ahead and place the trades tonight?

________________________________________
From: sanguine...@googlegroups.com [sanguine...@googlegroups.com] on behalf of Trent Ball [tsb...@live.unc.edu]
Sent: Monday, March 12, 2012 12:45 AM
To: sanguine...@googlegroups.com
Subject: RE: expected returns of possible investments

[Blake Falk]

I agree with Trent on pushing the allocaitno of EIS down to .15. It is
a very risky (though exciting) investment, and just like Poland, we
will have to watch it like a hawk. Maybe split the 5% taken from EIS
to WOOD and IYW, becuase I see possibility for growth in each. I
believe that as the housing market slowly regains some steam, that
wood will continue to see a push higher, at least in the short term
with any indication of life in the housing market. Just some thoughts.

Best,

Blake

[Nayab Khan]

Sounds good to me. Good til cancelled for EIS, Trent. I'm not sure
about what exactly you want to do with limit order vs. stop order.

limit order - http://www.investopedia.com/terms/l/limitorder.asp
stop order - http://www.sec.gov/answers/stopord.htm
differences between them - http://www.investopedia.com/ask/answers/04/022704.asp#axzz1ouVQrusf

both seem to do roughly the same thing. maybe do a stop order, since
limit orders charge extra sometimes? your call.

[Nayab Khan]

Hey Trent - Sorry, I just saw your question regarding getting a pulse
or placing the order at night. I'm sorry I didn't see that earlier - I
just checked marketwatch and see that the orders haven't been placed,
which is great because I was going to say get a pulse. Seems to me
that the market isn't moving much right now -- the DJIA is up only 13
bucks today and there aren't any major announcements today. I'd say it
seems to me like a good time to place some orders, especially since
tomorrow has a couple of big reports (store sales, business
inventories etc).

On Mar 12, 7:50 am, Nayab Khan <nhkha...@gmail.com> wrote:
> Sounds good to me. Good til cancelled for EIS, Trent. I'm not sure
> about what exactly you want to do with limit order vs. stop order.
>
> limit order -http://www.investopedia.com/terms/l/limitorder.asp
> stop order -http://www.sec.gov/answers/stopord.htm

> differences between them -http://www.investopedia.com/ask/answers/04/022704.asp#axzz1ouVQrusf

[Trent Ball]

Hey im actually almost done doing them right now, my computer is about to die, but ill finish making them after my class. We have a problem with EWHS, it seems that the game rules dont allow us to purchase as much of it as we want. Can someone else try to place a purhcase of EWHS for around $190000.
Ok gotta go my computers on its last legs thanks

Trent
________________________________________
From: sanguine...@googlegroups.com [sanguine...@googlegroups.com] on behalf of Nayab Khan [nhkh...@gmail.com]

Sent: Monday, March 12, 2012 10:15 AM

To: Sanguine Strategy
Subject: Re: expected returns of possible investments

Hey Trent - Sorry, I just saw your question regarding getting a pulse

[Trent Ball]

Houston we have a problem. There was a volume limit restriction on
the number of shares we could purchase of EWHS. The limit was 1088
shares so i bought 1088 shares. Which means that we have an extra
$160000 dollars that would have gone to EWHS. So please shoot me
some ideas about how we should invest this money. Should we just
add more weight to another asset or should we pick another asset to
add to our portfolio.

~Trent

[Trent Ball]

Hey all,

I have all of the trades placed with the appropriate weights, I had to place a series of trades to get all 6528 of our EWHS shares since the limit per order was 1088, this ended up working in our favor though because the price of EWHS dropped after the first purchase of 1088 shares, and the last five 1088 share trades were made at $.35 less per share. So for the last five EWHS trades we saved $370.85 per trade; the $370.85 factors in the $9.95 per trade charge.
Anyways i just wanted to let y'all know the portfolio is set up, so let me know if you notice an errors in my weights or trades.
Also i would appreciate it if each team could email me, preferably tomorrow or the next day, trade rationales for the assets we invested in this week.

Good luck studying
~Trent
________________________________________
From: sanguine...@googlegroups.com [sanguine...@googlegroups.com] on behalf of Trent Ball [tsb...@email.unc.edu]
Sent: Monday, March 12, 2012 11:27 AM

To: Sanguine Strategy
Subject: Re: expected returns of possible investments

Houston we have a problem. There was a volume limit restriction on