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2011 Global Champions Politecnico di Milano Milan, Italy

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What is the CFA Institute Research Challenge? Worldwide intercollegiate competition between teams of students Organized by local CFA societies Analysis of a publicly traded company Interview company management Mentoring by a CFA charterholder Research report writing Presentation of research

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2011 Research Challenge Network 2500 Students 546 Universities 1200 Industry Volunteers 102 Local CFA Societies

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2012 Tournament Diagram 91 LOCAL LEVEL CHALLENGES Asia-Pacific Regional 19 Teams EMEA Regional 25 Teams Americas Regional 47 Teams New York Regional 20 Teams Global Finals

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2011 Tournament Results

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Benefits for Students Learn best practices in research and report writing Real-life learning experience as a Sell-Side Equity Analyst Gain access and exposure to leading industry professionals Professional report and experience can be featured on resume/CV and on job interviews Experience presenting to top financial professionals Individual and team prizes Opportunity for travel (all expenses paid) Potential for media exposure Join a network of over 5000 students & 2000 volunteers worldwide

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Participating Teams UniversityFaculty AdvisorMentor University of Central MissouriDr. Arthur YoungJustin Brown Kansas State UniversityDr. Scott HendrixGary Cloud Missouri State UniversityDr. Jenny ZhangPeter Greig Pittsburg State UniversityDr. Kevin BrackerJeff Hoernemann University of KansasDieter SchraderMatt Norris University of Missouri-Kansas CityDr. John ClarkMichael Fogarty

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Timeline TodayKick-Off Next 3 WeeksPreliminary Research Following 2 WeeksQuestion Development November 7, 2011Company Presentation January 31, 20121 st Draft Due to Mentor February 9, 2012Final Written Report Due InterimReport Grading February 25, 2012Local Final Presentations Week April 9 or 16Regional Final Week April 9 or 16Global Final

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Rules Overview Teams of 3-5 students Only 1 team per University Enrolled in school at time of kick off meeting Original work of students No contact with company outside of organized events No purchased or professional research reports may be used Mentors and faculty may NOT contact the company Mentors and faculty may NOT provide inside information or company reports Students, Mentors, and Faculty all agree to the CFA Institute Code of Ethics and Standards of Professional Conduct

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Advisor and Mentor Involvement Faculty Advisor Insight and guidance on research methods and tools as taught in academia 10 hours of productive time maximum Access to faculty for other projects unrelated to the Research Challenge is permitted All work must be the original work of the students Industry Mentor Insight and guidance on industry practice 6 hours of productive time maximum prior to Written Report Face to face or virtual Company management question development Review first draft of research report Presentation development assistance

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Online Ethics Case Study Ethical Standards for Investment Professionals: An Interactive Case-Based Course

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Sample Report

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Report Scoring Section Investment Summary Valuation Business Description Other Headings Industry Overview & Competitive Positioning Financial Analysis Investment Risks Total Maximum 20 5 15 20 15 100

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Presentation Scoring Section Argument Questions Financial, Valuation & other Analysis Team Involvement Poise Materials Total Maximum 25 20 15 10 5 100

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Subject Company Garmin - Creates navigation and communication devices for the automotive, aviation, marine, fitness, outdoor recreation, and wireless applications industries IR Packet, Company Presentation, Follow-Up Conference Call for Questions MANY MANY THANKS to Garmin Management!

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Interacting with Garmin Designated Officers ONLY Organized Meetings ONLY Industry Mentor or Faculty Advisor must be present for ALL student- Garmin interactions Students may contact company suppliers, customers, vendors, etc.

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Comments from 2011 Challenge Teams not meeting deadlines subject to elimination Must not change any formatting on the Written Report (including size, font and colors) Grammar, sentence structure, word use & argument logic are important Grammar, sentence structure word use & argument logic Look at Written Report, Presentation & Video of 2011 Winner Level of competition is high Univ of Wisconsin research example Sensitivity analysis and slides to support (hyperlinked slides) Support for your thesis Dont simply trend forecasts revenue & expense drivers Identify risks to investment thesis Presentation skills must be polished and practiced Clarify questions being asked if unclear

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Additional Resources Available www.researchchallenge.org/Pages/educationalresources.aspx

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Additional Resources Available www.researchchallenge.org/Pages/educationalresources.aspx

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Additional Resources Available www.researchchallenge.org/Pages/educationalresources.aspx Multimedia Resources

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Questions

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CFA Institute Research Challenge Team Brian Stype Manager Amanda Quinn Program Coordinator Amy Strunk Administrator www.researchchallenge.org email: researchchallenge@cfainstitute.org

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James A Reed II, JD, CFA Lead Portfolio Manager & Senior Vice President Scout Investments Over 19 years of investment experience Three years as a private attorney Has been a security analyst, portfolio manager and director of research Bachelors Dartmouth College Law Degree Washington & Lee University

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Logic & Sentence Structure Logic must be sound: Statement used to support a hold rating: Although there are many concerns with Great Plains, the company still maintains strong prospects for the future. Use proper sentence structure: Overall, we think market has overstated regulatory and environmental risks and undervalued GSPs stock price. We believe it is irrational to trade GXPs stock below its book value, which is significantly lower than its historical book value. Go Back

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Word Use & Grammar Proper use of words is important: In the coming years, federal litigation will set out to enforce the reduction of carbon emissions among fossil fuel burning facilities. Poor grammar distracts the reader: Thus, the Gordon growth model gave us a negative valuation, which is practically not feasible. Go Back