Virtual

Invest
ment
Fin 254
Report on
Portfolio
Investment
Prepared For:
Sayba Kamal
Athoi (SbK)
Lecturer
School
of By:
Prepared
Prepared By:
Business
Ishtiaque Rajib
Ishtiaque Rajib
North South
103 0088
University
103 0088
530
530
Anila Hoque
Anila Hoque
112 0042
112 0042
530
530

L etter of Transmittal:
April, 2012
Sayba Kamal Athoy (Sbk)
Lecturer,
School of Business,
North South University

Dear Mam,
In this report of Virtual Investment, we have tried to implement our learning from this course.
We would like to thank you for offering the opportunity to work on this topic. Despite many
limitations, we have tried our best to make this report accurate and reliable.
If you have any further enquiry concerning any additional information, we would be very
pleased to clarify that. Thank you.

Sincerely yours,

1.Ishtiaque Rajib
2.Anila Hoque

Acknowledgement:
One of the most pleasant parts of submitting a report is the opportunity to thank those
who have contributed to it. Unfortunately, the list of expression of thanks- no matter how
extensive is always incomplete and inadequate. These acknowledgements are no exception.

Our first thank goes to the almighty Allah for bestowing us the patience and courage to finish
this huge task within its deadline.

Thanks must go to the team member, whose unflagging patience and astounding capacity for
creative work, and long hours made the project both possible and successful under the pressure
of knocking deadline.

At last, we sincerely acknowledge our debt to Mohammad Sayba Kamal Athoy (Sbk), our
honorable faculty, for his valuable counseling towards the improvement of the project. Without
his encouragement, this would have been impossible.

Table of Content:
Contents
Number

Page

Introduction

05

My Chosen Companies

06

Toyota Motor Corporation

06

Amazon.com

06

Procter & Gamble

07

Visa Inc.

07

The Coca-Cola Company

08

Novartis International

08

Intel Corporation

09

Reasons Behind Choosing the Companies

10

Comparison with competitors

10

Performance of the portfolio

14

Incentives

17

 Conclusion

18

References

19

Introduction:
In Fin 254, we have learnt about portfolio risk and return. To make the lesson more
practical and applicable weve assigned a new kind of project, which is Virtual Investment. In
here for the first time we have created and maintained a portfolio in Yahoo Finance and traded in
NASDAQ and S&P 500 just like actual investors with a restriction of $50,000 investment.
Trading in Yahoo Finance has been a great experience. It also gave us the idea about the global
stock market and how things are done there. The main objective of this project was to guide us
for the real world of finance and letting us to know the pros and cons about investment.
As our respected Faculty has instructed, at first we have to open an account at
finance.yahoo.com. There our limit was $50,000 to invest in the stock. Then, week after week,
this portfolio was maintained using insight and information from the trade research activity in the
Yahoo finance. And then invest in maximum ten companies as we like and we were also allowed
to change our portfolio as we like. At the end of the deadline we had to submit a formal report on
our portfolio and show our performance as well.

My Chosen Companies:
Toyota Motor Corporation
Toyota

Motor

Corporation abbreviated TMC,

is

a multinational automaker

headquartered in Toyota, Aichi, Japan. In 2010, Toyota employed 317,734 people

worldwide, and was the world's largest automobile manufacturer in 2010 by production.
The company was founded in 1937 as a spinoff from the founders father's company Toyota
Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota
Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the
Toyota

AA.

Toyota

Motor

Corporation

group

companies

are

Toyota

(including

the Scion brand), Lexus, Daihatsu and Hino Motors, along with several "non-automotive"
companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world.
Toyota is publicly traded on the Tokyo, Osaka, Nagoya, Fukuoka, and Sapporo exchanges. In
addition, Toyota is foreign-listed on the New York Stock Exchange under NYSE: TM and on
the London Stock Exchange under LSE: TYT. Toyota has been publicly traded in Japan since
1949 and internationally in NYSE since 29th September 1999. It has posted a profit of 408.18
billion or US$5.07 billion in the financial year 2011.

Amazon.com

Amazon.com Inc. is an American multinational electronic commerce company with

headquarters in Seattle, Washington, United States. It is the world's largest online retailer.
Amazon has separate websites for many of the leading countries. It is also expected to launch its
websites in Poland, Netherlands and Sweden. It also provides international shipping to certain
countries for some of its products.
Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs,
MP3 downloads, software, video games, electronics, apparel, furniture, food, toys, and jewelry.
Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ
stock exchange symbol AMZN, at a price of US$18.00 per share. It has recorded revenue of US$
48.07 billion in 2011.

Procter & Gamble (P&G)

Procter

&

Gamble (P&G)

is

a Fortune

500

American

multinational

corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range

of consumer goods mainly of personal care. The company likes to call itself a big healthcare
company.
In 2011, P&G recorded $82.6 billion dollars in sales. Fortune magazine ranked P&G at fifth
place of the "World's Most Admired Companies" list, which was up from sixth place in
2010.Procter & Gamble is the only Fortune 500 Company to issue C Share common stock. It is
listed in NYSE with the exchange symbol PG.

Visa Inc
Visa Inc. is an American multinational financial services corporation headquartered
in Financial District in San Francisco, California, United States. It facilitates electronic funds
transfers throughout the world, most commonly through Visa-branded credit card and debit
cards. Visa does not issue cards, extend credit or set rates and fees for consumers; rather, Visa

provides financial institutions with Visa-branded payment products that they then use to offer
credit, debit, prepaid and cash-access programs to their customers. In 2008, according to The
Nilson Report, Visa held a 38.3% market share of the credit card marketplace and 60.7% of the
debit card marketplace in the United States In 2009, Visas global network (known as Visa Net)
processed 62 billion transactions with a total volume of $4.4 trillion.
The company was listed in the NYSE in 19th March 2008 with the ticker V.

Coca-Cola
The Coca-Cola Company is an American multinational beverage corporation and
manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. The
company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John
Stith Pemberton in Columbus, Georgia.[3]The Coca-Cola formula and brand was bought in 1889
by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake CocaCola beverage, Coca-Cola currently offers more than 3,500 brands in over 200 countries or
territories and serves over 1.7 billion servings each day.
The company operates a franchised distribution system dating from 1889 where The Coca-Cola
Company only produces syrup concentrate which is then sold to various bottlers throughout the
world. The Coca-Cola Company is headquartered in Atlanta, Georgia, United States. Its stock is
listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell
1000 Growth Stock Index.
It was listed in NYSE as KO in 26 th of January 1950. The Coca Cola Company has registered
revenue of US$ 35.119.

Novartis International

Novartis International AG is a multinational pharmaceutical company based in Basel,

Switzerland, ranking number two in sales (46.806 billion US$) among the world-wide industry
in 2010.
Novartis manufactures many of the popular drugs known worldwide. Renamed to Novartis
following an acquisition by Ciba-Geigy, it owns Sandoz, a large manufacturer of generic drugs.
The company formerly owned the Gerber Products Company, a major infant and baby products
producer, but sold it to Nestl on 1 September 2007.
The company is traded as NVS in the NYSE and was listed in 11 May of the year 2000. In 2011,
it has posted revenue of US$ 50.624 billion.

Intel Corporation
Intel Corporation is an American multinational semiconductor chip maker corporation
headquartered in Santa Clara, California, United States and the worlds largest and highest
valued semiconductor chip maker, based on revenue.
Intel was founded in Mountain View, California in 1968 by Gordon E. Moore (of "Moore's Law"
fame, a chemist and physicist), Robert Noyce (a physicist and co-inventor of the integrated
circuit), and Arthur Rock (investor and venture capitalist). Moore and Noyce came from
Fairchild Semiconductor and were Intel's first two employees. Rock was not an employee, but he
was an investor and Chairman of the Board. The total initial investment in Intel was $2.5 million
convertible debentures and $10,000 from Rock. Just 2 years later, Intel completed their initial
public offering (IPO), raising $6.8 million ($23.50 per share). Intel's third employee was Andy
Grove, a chemical engineer, who later ran the company through much of the 1980s and the highgrowth 1990s. On July 15, 2008, Intel announced that it had achieved the highest earnings in the
history of the company during Q2 2008.
Intel's market capitalization is now $140.84 billion (Mar. 26, 2012). It publicly trades on
NASDAQ with the symbol INTC. A widely held stock, the following indices include Intel
shares: Dow Jones Industrial Average, S&P 500, NASDAQ-100, Russell 1000 Index, Russell

1000 Growth Index and SOX (PHLX Semiconductor Sector).On July 15, 2008, Intel announced
that it had achieved the highest earnings in the history of the company during Q2 2008.

Reasons Behind Choosing the Companies:

The main indicators which attract us to invest in these companies are those companies
Beta, EPS, P/E ratio and expert investors recommendation. All these are given below in a
combined table.

Company

Beta

EPS

P/E Ratio

Toyota Motor Corporation

0.92

0.75

109.36

Amazon Inc.

0.69

1.37

140.31

Procter & Gamble

0.35

3.40

19.74

Visa Inc.

0.86

5.65

21.59

The Coca-Cola Company

0.42

3.69

20.08

Novartis International

0.47

3.78

14.65

Intel Corporation

0.96

2.39

11.67

Comparison with competitors:

In this section we have compare our chosen companies with their closest competitors.
Comparison between Toyota Motor and Ford Motor:

Comparison between Amazon Inc. and EBay:

Comparison between Procter & Gamble and KMB:

Comparison between Visa Inc. and Master Card:

Comparison between the Coca-Cola Company and Pepsi co.:

Comparison between Novartis International and SNY:

Comparison between Intel Corporation and SNY:

Performance of the portfolio:

Levine Corporation has started its journey from

March, 2012 and faced many ups and

downs with the market. But its successfully achieved its desired returns and promises to keep the same
pace in its future journey. Levine Corporations performance through 23rd March to 16th April is
described below.

Opening Price and current holdings at

March, 2012:

Selling PG and Buying NVS at 1st April, 2012:

Closing Price at 16th April, 2012:

Closing Performance at 16th April, 2012:

Incentives:
According to the above mentioned companies it is very clear and articulates that we tend
to invest in companies which are not homogeneous. We invest in distinct companies in order to
reduce investment risk due to portfolio diversification, economies of scale in transaction cost and

professional management. Of course investing in our portfolio there will be a possibility of

modest risk of investment and reasonable rate of return
The portfolio beta (the Beta () of a stock or portfolio is a number describing the correlation of
its returns with those of the financial market as a whole) is 0.79 and we believe that the
companies have chances of high growth rate potential according to the gain achieved by our
company. Without reservation, we have the ability of providing safety of investments and regular
income.

Conclusion:
It was very enlightening as well as educational to work on such a unique project on
Finance. We would like to thank our course instructor Miss Sayba Kamal Athoi who has given
guidance and such an opportunity to solve each and every little problem of us with enormous
apprehension. We have really enjoyed working on this project because it gave us an actual idea
about how to invest in companies, what significant issues are needed to be considered before
investing in company/companies. Lastly, we would like to thank our group members who were
cooperative in completing our project immaculately and making it an effective one.

References:
o

http://en.wikipedia.org/wiki/Toyota

o http://www.nyse.com/about/listed/tm.html
o http://en.wikipedia.org/wiki/Amazon.com
o http://www.nasdaq.com/symbol/amzn
o http://en.wikipedia.org/wiki/Procter_%26_Gamble
o http://www.nyse.com/about/listed/pg.html
o http://en.wikipedia.org/wiki/Visa_Inc.
o http://www.nyse.com/about/listed/v.html
o http://en.wikipedia.org/wiki/The_Coca-Cola_Company
o http://www.nyse.com/about/listed/ko.html
o http://en.wikipedia.org/wiki/Novartis
o http://www.nyse.com/about/listed/nvs.html
o http://en.wikipedia.org/wiki/Intel#Origins