Looking into A&F Investments

A&F Investments is an investment committee for students of Tilburg University interested in investing or the financial world in general. Most of our members study finance, economics or business administration. The mission of the committee is to learn from each other about investing. This knowledge is broadened by a number of interesting guest lectures. Throughout the year we invest jointly a sum consisting out of the contributions from our members. By doing so, the members will get experience in investing and are challenged to think about corporate values.

The investment committee currently consist out of twenty-three members which are divided in to groups of three or four students. The groups will focus on specific industries to get a deeper understanding of the industry. Every six weeks, a team has the opportunity to pitch an investment idea. This can either be a buying pitch for a certain stock, a selling pitch or an alternative investment suggestion. Investment opportunities will be sealed by a voting and there needs to be a two third majority to accept the proposal. Moreover, we have a Risk Management and Macro-Economic team that challenge investment ideas and pitches in order to stimulate discussion. When the team decides to acquire a specific asset, one member of the team will have to keep track of developments of that specific stock. These individual stock watchers are then the one responsible for providing the rest of the team with important information, either in the meetings or through our Facebook page.

Last quarter we have had several interesting meetings and our team was reinforced with some new members. This means new perspectives and new opportunities for our portfolio. Unfortunately the overall stock market has been in a turbulent time and was mainly driven by terrible macro-economic performance in China. Moreover the uncertainty about the United States interest rates has had a negative impact on our portfolio.

Regardless of this, we have seen many interesting pitches. Our Macro-Economic team has updated us every meeting about the economic development in the world, with respect to our portfolio. Currencies and commodities have been discussed a lot in particular. Declines in gold, copper and oil have forced us to take several actions. For instance at the lowest point of the year of the oil price, we have picked up some extra stocks of a firm exposed in oil. In general, the information provided by the Macro-Economic team has been a great help for the other teams.

The investment opportunities of the teams were very diversified. One team made from their pitch a small lecture about trading in options, including some interesting interpretations of investing strategies. Another team thought it would be reasonable to diversify our portfolio with a biopharmaceutical stock. They have supported their pitch with some crucial information about patent expirations of their competitors. Innovation and sustainable energy were also hot topics during the meetings. Solar-energy, technological development in the car-industry and innovation in The Netherlands have been discussed. As an important support for these opportunities, DCF methods and multiples were used to value the considered stocks. One interesting example is Tesla Motors, which besides their cars is making a major move into building battery systems. The rare element graphite will take a key role in the production of these batteries. Therefore graphite was investigated by one of our teams and even a small sample of real graphite was sent to us all the way from the Canada-based Great Lakes Graphite company.

To sum up, our members have experienced in various ways what it is like to invest in real stocks. Also the next quarter promises to be exciting and interesting for A&F Investments because of the current uncertainty in the financial markets.