Marvin Qi

Mr. Pelkey
AP Economics
13 December 2013
Econ Stock Project
The fourth quarter of the fiscal year saw many notable events
that determined the trends that the stocks followed. We first present
an analysis of stocks, focusing specifically on whether a stock gained
or lost value, and then follow with an explanation of the results based
on the major events that happened during the quarter.
For the portfolio determined by dart throwing, no particularly
obvious pattern and trends show themselves. iShares, Inc. (IBDA) and
John Hancock Pref. Income Fund II (HPF) are both ETFs, or exchangetraded funds; however, they performed very differently over the course
of 3 months IBDA increased slightly in value while HPF plummeted
slightly. Similarly, Altera (ALTR), KT Corporation (KT), and First Solar
(FSLR) are all high-tech corporations; however, their stock prices also
varied greatly. ALTR and KT lost a significant value of their stocks (>
15%), while FSLR gained an even larger percentage (~30%). Overall,
the portfolio lost $542.00, or 1.35% of the portfolios initial value.
The handpicked portfolio performed much better than its dartthrown counterpart. Though the corporations were diverse in type, the
handpicked portfolio showed the general trend of increasing in value.

Of the five chosen stocks, four (AMZN, ZNGA, DIS, and AMX) increased
in value while only Whole Foods Market (WFM) performed poorly.
However, WFMs drop wasnt particularly large (< 5%) while others,
particularly AMZN, increased by over 20%. Overall, the portfolio did
well, but not exceptionally so it gained by $3925.30, or ~9%.
While significant, events such as the U.S. Government shutdown
and the Phillipine Typhoon seems to have very little, if any, correlation
with the performance of the stock portfolios. Of all the non-beta events
that occurred, the most influential seemed to be the confirmation of
Janet Yellen as Federal Reserve Chairman and the poor Black Friday
sales. The confirmation of Janet Yellen as Chairman of the Federal
Reserve increased stock prices as her policies favored businesses. Poor
Black Friday performance, negatively affected stock performance as
sales failed to meet investor expectations.
Of all the notable events that occurred in the last quarter of the
fiscal year, however, the most reliable predictor of a stocks
performance is their 4th quarter earnings report. When companies
reported earnings that exceeded investor expectations, stock prices
jumped; when they reported earnings that failed to meet investor
expectations, stock prices plummeted. The 4th quarter earnings report
was the single largest determinant of the performance, being much
more correlated with performance than any other event. The
randomness of the stocks responses to other major events such as the

U.S. Government shutdown illustrates the validity of the Random Walk

Hypothesis, which shows that stock performance cannot be predicted
based on external factors, with the exception of the earnings report.

Dart Portfolio
Stock Name

Initial Price

Final
Price

#
Shares

Profit/los
s
($1,314.
200
00)

Altera (ALTR)

$37.98

31.41

iShares, Inc. (IBDA)

$100.65

101.00

200

KT Corporation (KT)

$17.17

14.38

200

First Solar (FSLR)

$39.83

56.49

100

John Hancock Pref.

Income Fund II (HPF)

$19.37

17.34

200
Net
Profit:

$70.00
($558.00
)
$1,666.0
0
($406.00
)
($542.00
)

Handpicked Portfolio
Stock Name
Amazon (AMZN)

Initial Price
$312.06

Final
Price

#
Shares

Profit/los
s
$3,459.5
50
0

381.25

Zynga (ZNGA)

$3.47

4.14

100

$67.00

Whole Foods Market

(WFM)

$58.54

55.9

100

($264.00
)

Disney (DIS)

$65.72

69.63

80

$312.80

America Movil SAB (AMX)

$20.51

22.26

200

$350.00

Net
Profit:

$3,925.3
0

Darts Portfolio

1. Altera (ALTR)
November 30, 2013 (non-beta risk): Black Fridays sales, which
accounts for as much as 11% of the nations GDP, do not perform as
well as investors had expected. General stock prices fall slightly.
December 1, 2013 (beta risk): ALTR files the SEC 8K form, signaling
the presence important and significant event effecting shareholders.
Stock prices tumble slightly as investors fear changes like
bankruptcy or CEO replacement.

2. iShares, Inc. (IBDA)

November 18, 2013 (beta risk): IBDAs earnings report for the 3rd
quarter showed relatively weak results, resulting in a sharp
decrease in its stock price as investors expectations failed to be
met.
November 29, 2013 (non-beta risk): As sales during Black Friday are
lower than expected, stock prices for even ETFs decrease slightly.

3. KT Corporation (KT)
November 19, 2013 (non-beta risk): KT Corporation suffers further
losses as the Phillipines struggles to recover from the damage
incurred in the typhoon because it loses a large market. Stocks
decrease in value.
November 29, 2013 (non-beta risk): KT Corporations stock value
increases slightly as China announces its easing of the one-child
policy due to expected increased revenue in the future.

4. First Solar (FSLR)

October 31, 2013 (beta risk): FSLR reveals its earnings report for the
3rd quarter, exceeding investor expectations and causing its stock
price to jump substantially.

November 29, 2013 (non-beta risk): China eases its one-child

policy. Future expectations of its rising energy needs slightly
increases FSLRs stock price.

5. John Hancodk Pref. Income Fund II (HPF)

November 18, 2013 (non-beta risk): Janet Yellen, the incoming
chairman of the Federal Reserve, announces her support of
quantitative easing, which aids businesses.
November 29, 2013 (non-beta risk): The Black Friday output failed
to meet investor expectations, causing the stock price to begin to
plummet as consumer confidence falls.

Hand-Picked Portfolio

1. Amazon (AMZN)
November 29, 2013 (non-beta risk): The online shopping spree that
followed Black Friday performed well enough to offset the failure to
meet investor expectations. AMZN prices remain steady while
others plummet.
December 10, 2013 (beta risk): AMZN announces potential future
use of drones to deliver products. Hype and future expectations
drive the stock price upward.

2. Zynga (ZNGA)
November 30, 2013 (Non-beta risk): As Black Friday shopping goes
worse than expected, spending on mobile-app games decreases
somewhat.
December 6, 2013 (non-beta risk): Bitcoin reaches $1000 in value,
increasing hype for digital currencies. Zynga benefits from this as
more people begin purchasing games.

3. Whole Foods Market (WFM)

November 19, 2013 (non-beta risk): Recovery from the Phillipine
typhoon remains slow. Demand for food and supplies slightly
increases WFMs stock price.
November 29, 2013 (Non beta risk): Chinas one-child policy change
helps WFMs future expectations as it expects to sell more food in
the future. Stock prices increase as a result.

4. Disney (DIS)
November 29, 2013 (beta risk): Consumer confidence decreases
due to Black Friday sales diminish, bringing DIS share prices down
with it.
November 30, 2013 (non-beta risk): Chinas easing of the one-child
policy causes Disneys future expected profits to rise. Stock prices
increase slightly.

5. America Movil SAB (AMX)

November 17, 2013 (beta risk): Mobli, a popular mobile application
similar to Instagram performs well. Stock prices increase as a result.
December 1, 2013 (non-beta risk): The market suffers from Black
Fridays relatively poor performance. Stock prices of AMX fall due to
decreased consumer confidence.