Stocktrak Project – Rules and Schedule

1. All descriptions below must be entered into the Google Sheet for the class. The Google Sheets link will be
posted on eClass.
2. Be Warned!: No copycat investing. You cannot copy other team’s ideas. Once a team has described a stock,
option, bond, or other trading strategy related to a specific company or country in Google Sheets no other team
can use that target – it is off limits. Therefore, first-to-post to Google Sheets locks in a strategy. Act early!
3. Do not procrastinate until the due date!
4. These popular fad stocks are black-listed. You cannot choose the following popular stocks or options related to
them, known as the FAANG stocks: Facebook, Amazon, Apple, Netflix, Alphabet (Google).
5. The most important part of the process is your thesis. Have an explanation about why you are taking your
chosen positions.

Theme Requirement
Explanatory Note: This task requires using leverage. Before your account will use
Getting Started, borrowed money, you must use up all the cash in your portfolio. Since Stock Trak sets a
Fundamentals, concentration limit of (I believe) 25% per position you will have to make multiple
Margin, Shorting purchases to use up all cash available.
Get started: Buy and name at least 5 stocks of your choosing
Go long an undervalued stock. Describe the PBR, EV/EBIT, EV/EBITDA, EV/Sales, beta of
your stock. Explain your thesis: why you think it is cheap and what will cause it to rise.
Short a stock you consider overvalued. Describe the PBR, EV/EBIT, EV/EBITDA, EV/Sales,
beta of your stock. Explain your thesis: why you think it is overvalued and what will cause
it to fall.
Make stock purchases larger than all your account’s available cash to force you to use
some margin. Describe the amount of margin used. Explain why you chose the stock that
pushed your portfolio into a margined status.
Choose a closed end fund. Describe its current price and discount/premium, the nature
Closed end funds of the fund’s investment approach, the discount at which the fund will redeem shares
(likely in prospectus document – you will need to research the prospectus online for
relevant information. source: SEDAR or EDGAR).

Purchase an index security. You cannot choose the same security as any other team.
Index investing Describe why you think that index is a good investment. Also describe the shortcomings
of your selected security in reflecting the spirit of passive investing. Be sure the
descriptions reflect your specific security and not vague generalities.
Basic Options: Put, Put Option: purchase a put on a stock for which you think it is appropriate. Describe the
Call current stock price, strike, time to maturity, cost of option, breakeven point and your
thesis of why you think this is a smart investment.
Call Option: purchase a call on a stock and do the same as for the put described above
(but does not need to be the same stock)
Option Bull Call Spread: Purchase a spread on a stock you think deserves it. Describe the trade
Combinations: and thesis.
Straddle, Spread Straddle: Purchase a straddle, follow instructions as per the bull call spread.
Bonds Purchase a corporate bond. You cannot choose the same corporation as any other team.
Describe the bond’s term, yield-to-maturity, coupon, price. Why do you think this is a
good investment?
Momentum/technical Purchase a stock based on technical indicators. Describe the current price, 200 day MA,
trading 50 day MA, 14 day RSI, thesis
Final Deliverable Summarize your performance to-date: from first day of class: holding period return,
annualized return, Sharpe ratio
Summarize and reflect on all the theses of the positions you submitted through the term
What was your biggest winner that was due to luck not good analysis?
What was your biggest loser where your analysis was bad/flawed?
What investment style would you focus on going forward?