@McGill Engineering Investment Group

2013-03-15 Volume 1, Issue 7

Inside this issue

Latest Updates ............... 1 Economy ........................ 2 Financials ...................... 3 Financials ....................... 4

Newsletter
Latest Updates
Dear Members, We would like to announce the 3rd edition of our Dream Team Stock Simulation starting this Friday. Like the 2nd edition US and Canadian stocks will both be traded. Please click on this link to enter the competition : http://www.howthemarketworks.com/stock-market-game/join-acontest.php?cid=34100 The password is EIG123.

Technology ..................... 5 Technology ..................... 6 Disclaimer ...................... 7 Upcoming Events

Dream Team Stock Simulation

Good Luck!

We would also like to extend a special thanks to our sponsor BMO Capital Markets for supporting the group!

Economy
Interesting Readings

Market Analysis
Economy
Canada plays the wallflower as global stock markets party [The Globe and Mail]

Obama: Political Gap May Be 'Just Too Wide' for Deal [CNBC]

Germany Defies Calls for Stimulus [CNBC]

As the U.S.-based Dow Jones industrial average surges to consecutive record highs, and European markets hover at their highest points in five years, the Toronto market is feeling the effects of softening global demand for commodities The Canadian equity benchmark has become a serial laggard

What exactly is Obamacare and what did it change? [Reddit]

U.S. Fed balance sheet grows to record large size [Reuters]

The Fed's balance sheet stood at $3.147 trillion on March 13, compared with $3.091 trillion on March 6. The Fed's holdings of Treasuries totaled $1.770 trillion as of Wednesday versus $1.762 trillion the previous week. The Fed's ownership of mortgage bonds totaled $1.061 trillion on Wednesday, compared with $1.016 trillion the previous week. The Fed's holdings of debt was $73.59 billion, unchanged on the week. The Fed's overnight direct loans to credit-worthy banks averaged $6 million a day compared with an average of $21 million per day the prior week.

US Consumers Power Ahead, Despite Headwinds [CNBC]

The February increase in retail sales of 1.1% was nearly double what many economists expected Now they see economic growth at a better-than-expected pace in the first quarter Retail sales rose the most in five months even with higher taxes and rising gasoline prices.

Financials
References

Financials
Berkshire Profit Advances 49% on Buffetts Derivatives

[1] http://www.bloomberg.com/ news/2013-03-01/berkshire-profitadvances-49-on-buffett-sderivatives.html [2] http://www.bloomberg.com/ news/2013-03-01/osborne-said-torecover-rbs-bailout-at-19-belowrescue-cost.html

Berkshire Hathaway Inc. said fourth quarter profit rose 49 percent on gains tied to derivatives wagers made by the Chairman CEO Warren Buffet. Net income rose to $4.55 billion, or $2,757 a share, from $3.05 billion, or $1,846, a year earlier. Gains on derivatives surged to $1.4 billion from $163 million. Buffett, 82, uses index put options to speculate on long- term gains in stockmarket indexes in the U.S., Europe and Japan. Those bets added $2 billion to profit in the fourth quarter. Berkshire Class A shares gained 29 percent in the last year as Buffett struck deals to buy back stock and take ketchup maker HJ Heinz Co. private. That compares with the S & Ps 500 Indexs 10 percent advance [1].

Osborne Said to Recover RBS Bailout

The U.K. would recover the cost of rescuing Royal Bank of Scotland Group at a share price 19 percent below what the government paid to bail out the lender in 2008. The government would break even on its investment at 407 pence a share compared with the average 502 pence paid during its rescue. Thats because the price takes into account fees paid by RBS to the Treasury for the bailout and other programs during the crisis. Chancellor of the Exchequer George Osborne could potentially use the proceeds of a sale to fund tax cuts or more spending before a general election in two years that polls say his Conservative Party may lose. Prime Minister David Cameron has kept open the option of giving away RBS shares to the public. The bank said yesterday its net loss tripled to 5.97 billion

pounds ($9 billion) after it set aside an additional 1.1 billion pounds to compen-

Financials
Financials
References

Goldman Has Fewest Trading-Day Losses Since at Least 2004

[3] http://www.bloomberg.com/ news/2013-03-01/goldman-sachstraders-lost-money-16-days-in-2012down-from-2011.html

Goldman Sachs recorded losses from that business on 16 days in 2012, the fewest since the bank started reporting the figure in 2004. The days of losses, detailed in a regulatory filing from the New York-based company today, were down from 54 in 2011 and below the previous low of 19 days in 2009. Traders made more than $100 million on 41 days, down from 54 days a year earlier and the least since 2005. Revenue from sales and trading grew by 5 percent to $18.1 billion in 2012 even as value-at-risk, a measure of how much firms can lose from trades in a single day, was the lowest since 2005. Goldman Sachss net income rose 68 percent last year to $7.5 billion as debt underwriting rose and the firm marked up the value of its own investments [3].

Technology
Technology
Quick links:

Groupon Shares Plummet after Q4 Report

Groupon (GRPN) announced its quarterly earnings this week and saw a 20 percent drop in share price. The company reported a quarterly revenue of $638.8 million with an operating loss of $12.9 million . It also reported a loss per share of 12 cents. This fell short of what analysts had predicted. The company decided to fire CEO Andrew Mason which led to a 12% increase in stock price.

http://techcrunch.com/2013/02/27/ groupon-q4-earnings-2/

http://www.reuters.com/ article/2013/03/14/us-blackberryshares-idUSBRE92C15Z20130314

Spike in Blackberry Stock After Huge Order for New Devices

Blackberry shares rose on Wednesday after the company claimed that an order for 1 million Blackberry 10 smartphones had been placed with shipment to begin right away. It is considered the largest single order in history and is helping to raise notoriety for a company that is attempting to regain popularity. Blackberry shares rose by 8.2 percent on the NADSAQ closing at $16.07

Technology
Technology
Quick links:

Kodak Sees Even Bigger Q4 Losses

Kodaks fourth quarter losses more than tripled from $117 to $402million . Net sales fell 24 percent to 1.12 billion. Nonetheless Kodak expects to emerge from bankruptcy mid 2013. The company stated its plans to file Chapter 11 reorganization in April.

http://www.reuters.com/ article/2013/03/11/us-eastmankodak -results-idUSBRE92A12220130311

McGill EIG
The McGill Engineering investment Group is a new engineering studentrun club that intends to educate engineering and non engineering students about the capital markets and the finance world as a whole. The club also aims to bridge the gap between theory and practice by organizing various events with people from the industry. In addition, EIG is in the process of building an investment portfolio that will be entirely managed by members of the group. For more info on our future events and activities, like our Facebook page and follow us on Twitter at @EIGNews.

Disclaimer
The information contained in any newsletter does not constitute an offer to sell securities or the solicitation of an offer to buy, or recommendation for investment in, any securities within Canada or any other jurisdiction. The information in any newsletter is not intended as financial advice. Moreover, none of the newsletter is intended as a prospectus within the meaning of the applicable laws of any jurisdiction and none of the newsletter is directed to any person in any country in which the distribution of such research report is unlawful. Any newsletter provides general information only. The information and opinions in each newsletter constitute a judgement as at the date indicated and are subject to change without notice. The information may therefore not be accurate or current. The information and opinions contained in newsletters have been compiled or arrived at from sources believed to be reliable in good faith, but no representation or warranty, express or implied, is made by the @McGill Engineering Investment Group as to their accuracy, completeness or correctness and the @McGill Engineering Investment Group does also not warrant that the information is up to date. Moreover, you should be aware of the fact that investments in undertakings, securities or other financial instruments involve risks. Past results do not guarantee future performance. Please feel free to contact us at vp.comm@mcgilleig.ca for any feedbacks or suggestions regarding our newsletter. In addition, if you would like to opt out from receiving future newsletters, please contact us at the aforementioned email address.

McGill EIG
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