 Well, good afternoon everybody. It's wonderful to see so many familiar faces and some new faces in the crowd for the spring presentation by the CAFE students of their performance in recent weeks and months. This is something that all of us at the Gebelli School of Business and at the university look forward to all the time. It's just a fun afternoon of hearing from the students and afterward getting together to catch up and talk a little bit about their experience in the CAFE program. And for some of them who are here today, what their plans are moving forward after commencement on May 14th. Before we get underway, I just wanted to say first of all to those of you who are with us today who I haven't already had a chance to thank. Thank you so much for what you've done in terms of contributions to the CAFE, the campaign for the CAFE, which was underway earlier this spring. We were amazingly successful exceeding the goal that we had set by a significant amount. We all together have raised over $60,000, including the money designated specifically for the campaign for the CAFE as well as some additional dollars that have come in from donors who I don't want to leave out, including our good friend Mario Gebelli who is a big supporter of the school that bears his name, Hans Christensen of MJX Asset Management, and Deborah Stokes of JP Morgan. They've been big supporters of the CAFE program and I want to give them a special thank you for everything they've done. And again, thank all of you who have participated in the campaign. I'd also like to thank Valic for their sponsorship of some of today's activities, including the reception that's going to follow the presentation. Are either Greg Highland or Kevin McNair here today? I don't know. They're the representatives from Valic. I guess they didn't get to join us. Oh, no, they're not here. Okay, thank you. I wasn't looking for you, Chris. We'll thank them in absentia. So I don't want to delay any further to get the main event for this afternoon underway. So we'll do that. Dr. Melton, all set? Okay. Hey, here today I'm Kelly Fitzpatrick. And I'm Dave Boyce. And we are the associate directors of the Center for Advanced Financial Education here at Roger Williams University. The student fund managers have worked extremely hard and they are so excited to present their funds to you today. Before we get started, we just all wanted to introduce ourselves and everyone involved with the program. In the back, we have Doc. He's our professor and he's our boss. And next to him or actually up front is Eric Gilmette. He's our managing director. And in the back next to the doc is Zach Gehring, our operations and compliance officer. And the student fund managers to my left are Carla Puccini, Brian Jones, Ryan Butler, Taylor Ross, Engaged Clubette. And to my right are Megan Gehrity, Katie Adams, Michael Coriali, Ryan Lambert, Luke Nigro, and as the conductor, a special thanks to Justin Edelman. So in the CAFE program, we invest in two real dollar equity portfolios combined they're worth about a quarter of a million dollars. The student fund managers are going to talk about our investment process and explain our fund holdings to you all the day. So to introduce our growth fund, we have Megan and Carla. Within the CAFE, everything that we do directly mirrors industry. Therefore, we're ecstatic to be here today to pitch to you our two funds that we are confident you will want to invest in. The 11 people standing before you are privileged enough to have the title of student fund manager. The CAFE program fosters our transition from student to industry professional. Today, we will be walking you step by step through each of our two separate processes in order to ensure complete transparency into not only how we have selected these companies but to touch upon the fact that we are qualified investors ready to preserve your wealth. In the CAFE, we are lucky enough to have two different portfolios. The first being the student investment management fund, also known as the SIF. The second, the Mario Jacobelli Value Fund. With two funds comes differing mindsets. With two differing mindsets comes two completely different target markets. Therefore, each and every one of you will be able to find one of these funds that you want to invest in. So we urge you, please pay attention because you're not going to want to miss this. The first fund that we will pitch to you today is the SIF fund, otherwise known as the Growth Fund. The objective of the Growth Fund is large cap domestic, comprised mainly of large cap companies, but diversifying with mid cap as well. The target market for the SIF fund are investors with a higher risk tolerance. It is also important to note that our time horizon is between six months and one year, as these investors are looking for gains in the short term. Now that we have determined the objective and target market, we are going to illustrate to you what exactly growth means to us. It is extremely important with growth investing to have an active management strategy. After we analyze fundamentals, we put extreme emphasis on both technical and behavioral analysis, as this typically moves the stock's price in the short term. We understand that growth investors are seeking fast-paced price appreciation. Therefore, in order to achieve this, we sometimes need to accept above market valuations, as our primary goal is investing in cyclical companies about to enter their expansionary period. We will now move you along in our process. I would like to invite up Katie, Mike, Ryan and Brian to explain our top-down approach. When allocating into our Growth Fund, we went two miles wide and two feet deep. To explain a little bit about what this means, at the beginning of the semester, we performed a comprehensive macroeconomic analysis on any investable country to determine where the safest place was to put our money. Our analysis led us to believe that investing domestically was the best bet. Now, although we decided to invest domestically, we still have a moderately bearish outlook on the overall market. This aids us in deciding which sectors we would like to overweight and underweight. After we had decided our sector weights and found the best industries for growth, we used fundamental, behavioral, and technical analysis to find the companies that best fit our fund's objective. Above is a chart of the sector rotation of the S&P 500. Now, although this may look slightly confusing, what it does is take historical data to predict where certain sectors may be moving in the months to come. This chart uses the relative strength and momentum of each sector to determine where it is in the life cycle. What we would like to see is a sector moving from the bottom left to the top right, showing that it's going from lagging to leading. For example, the basic materials, industrial, and consumer discretionary sectors are all moving into the leading quadrants. On the other hand, the utility sector is weakening. We have overweighted and underweighted these sectors, respectively. The chart above displays our sector weightings versus those of the S&P 500. On the left-hand side of the chart, you can see one of my personal favorites, the technology sector. We decided to slightly overweight this sector due to innovation coming from companies like Facebook, Apple, and Google that are specializing in the process of their virtual reality and cloud computing softwares. We have decided to stay out of the energy sector this semester, primarily due to the fact that the companies in this space are driven by the price of the commodity. Now, we can perform a fundamental analysis on a stock, but we cannot perform the same fundamental research on the price of oil due to the fact that it is so headline-driven. Like I previously mentioned, we have no allocation in the utility sector. This is because the sector as a whole is very run-up, and the companies within this sector do not meet our key growth metrics for our fund's objective. Speaking of key growth metrics, two of the most important fundamentals we look for in finding an investment in this fund are increases in a company's earnings and operating cash flow. Broadcom is an example where we were willing to pay a slightly higher market valuation given the company is going to grow at a faster rate. This is exemplified in their G-prime at 78%. For those of you unaware with the G-prime metric, it is simply the projected earnings per share growth rate. Now, while all of these numbers are helpful, it is of equal importance that we recognize the trend in which they are moving. On the top right-hand side of the screen, you can see some of the most important increasing trends that we use to decide which companies we like. Some of these trends are an increasing dividend yield and an increasing cash flow margin. On the bottom right-hand side of the screen, you can see some of the most important decreasing trends that we take note to, such as a peg ratio being under one. This is exemplified by Broadcom's peg ratio of 0.32. Now, while these key growth metrics are important, we also use technical and behavioral analysis to decide which companies we would like to invest in. If you walk into the cafe during any given market hours and turn to a growth station, these are the four screens that you'll see. The first screen is a live feed of company news coming out in real time before it hits CNBC. The next screen shows recommendations from some of the top analysts on Wall Street. Now, we're talking firms like JP Morgan and Goldman Sachs. Looking at the middle of the screen, you can see where the recommendation is a buy or sell accompanied by the analyst's 12-month price target, which gives us a better idea of where the stock may be moving within months to come. After looking at fundamental and behavioral analysis, we will use technical analysis to determine if it's the correct time to buy or sell a stock. The indicators that we use are the RSI, Stochastics Oscillator, and the MACD to determine if a stock is overbought or oversold. After we've decided that we want to buy or sell a stock, we will pull up the VWAP for volume-weighted average price. This will show the bid-ass spread and ensure that we are getting in at an optimal price. Now that we've shown you how we allocate our growth fund, we want to give you a snapshot at some of our holdings. Now, regardless of our current holding period yield, we are confident in all these stocks moving forward. I would now like to open up the floor to three of our top holdings. As with any successful portfolio pitch, we'd like to take a minute and first start by talking about one of our biggest winners year to date, and that for us is JB Hunt Transport Services. JB Hunt is in the trucking industry and they're located in the United States, Canada, and Mexico. We like JB Hunt for a number of reasons, the first being that they're very fundamentally strong, especially when compared to the competitors and their industry. Another reason why we like JB Hunt is they're competitively differentiated, and what I mean when I say that is that their business plan is very unique and diverse. JB Hunt did not originally make it into our fund. When Mike, Gage, and I pitched this company at the beginning of the semester, it was turned down by the rest of the student fund managers. Even though the company was fundamentally strong, we had an overall bearish outlook on the market and had no confidence in the transportation industry as a whole. However, as data was released that U.S. jobs, consumer spending, and manufacturing was improving, we saw a shift in the market sentiment and saw this as an opportunity to make a play. The technical analysis above displays JB Hunt's share price in accordance with the Dow industrial average transportation index displayed by the green line. Now, as the industrial sector analyst, I am proud to say that we have returned 14% on this holding. Although this may seem like a large number, we're still confident in JB Hunt due to the fact that they have increasing operating margins as well as their key attention to their logistic aspect of their business. Moving forward, I would like to speak about one of our favorite consumer staples picks. One of the steady and reliable performers that we want to talk to you about is Constellation Brands. Now, I'm sure some of you have never heard the name Constellation Brands before, but I guarantee if you go home and open your refrigerator, you may see some of their brands sitting on your shelves. Constellation Brands is one of the largest and most diversified companies, serving the alcoholic beverage market in the United States and abroad. Fundamentally speaking, they are stronger than their competitor Anheuser-Busch with greater top and bottom line growth. They're able to grow their top and bottom line through mergers and acquisitions. Constellation began their beer acquisition business in 2012. As you can see on this price chart, Constellation has been consistently reaching new all-time high prices ever since then, along with always beating earnings per share estimates. Three imperial brands in Constellation's portfolio are Corona, Modelo, and Kim Crawford Wines. They have not only seen growth through these three brands, but also expanded their Robert Mondavi wine segment in the Asia-Pacific market. Domestically, Constellation Brands is stealing market share in the craft beer space through their most recent acquisition of Ballast Point Brewery, which they will be seeing profits coming in the short term months. To put it simply, Constellation consistently outperforms the U.S. beer industry, all of their competitors, and all other imports. It's time to take advantage of Constellation's future plans and buy this company for yourself. Now, we will all board onto our next growth hold-in. As many of you alumni may remember, Doc has sworn to us that he would never invest in an airline company. Well, after doing our research, we found one that fit the fundamental prospect of our growth fund. One of the reasons we love Southwest so much is that it perfectly aligns with our moderately bearish outlook as the number one domestic discount airline. When investing for growth, it is essential to find industries about to boom. Therefore, as seen on Southwest Quarterly Cash Flow Ground, it was identified that the airline industry peaks in the first quarter. After determining that we were interested in allocating into this industry, we used industry-specific metrics, such as revenue per available seat mile, which is everything in the airline industry. This led us to determine that Southwest was best positioned to hone in on this growth. Now, this technical analysis displays Southwest against one of their main competitors, JetBlue, displayed in the green line. I think this chart speaks for itself in saying that we made the right decision here. Now, this correct decision did not come without good behavioral analysis, which we realized is the airline industry was expanding during the period that we were investing. As you can see, when we bought Southwest, JetBlue had far similar fundamentals. However, we were able to determine that Southwest was the winner out of these twin companies due to the fundamentals and behavioral surrounding it. There is still time for you to capitalize on this opportunity. Now, we will exemplify to you another instance where we use technical analysis within the cafe. One of the great things about managing a growth fund is that we can make short-term earnings place on technology companies like Amazon. We bought into Amazon anticipating to make a play on their earnings post-market. After we bought them, we realized that their price was increasing at a significant rate. We did some investigating and found a historical trend indicating that whenever Amazon's price appreciated a significant amount before their earnings, it actually decreased by the same amount after market. With this knowledge, we decided to sell Amazon before their earnings indicated by the red circle on the chart. It turned out that after Amazon reported, their share price fell 13%, which turned out to be one of the best decisions the student fund managers made all year. Now, decisions like this can be shown in our year-to-day performance, which we'll be spoken about on the next slide. Now that you have seen our process and some of our top picks, we would like to show you our performance. The chart on the left shows that we have slightly underperformed our benchmark on a raw basis. Listen, we can talk about raw performance all day, but to any educated investor, and as I'm sure most of you already know, the most important metric is risk-adjusted performance. In this area, we have actually outperformed the market by nine basis points, as you can see in our alpha at the bottom of the chart. When constructing our portfolio, we are targeting a beta between 0.9 and 1.1. But with a moderately bearish outlook, we decided to take on less market risk with a portfolio of beta of 0.91. In addition to this, the company is in our portfolio or expect to grow their earnings at over 28% compared to the market average of under 3%. Let's recap. Our portfolio is positioned to not only take on less market risk, it is going to grow at a faster rate. So let me ask you this question, where would you rather put your money? Now, I'm sure many of you might be thinking, why wouldn't I just put my money into a well-known mutual fund like Vanguard or Goldman Sachs? In this graph, you will see our performance against some of these big-name players with the same objective. And I believe the numbers speak for themselves. Another key metric when analyzing a mutual fund is our portfolio turnover. Our turnover ratio is representative of our active management strategy in the sense that over the course of the semester, we make a high rate of trades while reallocating our funds, hedging our portfolio, and ultimately making earnings place. As we tie up their growth fund, there are a few key points to remember. We are seeking stocks, not companies, that are cyclical in nature and that show growth over a short-term time horizon. In addition to our growth objective, we are all disciplined fund managers who work 24-7 in order to achieve maximum performance given any market conditions. I would now like to invite Carla and Meg to the floor to introduce to you our value fund. One of the greatest value investors of our time is Warren Buffett. He used the analogy of the stock market to a movie theater. When a movie comes out, it's in high demand. Everybody rushes in and will pay a high price for those seats. If smoke appears in the theater, everybody rushes out. The price drops because nobody wants to go to that show. Value investing is all about finding companies that have smoke but no fire. This ensures that we're buying them at a discount to their intrinsic value. What Carla just mentioned exemplifies the key differences in our mindset as you move from growth to value investing as we are now not looking for companies in their boom period, but instead companies that have been beaten down and that will not only return to equilibrium, but who will continue to prosper over our long-term time horizon. When we look at value companies, we make sure that they have a strong business model of an even equally stronger management team to make sure that that propels into the future. After finding companies with strong core management values, we analyze the key fundamentals in order to determine companies that are trading at low price valuations. We understand that when value investing, behavioral fluctuations that happen on an everyday basis are not indicative of the company's overall worth. We analyze historical trends year-over-year in order to make projections into the future, aligning us with our buy-and-hold strategy. This has led us to determine the objective and target market for value. The objective for our value fund is domestic large gap. The target market is those typically above the age of 40, looking to minimize their risk and in turn accepting a more modest level of price appreciation, which aligns with the two to five-year time horizon. We will now explain our modified top-down approach. When constructing our value fund, we primarily focused on company analysis. When we analyze a company, we typically dig two feet wide and two miles deep and focus on the company's fundamentals, management, filings, behaviorals, and what our models tell us about each company. Even though we spent more time analyzing the company, we did not neglect our economic and sector analysis, as they are crucial when it came time to determining our final sector weights. The screen behind me displays our value weights versus the S&P 500. Some of you might be wondering why we did not allocate within the utility sector due to a high dividend yield. Reasoning is simple. The dividend yield is only one value metric within our value fund. Now we'd like to exemplify how we use our models to allocate these sector weights. In the same way that the growth process uses certain tools in order to narrow down the amount of companies that they might perform further fundamental financial and technical analysis on, the value process does the same thing. The first tool we'll talk about is an equity screener and it does just that. This tool allows us to plug in certain parameters and key metrics of companies that we would be willing to invest in. After going through the equity screener, we further narrow down our list by digging into the company's fundamentals. The screen behind me displays two companies, Gilead and AvV, both competitors in the biotech industry. As you can see, Gilead proves to be more fundamentally strong as they have a lower price to earnings ratio, price to book and a beta of less than one, which are key metrics we look for in value investing. After extensively researching Gilead's financial statements and management team, we then put them into our discounted cash flow model. We use this model in order to ensure that there's an adequate amount of upside to the company's intrinsic value. Intrinsic value is calculated using two methods, the even and multiple method and the perpetuity free cash flow growth method. We saw that Gilead had a 55% and 50% upside to their intrinsic value and therefore we move along in our value process. Another screener we look at is the Bloomberg Function PEBD. What this screen shows us is the average price to earnings ratio of a company over the past four years. When looking at the screen, if a company is currently trading below its average, we consider this company to be undervalued. Gilead is a great example of this and shows a 76% upside simply if they return to trading at their average PE. Next, we put Gilead into our risk return model. Generally, we look for companies that have an upside that's at least three times greater than their downside risk. We formulated a high price for Gilead based off our discounted cash flow models and other analyst recommendations and use the 52 week low price as our downside risk. We determined that Gilead's upside was three and a third times greater than their downside risk and therefore they made it through our value process. Now we'd like to present the rest of the companies that made it through this extensive process. Although this information is already provided in your fact sheets, we just wanted to give you one more chance to have a look at all the current holdings in our value fund. Now as Luke said, one thing we like to do is to make sure that we're investing in companies that have a much higher upside potential than downside risk. Another thing we like to do in order to hedge against market risk is to invest in those sectors and industries that we believe will drive our fund in the future. The key driver to our success in our value fund this semester has been over waiting specific sectors and reallocating our fund. Now we'd like to exemplify how we properly diversified our portfolio. One thing we like to place extra emphasis on especially with a long term objective is our correlation matrix. This tool allows us to measure the strength of the relationship between any two of our holdings. As you can see, red cells represent strong positive correlations between two holdings and green cells represent negative correlations. We try to have as many negative correlations as possible in order to ensure that we're diversifying away from unique risk. A good example of this comes from RPM who has no strong correlations with any of our other holdings. And to talk about RPM a little bit more I would like to invite up Carla. We have learned that if we take care of our people they take care of our customers and that is how you create shareholder value. This is a direct quote from RPM's current CEO, Frank C. Sullivan, grandson to their founder. The quality of this company is parallel to the quality of their management team. The value of 168 is RPM's mission statement and has been passed down from generation to generation. 168 is the number of hours in a week and RPM focuses on maximizing the potential of every hour of every week. So shareholders can rest assured that every hour is being spent maximizing shareholder value. Now, one of the greatest parts about RPM is their extensive product breadth. Even if you don't recognize RPM international by name I promise that you've come into contact with their products as they know they're on the shelves of my garage back home. During our holding period RPM's true valuation was shown when their main competitor Sherwin Williams decided to buy Valspar at a 33% premium. Prior to the acquisition announcement, RPM and Valspar were trading at relatively identical PE ratios, EV to EBITDA ratios, and had similar revenue figures. Then Sherwin Williams went and bought Valspar for 23 times their earnings and RPM has been moving closer to this earnings multiple ever since. This event has positioned RPM extremely well within an industry poised for consolidation. Now we'd like to present another one of our value holdings that is set to have a shining future. A perfect example of a true undervalued company is Signet Jewelers. As you can see, fundamentally they trade at a lower price valuation than their direct competitor Tiffany. Further, behaviorally they have just acquired Zales which has been underestimated by 50%. They will be reaping these synergies through 2019 which aligns with our long-term time horizon. To add to that, they have a strong business model which allows them to thrive in any economic environment. As Megan mentioned, its unique business model positions Signet to hedge against market volatility. An example of this is financing 35% of their products in-house. As you can see on the screen behind me, its revenues have grown year over year. Signet's annualized shareholder return sits at 53.2%. Not only does this speed out all of their competitors but the S&P retailing sector and the S&P itself. Signet has been experiencing increased product demand due to the fact that 95% of the global jewelry market falls between the price ranges of $100 to $10,000. This is right in line with Signet's product breadth. Further, Signet receives 50% of their revenues from Bridal which is the most inelastic form of jewelry and peaks in the fall, aligning with short-term time horizon as well. Although Signet has underperformed for us for our holding period yield, we are encouraged by their value line metrics such as price growth persistence, earnings predictability, and financial strength. On top of that, we think that by Signet adding value back to their shareholders, they will propel our fund driving moving forward. And now I'd like to call up our healthcare analysts, Luke and Carla. McKesson is a perfect example of an undervalued company and is one of our healthcare sector holdings in the supply chain industry. Luke and I performed fundamental analysis on McKesson and decided that they were undervalued. This was validated through the Bloomberg valuation function displayed on the screen. It shows that McKesson was at a 24% discount, the greatest among its industry peers. As you can see on this three-year price chart, shares of McKesson have taken a beating recently, mainly driven by the potential acquisition of Rite Aid by Walgreens. Now, shares of McKesson had reached a long-term support line at $155 a share which allowed us to buy at a discounted price. We attributed this to a market overreaction. As the drop in price far exceeded the possible 8% revenue that McKesson would experience. Not only this, but key acquisitions of vantage oncology and biologics more than make up for any potentially lost revenues. These acquisitions expand McKesson's distribution base into the cancer research industry. Not only will these acquisitions aid their top line but also add 11 cents in earnings per share to their bottom line by 2017. It's great value holdings like McKesson that have driven our performance so far this semester. And now I'd like to invite up Taylor, Gage, and Ryan to talk about our year-to-day performance. As shown on the screen behind me, we have outperformed the S&P 500 on a raw return basis. We are so excited about our performance that we're gonna talk about it a little bit more. Not only have we outperformed on a raw basis, but we've also outperformed on a risk-adjusted basis as displayed by our Alpha 0.67. Now, Mr. Malafonte, I saw you reaching for your wallet but slow down, there'll be plenty of time for that after the presentation. So before you all give us your money to invest, we just wanna reiterate that although this is a value fund that does not mean that we don't invest in companies with growth characteristics. Not only did we outperform the S&P but also other mutual funds with the same objective. Because of our buy and holding strategy, this allowed us to achieve a turnover ratio of a relatively low turnover ratio compared to our competitors. An advantage to this is that it helps keep our transaction fees down, which can add up in the long run. However, there does come a time when one of our holdings returns to its intrinsic value and we need to reallocate. A perfect example of this is our previous holding in Novo Nordisk. We held Novo Nordisk for a year and a half and we sold them on April 4th, 2016 for a profit of 28.6%. Now we realize that although we do operate a buy and hold strategy, there inevitably comes a time where we need to take profits on a company that's reached its intrinsic value. Overall, to be a value investor requires a different mindset in order to be successful in picking companies that fit our funds' objective. A few key points we wanted to drive home in conclusion of the Value Fund is that we really pay attention to a strong management team, a strong business model, and a company that is undervalued in our pay. This semester, we have not only positioned our Value Fund to excel in our holding period yield, but also see future prosperity. Now that we've explained to you the investment strategies behind both of our funds, we'd now like to take you into our everyday world and show you the process behind CAFE. Within CAFE, we were fortunate enough to utilize real world platforms such as Quote Equity Plus, Bloomberg, and Zach's Investment Research. Having access to the CAFE and these real-time platforms 24-7, makes sure that we are constantly up to date, which is a must for our active management strategy. Now let me be clear, CAFE is a privilege. For those families out there that think we are crazy for writing 4M reports, or staying up all night, we have not only enhanced our professional characteristics, but prepared for industry. Each one of us entered CAFE with different skill sets, and throughout this semester, we learned to utilize these to drive the success of our funds. A perfect example of two people who came into this semester with completely different skill sets are Megan and me, where I came in with a more quantitative skill set and investment approach, and Megan came in with a more qualitative skill set and investment approach. An example of this is when Luke was asked to create a Monte Carlo simulator. He had no idea what it was, but figured it out and completed the entire thing in one hour. An example of Megan's qualitative aspects are her ability to go and read about 30 articles about one company and retain all the information. It is the challenges that we face in CAFE that allow us to feed off of each other's strengths while improving on our weaknesses. Building upon each other's strengths has led to each and every one of us becoming a more well-rounded analyst, both quantitatively and qualitatively. This teamwork is reflected in our checks and balances. Comparable to industry, we not only implement checks and balances in the CAFE day in and day out. Entering into the CAFE is limited only to current student fund managers, and this is enforced through key card access. Along with this, the passwords for each of our funds are changed every semester to ensure security. Our corporate structure stems from our managing director, our executive director, excuse me, our managing director, our associate directors and the student fund managers. One unique part about CAFE is that each student fund manager individually takes on a leadership role as we have the positions of first and second chair that we rotate through every week. I was fortunate enough to be one of the first chairs during one of our all-nighters this semester. Not only did I need to exemplify my leadership abilities, but I need to lead discussion and meet Doc's hard deadline to mark it open next day. As second chair, my role was to act as an assistant to Ryan, taking notes, documenting discussions and also making sure that our deadlines were met. Furthermore, our management structure allows us to be extremely efficient when making decisions. When making any decision in the CAFE, it is crucial that we have majority consensus among all student fund managers, along with approval from our assistant directors and Doc. Before implementing any trade, we make sure we have three different sets of eyes on the trade to make sure the quantity of the order is correct and the market order is correct. This just touches upon how important it is that we are always constantly communicating. As with any successful business practice, thorough communication is key and is stressed on all levels within the CAFE. The student fund managers send out four reports a day. One at market open, one at midday, one at market close, and one at 4 a.m. to keep up with the international markets. On top of that, we're constantly emailing each other and group messaging to keep up with the constant nudes of our funds. Now, my favorite example of when we used our communication platforms to make an educated investment decision was when we held Ulta Beauty through their earnings announcement during our spring break. The student fund managers, ADs and Doc, were all in different countries in different time zones. We were able to communicate effectively to present the bull and bear cases on holding Ulta through their earnings after an article came out about their short interest spike. Needless to say, we held Ulta through their earnings and made 17% overnight. I would now like to invite up one of my best friends, Michael Correale, and help me conclude this presentation. So, we've taken you all for the process of what goes on in the CAFE, showed you a little bit about how we pick our companies, but we want to take this time now to tell you about what CAFE truly means to all the student fund managers. We came into the investment program with the idea of bettering our financial mindsets, working harder to become better investors, and of course, to prepare ourselves for life after graduation. What we have all realized at the end of this program is that we have been able to enhance our skills in terms of communication, our work ethic, and the persistence and drive that we have to make this fund better. So, I know this is true for myself, as I'm sure it is for the rest of the student fund managers, but when I first found out about Doc's CAFE program, I truly knew at that moment that I wanted to be a part of it. Not only because I would get to wear a suit and tie every single day, but also because it is the highest level of achievement that you can receive from the Mario Gabelli School of Business. Now, that being said, I couldn't imagine a better way to spend the last four months of my senior year. In addition to this, we would like to give a special thanks to two individuals who truly earn it. First being our conductor, Justin Edelman. This man is one of the hardest workers I've ever met and has probably gotten the least amount of sleep out of all of us in the last five days. And the second one is our director, Doc. He is truly the face of this organization and we work hard every single day to make you proud, Doc. So thank you. We all came into this program with the mindset of bettering ourselves for life after Roger Williams. But what we have all realized at the end of this program is that beside me stands a group of people that I can now call my family. Thank you all for being here today and we hope that you enjoyed our CAFE presentation. We'll invite up David and Kelly to give a special thanks to some of our investors. So here in the CAFE, we're fortunate enough to be able to take trips all around the globe. And Dave and I, along with our former student fund managers, were able to travel to London and Scotland over our spring break this semester. So we have to do a lot of really cool things of one awesome experience that we had in London was our visit to the Baltic Exchange. For those of you who don't know the Baltic Exchange, basically, if you have a huge amount of a commodity needed and you need to ship it somewhere, these guys arrange the entire process for you, like hundreds of thousands of tons of shipping. And the CEO actually personally talked to us for over an hour answering all of our questions and telling us about what he does. So that was an amazing experience. And in Scotland, we had the opportunity to present to one of the top economics professors in the world at the University of Edinburgh. We were also able to just absorb the culture of the tourists at the Castle of Edinburgh and Mary King's close. So for that, we'd love to give a special thanks to Hans Christensen from MJX Asset Management. Also, I know Jean McTiernan alluded to this earlier, but thank you to all of you, all the former cafe alums and everybody who donated to the Cafe Capital Campaign. That's one of the, that's a huge factor for us being able to go to Tokyo. I've never been before. I'm really, really excited. So thank you all very much. That's the end of our presentation. So now we'd love to answer any questions you may have about us or what we do in cafe. What are some of the challenges you guys faced with the ongoing domestic elections? Have you noticed any sectors reacting kind of very quickly to news or kind of did you do an analysis of how current news and the broad market can affect any of these other sectors? So an example of a sector that was really like affected by any political, the political environment would be the healthcare sector. So I'm the healthcare sector analyst and we invested in Gilead because we saw that they were pushed down to around seven times their earnings basically just because of the potential for their pill prices to fall. Just because Hillary Clinton sends out a tweet and says we're gonna take care of these drug prices ridiculous and then nothing actually happens. So we found that that was a good opportunity to buy an undervalued company. So again, congratulations to all of you. I think you guys did a wonderful job. I know you put in a lot of time. Quick question regarding stop losses and selling out of your positions. How did you guys determine when to sell out of a position once you realized a specific gain? Was that based off a certain number or percentage? And both on the upside and the downside. Yeah, so stop losses is obviously a big part of what we do in the cafe. But when analyzing these types of situations, we make sure that we check the behaviorals heavily because as Luke just mentioned, they do play a huge part in what we wanna do moving forward. But when we originally pick our companies and pitch them to the rest of the student fund managers, we set a price at which we think we would rather take profits or potentially sell. So this kind of gives us a better idea of when we may want to get out of that position. Just a quick question, guys. First of all, excellent job. Everyone did a really fantastic job, I understand. You guys talked a lot about your winners, but outside of the sit-in end, which you seem to be still bullish on, were there any other losses? I mean, by your raw return on the SUNY network, can you talk about a couple lessons you learned from those? So I think we've lost about a percent on maybe one of our company's checkpoint technologies. So we're in there within the technology sector. We've held them throughout this semester. We inherited them in our fund and we are confident with them moving forward. But as of our holding period yield, we are apparently down on them. A lot of what we do is with a longer focus, especially for value, so you have to be able to go through some of the bumpier times if you believe in a company's business model. So checkpoint is perfect, for example, because they do cyber security. They're the largest company in the world that only does cyber security, so we're really confident that they're a well-positioned going forward, even if there's bumps in the road. Congratulations. Congratulations, great job, everyone. I think I heard earlier that you need a majority consensus on investment. What did some of the disagreements look like and how did those work out? I'll talk about that. This group of people standing before you are amazing. I love every single one of them, but we did not get along very well. Trying to get a consensus on one decision was very difficult, but it really came down to presenting the bear in both cases of both sides of the argument until we were able to determine questions that were asked, and then could you validate those questions such as that? And then we were able to come to a consensus and then run that through our checks and balances. Yeah, a good example of that is when I was first chair one week, we had to find a sweep and we literally had, everybody was arguing back and forth and I just said, everybody stop, give me one company. I wrote every single ticker up on the board. So what we did was just vote, like pick two of these companies, we'll put a vote in, and then we narrowed it down to two, had everybody vote on those two again, and then after we voted, had the one left, we then did one last vote to make sure we had a majority consensus on that one. So it took a while to get to a consensus, but we finally did. Any other questions? I noticed that financials was a very heavily weighted, I think it was the second kind, the second weight in both portfolios, and that seems to be a little bit contrary to where the market is weighting today. I was just wondering how you came to that conclusion. Yeah, so in the growth fund, we were actually slightly underweight by a couple percent in financials because we don't see a ton of growth, and we've mostly stayed away from big banks. In the value fund, we are a little overweight in financials because a lot of those companies have been beaten up so much that in the long term, we see them coming back to that intrinsic value and gaining a lot of percentage for us. Was there any thought ever to start looking at the derivative markets at all, swap futures options to enhance the yields at all? Yeah, we typically just invest in equity, so that really hasn't been too much thought occasionally we do try to make plays on potentially a commodity through an ETF which is an exchange-traded fund, but other than that, we stick to basically just that price. I like to keep my job. We usually compete in competitions nationwide and a lot of those competitions have certain rules and what you do best and what you can't, so we stick mostly to equity. Can you guys talk a little bit about how you prepare for Tokyo? So this presentation definitely helped us prepare for Tokyo in a lot of ways. It's definitely also good for us to get some experience speaking with people, presenting our funds, being comfortable with that because we're going to be presenting at Kyoto University, which is gonna be really exciting. So I saw that you guys were mostly interfering with all domestic, even if maybe you're reasoning behind the way Europe and some of the other places where valuations of growth have achieved in comparison. So for us, it's a lot easier to understand the companies and some of the cash flows and the bull and bear cases for companies in the United States as opposed to in a foreign country just because we've grown up in this market and this is where we live, so primarily why. In addition to that, we're very bearish in a lot of the global economies like China, Japan, Europe, and a lot of the platforms we use don't allow us to be a type of information that the companies domestically, like BJ kind of just said, so it's hard to know the company as well when you can't access the same information about that company or stock. You guys did an excellent job. I see that you more than underweighted stay away from energy, God bless you. And I'm just wondering as you saw this whole industry bottom out, if you had conversations about, at least from your value perspective, coming back into it and whether you ever decided to do that and why. Well, we actually decided not to get back into energy due to our fundamental metrics that we have to adhere to. We did screen for energy and we weren't interested when it did look like it was at an undervalued point. However, due to what Brian mentioned in the presentation, how it's very headline driven and volatile and didn't meet our fundamental metrics we were unable to allocate into the sector. We have that conversation basically every day. We're constantly talking about what the other countries are doing in terms of their production, whether they're gonna come offline or not. And so it's definitely something in our thoughts day to day. One of the biggest problems with all these energy companies and we really wanted to put an energy company in our value fund with so many of them have taken out tons and tons of debt in order to just maintain their business that it's hard to justify investing in one of those companies. You guys talked about how you're bearish on a lot of the countries around the world and you're bearish on the overall market. Could you maybe identify some of the primary risks that you see moving forward this next six to 12 months? Yeah, so if you look in Europe, I mean, they're at the point where they need to continue their quantitative easing and there's the potential for the Brexit happening also and they don't know the economic consequences of that either. So that's one reason we would stay out of Europe. So we're also kind of bearish, not many people know this, but this year, year to date has actually been one of the worst years for hedge fund managers since 2008 when the market crashed. So this alone kind of makes us think that maybe there's some sort of bubble forming that eventually will lead up to what can be another potential crash. So our fiduciary responsibility at the doc and the university as itself kind of keeps us very modest in our investing, our besting opportunities. A really, really fantastic job guys. I know personally how much work it takes to put something like this together and you guys really did a fantastic job. Could you talk a little bit about kind of what process it takes once you guys pick the winners and like Carlo was saying, you guys kill each other over the positions that you want to take. Do you guys just send in 25 market orders or do you break it up? Talk a little bit about that process. Well, as Valer mentioned, we have the VWAP off, we run technicals all the time. And really for our growth fund, behavioral, it's like kind of what drives our fund. So we also, I mean, the ultimate example was one company that we held through earnings and it peaked, we made 17% overnight. And then we realized, look, we've made almost 20% on this company, we're actively managed. So we're gonna turn that over and invest in another fund that can make the same amount of percentage. Obviously, as Carlo mentioned, we don't necessarily agree with every company that goes into this fund. I know Megan had a pitch hilton probably five times to us because everyone's like, nah. Same with love. No one wanted an airline because we thought it was too behaviorally driven. And through that technical analysis, we actually find an off-no buy-in point to excel in the future. And also it's really important that we remember our sector weightings. So when we're buying into a company, we don't want to be overweight in a certain sector because we plan out before we buy in, we plan out what sectors we potentially want to be overweight and underweight in. So that's how we determine how many shares we buy and what percentage we want in our fund. At the end of the day, we ultimately make sure that there's complete consensus on a pick. So, I mean, it's not like we're disagreeing when we're buying in. We need at least nine votes for any company that gets into the fund. So at the end, we're all in agreement when we end up buying it. Can you guys talk a little bit about your market outlook now having gone through this semester before we're compared to where you get? Yeah, so we performed our initial economic analysis back in January when the markets were tanking and there was a lot of bearish signs in the market. But we saw, there's kind of been mixed signals recently with a lot of economic indicators. So like a week or two ago, I remember there was like the industrial, our capacity utilization fell to like its lowest level in seven years. But then there's other economic indicators like consumer spending that came out today which was above estimates. So there's a lot of mixed signals coming out right now but we were overall more, a little more like moderately bearish as opposed to completely bearish towards the end of the semester. All right, well it seems that that's about it. So thank you very much everybody for coming. Thank you for all the questions. I'll turn it over to you. Thanks, guys. I have to say that days like this make me especially conscious of the privilege that I have serving as Dean of this terrific school of business with Mario Gabelli's name on it. So just join me in giving our student investment fund managers another big round of applause. So I wanna thank you all again for coming and joining us this afternoon. I'm sure we have a lot of proud parents in the room and it would be great to have a chance to visit with all of you while you're here today. I know some of you will be back in a couple of weeks for commencement but we are glad you're here and there is a reception outside. You'll have a chance to talk more with the student fund managers and with each other. And again, thank you for coming. This was a terrific afternoon. You guys just did a great job. Congratulations to you. Thank you. Thank you. Thank you. Thank you.