This week our current events began pertaining to Israel and their economy. The first current event covered Israel’s international growing commerce. Governor John Ben El visited Israel in hopes of strengthening ties with Israel and Louisiana. Israel provides a unique opportunity to many American states and it is a big deal that governors and people of authority are making the effort to build the US-Israel relationship. Israel is becoming an international trade partner with many countries due to its high capacity of start-ups and its rapidly growing opportunities. Governor John Ben El of Louisiana discussed potential relationship deals to prioritize them as a future partner. The other current event involved the reciprocal procurement between Boeing and Israel which was made to ease tensions to U.S. aid packages. This is very important because Israel is no longer in fear of losses and Boeing secured business from the restructuring of the benefit package.
VP of Consulting, Gabby Fishe, taught new members about the business model canvas (BMC). The business model canvas is a layout that forces you to visually plot a company in a certain way which forces you to see that company in a new perspective. This is one method to look at the company in a universal way with the value propositions and specifics relating to the consumer and drivers of the business. Students were also introduced to the case study and had the opportunity to walk through it as a class, ask questions, and clarify any confusion. In the following week, students will begin working on their group case studies, starting with researching next class and finishing the projects outside of class.
VP of Fund, Matthew Blanks, walked students through an example of a previous year’s TAMID Group stock pitch from Oracle. Students were also quickly given another overview of valuation methodologies and the three financial statements. This transitioned us into working capital, which shows how the current assets and current liabilities affect the value of a company (An increase in working capital would decrease a company’s value and an increase in cash flow would increase a company’s value.
Additionally, the three main methods of valuation we reviewed were discounted cash flow (DCF), comparable companies (public comps) and precedent transactions. These all lead us to plotting the range of valuations on a “football field” graph. This shows how the value of a company varies depending on which valuation method and assumptions are used. Students also learned about the cost of financing (weighted average cost of capital or WACC) which is used to discount the future cash flows in a DCF to their net present value (NPV). This uses the cost of debt and equity which are the cost of interest rate and CAPM model. Lastly, public comps and precedent transaction analyses are used to compare the company to similar valued companies in order to get an idea of how much it should be valued at in relation to similarly valued companies and transactions that have taken place.
TAMID took advantage of a great opportunity that made its way to campus. This past week, Tal Brody visited the University of Illinois and we were fortunate enough to host a private event with him and hear about his life and all the work he has accomplished with Israel. Tal began as a basketball player at Illinois, he was drafted to the NBA, deferred his professional career in the US to play in the Maccabi games in Israel, and has now lived and worked in Israel for the past 40+ years. Currently, he acts as the US-Israel Goodwill Ambassador and continues to work with countless Israeli companies. Additionally, Tal spends a lot of his time travelling the globe in order to speak to students in Israel and the US about his journey and why he chose to start and end his career/life in Israel. It was very interesting and inspiring to hear from Tal, as he helped instill in our members a lasting connection and importance of Israel, its culture, economy and plentiful opportunities. After, everyone participated in a Q&A which allowed collaboration and continued learning. Tal did a fantastic job of motivating our members to finish the semester on a good note and finish our final capstone projects.
This week’s meeting continued with our weekly current event sector of the class. This has served as a great resource to our members as they are staying informed regarding the events happening in the world and how they affect the economic markets. The extreme rise and fall (volatility) of the markets has been emphasised by many news sources, therefore it an emphasized topic throughout our meeting as well. An important point was that the Dow Jones plunged enough to wipe out 2018’s gains. Notable stocks (FAANG stocks) such as Amazon, Microsoft and Facebook all fell ~5%. The volatile markets may be a result of the unresolved political and economic tensions with China and Saudi Arabia, leaving the future uncertain. The other current event group introduced the conversation of the migrant caravan traveling to the United States to seek safety. People in other countries face the fear of persecution and hope that they can reach a place where they will be free of these issues. Social media has been a large focus of the migrant caravan which is different in the past and interesting to explore.
Following these presentations, Gabby led a Kahoot session which was a interactive method to learn and review the materials from the Harvard Business School Case Study of TEVA pharmaceuticals. It was a great way to cover the information of the company and compare it to what we have learned so far in our market analysis sessions. TEVA is a company with a very unique history which plays an important role in the pharmaceutical industry (The history and background of a company is useful to know and can be used to complete decision-making processes). We also applied market analysis strategies to dig deeper and understand the relevant aspects of TEVA Pharmaceuticals.
Before transitioning, students from both the consulting branch and investment fund listened to a relevant TED Talk. Simon Sinek spoke about how to inspire great leaders and how to reach the consumer. This TED talk was very applicable to today’s consulting session because reaching the consumer was at the core of the lesson. At the center of Sinek’s structure is finding your “why” and next, branching out to find your “how” and then finally your “what.” Your “why” is always the most important aspect because this is what pulls emotions and grabs your consumers’ attention.
The fund session was full of vibrant conversation and great questions. All students were very engaged in the presentation covering the business cycle where we discussed seasonal and cyclical businesses with specific examples. We got to see everyone’s creativity in choosing specific businesses that followed these patterns and looking at their market pattern. Creating a diversifying portfolio of stocks of companies that follow a non-cyclical pattern to counter the cyclical stocks was another topic we covered. Toward the end of the session, we discussed bonds and other methods of borrowing through securities. Foreign currency was a topic that sparked conversation because of the different conversion rates and relationships between the countries that contribute to the markets. This was a great way to end class and transition the conversation into next week.
This week’s meeting consisted of starting with a newly implemented rule. From this point forward, sessions will begin with a current events presentation led by a new member each week. We suggest that current events presentations focus on Israel, foreign and emerging markets, or the United States. Starting sessions in this manner will allow our students to stay informed, engaged and connected with Israel, as well as markets and events outside of the US. This week, new members Maddy and Sydney discussed Google removing themselves from the future investment initiative summit in Saudi Arabia due to the disappearance of journalist Jamal Khashoggi. Additionally, Jacob and Joe spoke about the stock market’s recent volatility.
Following these presentations, Gabby (VP Consulting) led the consulting session which covered market analysis. Students learned that conducting due diligence on the industry or market you’re focusing on is crucial in order to stay competitive and on par with similar companies in said sector. The history and background of the company is useful as well and can be used to complete your decision-making process. Market analysis allows a company to dig deeper and understand your target market, consumer habits, etc…
Before transitioning, students from both the consulting branch and investment fund listened to a relevant TED Talk. Ray Dalio, American billionaire investor, spoke about transparency in the workplace, how and why consumer decisions are made, and why it is crucial to have a mission statement that drives your business and inspires your customers. His speech was very eye opening and influential.
Students underwent another weekly education session with topics covering EBITDA and the various valuation methodologies. Matt (VP Investment Fund) walked students through the importance of certain ratios and multiples in order to piece together parts of a comparable company analysis. Students also worked in a collaborative setting by sifting through Ralph Lauren’s 10k and extrapolating data such as operating profit, gross margin and EBITDA. Getting familiar with the different financial statements early on will enable students to become more comfortable when pitching a stock or conducting equity research. It was a tough session but new members handled the information well by asking questions and remaining attentive.
TAMID Group Beta Chapter at Illinois has officially partnered with Rabbi Dovid Tiechtel. Dovid is rich in knowledge and resources and will act as a mentor/role model to the organization. We look forward to working and collaborating with Dovid for the foreseeable future.
Additionally, our chapter had an incredible class this week with our guest speaker – Founder and CEO of Aqus – Kevin Kassel. It was great to hear from an entrepreneur who started as a young and ambitious college student at USC. Our session on Wednesday began with a consulting lesson followed by the investment fund.
This week, students had the opportunity to learn about market research. This is an important topic since the various customer and consumer outreach methods vary depending on industry, product and target market. As we learned from our speaker, there can be failures when trying to reach your goals, but changing and adapting your marketing tactics is essential in gaining recognition, expanding and succeeding. Researching a specific industry and consumers in that industry helps with the planning, organization, and creative aspects of marketing and selling your product. There are different factors to research including market sizing, studying industry trends and concept/product evaluations. We also learned about the differences between top down and bottom up research. Both can be very useful because they provide different perspectives on the market. A top down method provides a more general to specific analysis where as a bottom up method serves as a specific focus moving toward feedback and observation.
We then moved into our TEVA market research question in which TAMID students will work on over the course of the week and come back to class with ideas for next week.
This week, students covered basic accounting principles as it is important in understanding the foundation before moving on to advanced specifics. Everyone in TAMID gained a baseline knowledge, but we will continue to build and strengthen our technical skills throughout the semester.
Specifically, students learned about the financial statements (balance sheet, income statement and statement of cash flows). One important aspect covered was the significance of the different points in time that these statements occur (i.e the income statement covers a period of time, while the balance sheet is a snapshot of a point in time). Lastly, the fundamental accounting equation was an essential part of this lesson to help everyone understand that everything must be balanced in a company’s daily financial procedures.
Today we had a brief overview of the different sections of consulting and investing. These overviews allowed the members to choose which branch of TAMID they would like to participate in throughout the semester (investment fund, consulting, or both). We encouraged most students to join both branches as it allows different perspectives into the Israeli economy and business in general. The consulting and investment fund build off of each other to provide a deeper understanding to our members.
Students got to dip their toes into the semester of education on the consulting side of TAMID. After providing a thorough overview of the semester, students briefly learned about the different analyses in which we will be learning and implementing. Market research, customer analysis and industry analysis are all service areas which are essential to the process.
The investment fund overview consisted of a presentation covering why investing matters and how students will be able to apply it with the end goal of learning how to create future cash for investors (how to increase returns when investing). We distinguished the difference between book value and market value, which is the realizable gain/value. The financial statements were also briefly introduced because these act as the financial roadmap of a company. All of these fundamentals led to learning strategies of investing which we will dive deeper into next class.
Later in the week, TAMID Group Beta Chapter at Illinois had a social event. New members and executive members ordered pizza and got to know each other on a closer level. It was a great experience – we look forward to continue fostering professional relationships and learning as a unit.
The first semester of TAMID Group Beta Chapter at the University of Illinois has officially begun! Our first meeting was a great kick off to the year. All of our founding members got to meet each other and officially introduce themselves. After introductions, we went through a detailed overview of what the semester will entail, how the process works, and our expectations for the rest of the year.
In our second session, students broke up into various groups and ran through a professional development seminar. The members were able to gain expertise in various professional areas including resume critiques, email etiquette, LinkedIn review, and interview preparation. Executive board members were given the opportunity to lead one of these stations and provide examples and feedback. Each station included activities, examples, and a Q&A to close up each individual session with the goal of our members becoming more well-rounded in all aspects of professional development.
At the end of the session, students were again placed in groups and tasked with creating and presenting a brief slideshow on potential ideas for our fundraising event. They will use their creativity to configure a way to raise money for our organization. We are excited to see everyone’s ideas from these presentations that will be presented on Wednesday, and we look forward to walking through the first session of TAMID Consulting and the TAMID Investment Fund!