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Welcome to UIS

The Undergraduate Investment Society at UCLA (UIS) might be run by undergraduates but is not restricted to them. UIS is the largest investing organization at UCLA that delivers the study, practice, and concepts of Investing to the entire UCLA population through seminars, presentations, events, and this website. Since its inception, UIS has endeavored to connect UCLA students with the knowledge of the inner workings behind the intricate world of finance so that they can join the ranks of the world’s best investors. Events encompass workshops that teach the fundamentals of investing, club seminars on current investing strategies and economic events, and presentations delivered by speakers from firms that emblematize the most successful firms in the finance industry. Becoming a part of UIS establishes a young bruin above all others.

Spring 2015 Meetings Will Take Place Mondays in MS6201 from 6:00PM to 7:30PM!

Newest Articles:

Market Recap – Week Ended April 17, 2015

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As large cap stocks have seen record highs this mid week, a sharp decline quickly followed that was mainly driven by the uncertainties in Greece as speculation grew that it would be unable to make scheduled payments on its bailout loan. The news heightened speculation that Greece might default on its debt and abandon the shared European currency.

On the other hand, energy stocks and oil prices surged on Tuesday and Wednesday, supported by news of a decline in North Dakota oil production. While producers have cut back on unproductive drilling operations, U.S. supply had continued to grow stubbornly, and traders were encouraged to finally see evidence of a market response to last year’s dramatic decline in crude prices.

In other news, Bloomberg LP was hit by a massive computer-network outage Friday, forcing its terminals out of action for hours and leading to major disruptions for traders around the world. And this caused the U.K. to postpone a scheduled multibillion buyback of 3 billion pounds of government debt, an indirect showcase of the reliance on technology in finance.

Inversely Diverse Selection

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Upon looking around at the other Investment related clubs available on campus, a few interesting themes have become quite clear. Chief among which is somewhat of an inverse selection which can be quite dangerous to the average individual. By this, I mean the process through which something which group A should have is taken up by group B, and something which group B should have is taken up by group A. The two groups inversely select what they ‘should’.

Now, I cannot say what is going on specifically in the other clubs on campus, but I have to worry that Inverse Selection is running rampant.

At UIS, we attempt to give students a wholesome view of the markets, but in the end encourage that diversification is key along with prudent planning and financial stability. Alpha, the returns above portfolio baseline (some people would argue that portfolio baseline is something like the 500 or the Dow), is a very expensive strategy; an expense which is measured in variance. While we demonstrate to our members what alpha is and different methods to obtain it, it is always with the warning or caveat that it can bring unwanted risk. Many groups or clubs encourage individuals to believe that returns and the costs of generating them are a function of hard work, effort, and time. However, that simply isn’t true.

Alpha strategies (value investing; investing on fundamentals, ratios, etc.; basic charting; most non-passive strategies) come at two costs, one that people know and one that people seem to forget about. The first is the amount of time that people put into executing these strategies (reading the charts, the books), but then the other is the cost in removing assets from an otherwise diversified strategy. Most active investors will invest in fewer stocks than their passive counterparts. This is just the nature of the game. But they do so, and then seem to completely forget that they have just increased their cost by investing time in research AND by increasing the risk of a portfolio which is now necessarily less diversified than it would have been in a passive scenario (unless retail active investors are able to manage a portfolio of 500 stocks (which would be an amazing accomplishment), then the SPY trumps most active investors diversification almost without cost.

But you see, from our experience, it tends to be those without a huge amount of money who get caught up in the idea of active management. It tends to be individuals without a lot of money to burn who end up falling prey to these ideas and concepts and purely investing on value or charts, or something else, when it should be people with plenty of money who take on these endeavors simply because they have more money to lose without damaging their well-being. So, you see, we have a strong tendency towards inverse selection – those who can afford it, don’t, and those who can’t afford it, do.

So before giving up and forgetting about diversification in light of the grandeur and splendor that is active management, remember that the costs associated are very, very, high. You don’t just pay in your time, but pay in the added volatility of returns which you would otherwise not have if you bought into a highly diversified portfolio.

Reset your ThinkorSwim Account

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In order to get an accurate current account Profit and Loss balance, you will need to reset your ThinkorSwim Practice Account balance in between trading competitions. This process has become more difficult in recent updates, and I will outline how to reset it here. Note: This will also reset your Overall Profit and Loss and possibly your trade history on this account. If you want to save that information either write it down somewhere else or create a new ThinkorSwim Practice account.

First, you will need to login to ThinkorSwim as you normally do. Then head over to the ‘Monitor’ Tab, and then click ‘Activity and Positions.’

This is what your screen should look like (if you’re on a Mac, but PC and Linux should be similar):

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Then, on the very top of the application window you will see ‘PM’ for ‘paper money’, ‘ Connected’, ‘Delayed data,’ the current server time (may not be PST), and ‘Account’. Now, Account may say something like ‘ Account: < TOTAL> (ALL ACCOUNTS)’. Click this and select your ‘margin’ account.

TwoAfter you have done that, down the page slightly, under the ‘Position Statement’, you will see a button which reads Adjust Account. Click this, and check the check mark which says ‘Reset All Balance and Positions.’ Make sure to select Account Margin Type as Margin, and Set Account Cash to DEFAULT. If you select any larger amount of cash, you will be disqualified from trading.

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Investment Society Trading Competition Round 1 Results

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I would like to congratulate the winners of the first Round of the UCLA Investment Society Trading Competition. Placing in the top four is no easy task, so great job!

Places:

1st – Kevin X

2nd – Tyler Williamson

3rd – Hanphenie Zhou

4th – Michael Evans

 

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