BUS-123 - Introduction to Investments
Spring 2018

Southwestern Community College
Instructor: Frank Paiano


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Announcements and class material begin below. Keep scrolling.



Be not afraid.

"The moral arc of the universe in long, but it bends toward justice." -- Martin Luther King, Jr.

"This country is so fundamentally strong it can survive its leaders." -- Louis Rukeyser

Is the American republic built to withstand a malevolent president?

Same arguments as during Fascism in the 1930's and 1940's.


*** Text Book Information at the Bottom of the Page ***

Yes, yes, I know. This web page looks intimidating. "Aye, Paquito! All those links!"
Relax. Much of it is duplicated. (In the case of the presentations, quaduplicated!)
Just get started and remember to listen, watch, and work at least an hour each day.




Next Exam

Next Exam
BUS-123-01
Face-to-Face
Tuesdays & Thursdays
8:35 a.m. to 10:00 am
Exam #1: Chapters 1 and 4
Tentative: Thursday, February 22nd

Chapter 1: Introduction; Overview of the Investment Universe, Risk versus Return, Short-term Instruments
Chapter 4: Mutual Funds
BUS-123-501 & 502
Online
Online Exam #1: Chapters 1 and 4
Thursday, February 22nd, to Sunday, February 25th

Chapter 1: Introduction; Overview of the Investment Universe, Risk versus Return, Short-term Instruments
Chapter 4: Mutual Funds


Announcements

Announcements for Online Students  (Announcements also available in Canvas)

Week #4 - Finish Mutual Funds - Exam 1 This Week - Chapter 1 Assignments Due This Week - Video - Video (CC) - Audio
    Due: Exam #1, Chapter 1 Assignments

Week #3 - Starting Mutual Funds - Exam 1 Next Week – Chapter 1 Assignments Due Next Week - Video - Video (CC) - Audio
    Due: Start chapter 4 on mutual funds, Short-term discussion posts due this week, Chapter 1 assignments and Exam #1 next week
Week #2 - Continuing Introduction to Investments - Risk versus Return - Short-term Investments - Video - Video (CC) - Audio
    Due: Finish chapter 1 material
Week #1 - Introduction and Welcome to BUS-123, Introduction to Investments, for Spring 2018 - Video - Video (CC) - Audio
    Due: Please Introduce Yourself Discussion Forum
Week #0 - Presemester Announcement -  For students enrolled in the online BUS-123, Introduction to Investments, class



Chapter Presentations, Handouts, and Assignments


Part 1: Introduction


Syllabus:
BUS-123-01 Tuesday/Thursday - Audio commentary will be created during Lecture 1 on January 30th
  You could also listen to the Audio Commentary for the Online Classes Syllabus. It is almost exactly the same.
BUS-123-501 & 502 Online - Audio Commentary of Online Class Syllabus - Long Format  Long format in Canvas
Your Humble Professor Introduces Himself
Your Humble Professor Introduces Himself (CC)  I am still futzin' around with this video stuff.
Your Humble Professor Introduces Himself with just audio
A Guided Tour of the BUS-123, Introduction to Investments, Class Web Site - Closed Captioned - Audio  Uh, what yer lookin' at right now.

Chapter 1 and Notes:
What is an Investment?
The Investment Universe
Risk and Return
Short-term Securities


Chapter 1 Materials
Presentation
Study Guide - Video Commentary - Video Commentary (CC) - Audio Commentary
Assignment - Commentary   (The process is more important than the information and answers. Enjoy!
Short-Term Investments Assignment - Commentary
TreasuryDirect.gov Assignment - Commentary
   TreasuryDirect.gov  Your Federal Tax Dollars at Work!
   Cetes Directo    El TreasuryDirect.gov de Mexico - Miralo - Una tasa de interes mas grande que los estados unidos
How to Submit Assignments - Commentary
Discussion Boards Assignment (Online students only) - Commentary
  Add your picture to the discussion boards!  We want to see your smiling face!

Security Types Matching Handout - Answer Key   Memorize for exam!

Sample Portfolio Class Project - Commentary
  Snapshot (16 Feb 2018)  Aye! We started just before the correction. We were down 7% but now we are only down 3%. Not bad!

Books to Read (Eventually) - Commentary
Future Value Worksheet - Commentary - Answer Key
Future Value Tables
Turn $33,000 into $7,000,000 in just 2 years! - Rates of Return - Commentary

Short-term Securities Investments
Examples - 1  2  3 - Video - Video (CC) - Audio
Interview with a Dyed-in-the-Wool CD Investor

Online Audio Lectures
Chapters 1, 3, Notes - Lecture 1 - Slides 1 to 14    Introduction: What is an Investment?
Chapters 1, 3, Notes - Lecture 2 - Slides 15 to 34    An Overview of the Investment Universe
Chapters 1, 3, Notes - Lecture 3 - Slides 35 to 54    Risk versus Return
     Liar's Poker Story - Slide 48    Are you a Speculator/Trader or are you an Investor?
     The Value Line on the Difference between Investing and Speculating/Trading
Chapters 1, 3, Notes - Lecture 4 - Slides 55 to 72    Short-term Investments

Online Audio/Video Lectures (Apple mobile users: Search "BUS123" in iTunes.)
Chapters 1, 3, Notes - Lecture 1 - Slides 1 to 14    Introduction: What is an Investment?
Chapters 1, 3, Notes - Lecture 2 - Slides 15 to 34    An Overview of the Investment Universe
Chapters 1, 3, Notes - Lecture 3 - Slides 35 to 54    Risk versus Return
     Liar's Poker Story -- Slide 48    Are you a Speculator/Trader or are you an Investor?
     The Value Line on the Difference between Investing and Speculating/Trading
Chapters 1, 3, Notes - Lecture 4 - Slides 55 to 72    Short-term Investments

Online Audio/Video Lectures on YouTube (Closed captioning available)
Chapters 1, 3, Notes - Lecture 1 - Slides 1 to 14    Introduction: What is an Investment?
Chapters 1, 3, Notes - Lecture 2 - Slides 15 to 34    An Overview of the Investment Universe
Chapters 1, 3, Notes - Lecture 3 - Slides 35 to 54    Risk versus Return
     Liar's Poker Story -- Slide 48    Are you a Speculator/Trader or are you an Investor?
     The Value Line on the Difference between Investing and Speculating/Trading
Chapters 1, 3, Notes - Lecture 4 - Slides 55 to 72    Short-term Investments

Online Audio/Video Lectures on 3CMediaSolutions (Excellent closed captioning available)
Chapters 1, 3, Notes - Lecture 1 - Slides 1 to 14    Introduction: What is an Investment?
Chapters 1, 3, Notes - Lecture 2 - Slides 15 to 34    An Overview of the Investment Universe
Chapters 1, 3, Notes - Lecture 3 - Slides 35 to 54    Risk versus Return
     Liar's Poker Story -- Slide 48    Are you a Speculator/Trader or are you an Investor?
     The Value Line on the Difference between Investing and Speculating/Trading
Chapters 1, 3, Notes - Lecture 4 - Slides 55 to 72    Short-term Investments

Face-to-Face Class Audio Lectures (BUS-123-01)
TueThur Lecture 1 Audio -- 30 Jan    Introduction: What is an Investment?
TueThur Lecture 2 Audio -- 1 Feb    An Overview of the Investment Universe and a Brief History of Risk and Return
TueThur Lecture 3 Audio -- 6 Feb    Short-term Investments; Sample Portfolio

Chapter 4:
Mutual Funds


Chapter 4 Materials
Presentation
Study Guide - Commentary
Assignment - Commentary
Mutual Fund Annual Report Assignment - Commentary  (See Annual Reports and Prospectuses below)
Thrift Savings Plan Assignment - Commentary
Mutual Fund Case Studies (not an assignment) - Commentary

Strategies for Navigating the 401(k) Jungle -- Tom Petruno, LA Times
Jack Bogle sticks it to the 401(k) world  And Senator Oral Hatch is not pleased...

Mutual Fund Types Scramble Sheet (Online lecture 3) - Commentary

A Sample Mutual Fund  (Online lecture 4 - Just one of over 11,000!)
ICA Prospectus: Full - Summary - Commentary
ICA: 84 Years of Investing -  Commentary: Video - Video (CC) - Audio
Top 75 Holdings of ICA -  Commentary
The Benefit of Time -  Commentary
Worst Day / Best Day -  Commentary

Hypothetical Illustrations  (Online Lecture 4)
$100 per month for 30 years
$100 per month for 40 years
$100 per month for 40 years - increase $10 each year
$500 per month for 20 years
   Commentary: Video - Video (CC) - Audio

Offerings of Sample Mutual Fund Companies Performance  (Online lecture 4)
Vanguard Funds Performance
American Funds Performance
Fidelity Funds    Only shows 310 or so of Fidelity's over 500 mutual funds.
Fidelity Funds and all the other funds that they offer through their web site    Over 11,000!
Dodge and Cox Funds Performance
T. Rowe Price Funds
Franklin Templeton Funds

Annual Reports and Prospectuses  (Online lecture 4 and Mutual Fund Annual Report Assignment)
Vanguard Funds
American Funds
Fidelity Funds
Dodge and Cox Funds
T. Rowe Price Funds
Franklin Templeton Funds  Choose fund and then find [Documents]

Top Ten Mutual Fund Companies by Assets  Investment News, John Waggoner, Sep 2017 - Careful: Different sources have different results

Mutual Fund Commentaries, Insights, and Perspectives
Vanguard Insights - John Bogle's Official Website - Obituary for Howard Schow
American Funds Investment Insights - Obituary for Jon B. Lovelace
Fidelity Funds Insights - Viewpoints - Ned Johnson on Wikipedia
Dodge and Cox Funds Video Perspectives Gallery - Insight Papers
T. Rowe Price Investing Insights - Biography of T. Rowe Price, Jr.
Franklin Templeton Funds Investing Commentary - John Templeton's Official Website

No Investment Is Perfect ...
Mutual Funds Far Outperform Mutual Fund Investors   Huh? That does not make any sense. But it is true! See last presentation.
A Cautionary Tale for Investors   An example of a mutual fund without proper oversight by the Board of Directors

Online Lectures
Chapter 4 - Lecture 1 - Slides 1 to 20    Introduction to Mutual Funds
Chapter 4 - Lecture 2 - Slides 21 to 40    Fees, Expenses, and Class Shares, Oh My!
Chapter 4 - Lecture 3 - Slides 41 to 61    Types of Mutual Funds (Scramble Sheet)
Chapter 4 - Lecture 4 - Slides 62 to 79    Fund Families and a Sample Mutual Fund

Online Audio/Video Lectures (Apple mobile users: Search "BUS123" in iTunes.)
Chapter 4 - Lecture 1 - Slides 1 to 20    Introduction to Mutual Funds
Chapter 4 - Lecture 2 - Slides 21 to 40    Fees, Expenses, and Class Shares, Oh My!
Chapter 4 - Lecture 3 - Slides 41 to 61    Types of Mutual Funds (Scramble Sheet)
Chapter 4 - Lecture 4 - Slides 62 to 79    Fund Families and a Sample Mutual Fund

Online Audio/Video Lectures on YouTube (Closed captioning available)
Chapter 4 - Lecture 1 - Slides 1 to 20    Introduction to Mutual Funds
Chapter 4 - Lecture 2 - Slides 21 to 40    Fees, Expenses, and Class Shares, Oh My!
Chapter 4 - Lecture 3 - Slides 41 to 61    Types of Mutual Funds (Scramble Sheet)
Chapter 4 - Lecture 4 - Slides 62 to 79    Fund Families and a Sample Mutual Fund

Online Audio/Video Lectures on 3CMediaSolutions (Excellent closed captioning available)
Chapter 4 - Lecture 1 - Slides 1 to 20    Introduction to Mutual Funds
Chapter 4 - Lecture 2 - Slides 21 to 40    Fees, Expenses, and Class Shares, Oh My!
Chapter 4 - Lecture 3 - Slides 41 to 61    Types of Mutual Funds (Scramble Sheet)
Chapter 4 - Lecture 4 - Slides 62 to 79    Fund Families and a Sample Mutual Fund

Face-to-Face Class Audio Lectures (BUS-123-01)
TueThur Lecture 1 Audio -- 8 Feb   Introduction to Mutual Funds, Mutual Fund Fees
TueThur Lecture 2 Audio -- 13 Feb   Continued Mutual Fund Fees, Start Types of Mutual Funds
TueThur Lecture 3 Audio -- 15 Feb   Finish Mutual Fund Types, Mutual Fund Case Study 1
TueThur Lecture 4 Audio -- 20 Feb   Mutual Fund Transactions and Information, Fund Families, A Sample Mutual Fund


Part 2: Stocks (a.k.a. Equities)

Chapter 5 and
  Lecture Notes:
Introduction to Stocks



Chapter 5 Materials
Presentation
Study Guide
Assignment
Stock Markets Assignment - Commentary
Earnings Call Assignment - Commentary
Market Simulation Handout (For face-to-face class)

Internet Finance Web Sites   (Assignments, Audio lecture 2)
Presentation: Video - Video (CC) - Audio
Google Finance   Breaking News! Google Finance rolls out new version. Still kinda' lame. But at least it works!
Yahoo Finance   Yahoo Finance was the best free finance site. Now it is unusable. What is going on at Yahoo?
   
E-mail to and response from the CEO of Verizon   Verizon is buying Yahoo. The CEO answered me personally!
   Users sound off about newly-destroyed Yahoo Finance site
Bloomberg Finance
Marketwatch  Wall Street Journal's free web site
CNBC
Investopedia  Pretty good website (even though it is owned by the same folks who own Tinder)
The New York Times Markets Overview

FINRA - Financial Industry Regulatory Authority
FINRA
FINRA Registered Representative Brochure
The new Securities Industry Essentials Exam
 Starts October 1, 2018
Solomon Securities Industry Essentials Exam Preparation  Just one of many exam prep companies (I don't get any kickback!)
The FINRA Investor Knowledge Quiz  Actually, you should wait until the end of the semester before taking this quiz!

Ancillary Presentations
Casas de Cambio - San Ysidro and Tijuana (Lecture 2) - Video - Video (CC) - Audio - Youtube
Eighty-Three Years Ago (Lecture 3) - Commentary - Results Don't Peek!

Stock Certificates
Disney - Allied Signal - Campbell Soup Company - Commentary

Stock Worksheets
Stocks Worksheet 1 - (Lecture 3) - Commentary - Answer Key
Stocks Worksheet 2 - (Lectures 4 and 5) - Commentary - Answer Key
Stocks Worksheet 3 - (Lecture 5) - Commentary - Answer Key

Dividend Reinvestments Plans (DRIPs)
Sempra Energy DRIP (Lecture 4) - Commentary

Penny Stock and Other Stock Scams
DPER -- From $0.006 To $0.06 In Just 9 Days! (Lecture 5) - Commentary   Psst. It is now at $0.0001
Yahoo! Advertisement for AwesomePennyStocks.com - Another: "Penny Stocks Made Me Rich!"
The same people who are doing the recommending to you are the same scam artists who are selling the bogus stocks to you!
They "pump" up the price and then "dump" all the shares! It is a very old scam.

AwesomePennyStocks.com shuts down after SEC/FBI probe  Sigh. These scams will never end as long as people are greedy and stupid.
Another web site that was shut down  And they spelled "receive" incorrectly! I before E except after C...
Two British Teens Ran "Stock-Picking Robot" Scam
Recent e-mail scam using PRFC   PRFC is a legitimate company on the OTC. They warned the investment community that they were being used by the penny stock scammers.
Recent Penny Stock Scams
DRMC: 25-Feb-2015 - 26-Feb-2015 -- Definitive Rest Manufacturing
   Formerly manufactured mattresses but now makes materials for aerospace industry. Uh, right...
STHC: 24-Feb-2015 - 25-Feb-2015 -- SouthCorp Capital
   Started June 2014 as a company refurbishing run-down homes but now is manufacturing cans and weight loss products. Okay...

IPO -- Initial Public Offering or It's Probably Overpriced?
It's Probably Overpriced!
Rigging the IPO Game

Keep a long-term perspective
History of Bear Markets - (Lecture 3) - Commentary
Don't Lose Perspective (Lecture 5) - Commentary
BGFN, The Benjamin Graham Financial Network! - Commentary
Books to Read about Stocks - Commentary (Same as Chapter 1)

High Frequency Trading (HFT)
FINRA High-Frequency Trading (HFT) Concerns
  But this guy says that HFT is good for us! Arrgh!
  Brad Katsuyama, the Hero of Flash Boys, begs to differ. "The system is rigged."   And he started IEX to level the playing the field
    Mr. Katsuyama's full speech   The link above is an excerpt
  SEC gives approval to IEX to become a stock exchange   Capital Group, parent company of The American Funds, and other large financial firms and pension funds backed IEX
How Robinhood makes money on $0 trades

Warren Buffett and Berkshire Hathaway
The History of Berkshire Hathaway Class B Shares

Online Audio Lectures
Chapter 5 - Lecture 1 - Slides 1 to 10     Introduction to Stocks - Historical Returns - Advantages and Disadvantages
Chapter 5 - Lecture 2 - Slides 11 to 33    The Stock Markets (a.k.a. The Capital Markets)
Chapter 5 - Lecture 3 - Slides 34 to 47    Stock Transactions, Transaction Costs, and Stock Quotes
Chapter 5 - Lecture 4 - Slides 48 to 60    Market Averages and Indexes; Volatility Reexamined
Chapter 5 - Lecture 4 - Slides 61 to 74    Stock Characteristics and Measurements
Chapter 5 - Lecture 6 - Slides 75 to 85    Types of Stocks, Growth versus Value, and Market Capitalization
Chapter 5 - Lecture 7 - Slides 86 to 93    Stock Investment Strategies

Online Audio/Video Lectures (Apple mobile users: Search "BUS123" College Finance" in iTunes.)
Chapter 5 - Lecture 1 - Slides 1 to 10     Introduction to Stocks - Historical Returns - Advantages and Disadvantages
Chapter 5 - Lecture 2 - Slides 11 to 33    The Stock Markets (a.k.a. The Capital Markets)
Chapter 5 - Lecture 3 - Slides 34 to 47   Stock Transactions, Transaction Costs, and Stock Quotes
Chapter 5 - Lecture 4 - Slides 48 to 60    Market Averages and Indexes; Volatility Reexamined
Chapter 5 - Lecture 5 - Slides 61 to 74   Stock Characteristics and Measurements
Chapter 5 - Lecture 6 - Slides 75 to 85    Types of Stocks, Growth versus Value, and Market Capitalization
Chapter 5 - Lecture 7 - Slides 86 to 93    Stock Investment Strategies

Online Audio/Video Lectures on YouTube (Closed captioning available)
Chapter 5 - Lecture 1 - Slides 1 to 10     Introduction to Stocks - Historical Returns - Advantages and Disadvantages
Chapter 5 - Lecture 2 - Slides 11 to 33    The Stock Markets (a.k.a. The Capital Markets)
Chapter 5 - Lecture 3 - Slides 34 to 47   Stock Transactions, Transaction Costs, and Stock Quotes
Chapter 5 - Lecture 4 - Slides 48 to 60    Market Averages and Indexes; Volatility Reexamined
Chapter 5 - Lecture 5 - Slides 61 to 74   Stock Characteristics and Measurements
Chapter 5 - Lecture 6 - Slides 75 to 85    Types of Stocks, Growth versus Value, and Market Capitalization
Chapter 5 - Lecture 7 - Slides 86 to 93    Stock Investment Strategies

Online Audio/Video Lectures on 3CMediaSolutions (Excellent closed captioning available)
Chapter 5 - Lecture 1 - Slides 1 to 10     Introduction to Stocks - Historical Returns - Advantages and Disadvantages
Chapter 5 - Lecture 2 - Slides 11 to 33    The Stock Markets (a.k.a. The Capital Markets)
Chapter 5 - Lecture 3 - Slides 34 to 61   Stock Transactions, Transaction Costs, and Stock Quotes
Chapter 5 - Lecture 4 - Slides 48 to 60    Market Averages and Indexes; Volatility Reexamined
Chapter 5 - Lecture 5 - Slides 61 to 74   Stock Characteristics and Measurements
Chapter 5 - Lecture 6 - Slides 75 to 85    Types of Stocks, Growth versus Value, and Market Capitalization
Chapter 5 - Lecture 7 - Slides 86 to 93    Stock Investment Strategies

Text Book

Here are links to sellers of the 7th, 6th, 5th, and 4th edition of the text book: "Fundamentals of Investments" by Jordan & Miller
The text book is available at the college book store as well as numerous other outlets.
The text book is usually also available across the street at Otay Books.
There are now web-based versions of text books available at www.coursesmart.com.
Except for the data being updated, there are not many differences between the 4th, 5th, 6th, and 7th editions.
Also, there are two copies in the main campus library on reserve. (You can read them there but they can not be checked out)
7th Edition -- This is the "official" book of the Spring 2018 class
Amazon: https://www.amazon.com/MP-Fundamentals-Investments-Stock-Trak-card/dp/0078115663/ref=sr_1_2?ie=UTF8&qid=1470412788&sr=8-2&keywords=fundamentals+of+investing+7th+edition+jordan
Half.com: 7th edition was not available on Half.com but may be available now
Chegg.com: http://www.chegg.com/textbooks/fundamentals-of-investments-7th-edition-9780077861636-0077861639?trackid=67a86a11&strackid=6c290340&ii=5
6th Edition -- Very similar to the current edition (but cheaper)
Amazon: http://www.amazon.com/Fundamentals-Investments-Stock-Trak-Mcgraw-Hill-Insurance/dp/0077457641/ref=dp_ob_title_bk
Half.com: http://product.half.ebay.com/Fundamentals-of-Investments-by-Bradford-D-Jordan-and-Thomas-Miller-2011-Hardcover/99510715&tg=info
Chegg.com: http://www.chegg.com/textbooks/fundamentals-of-investments-with-stock-trak-card-6th-edition-9780077457648-0077457641?trackid=YAJcVwrZ&ii=1&om_ss=1
5th Edition -- Very similar to the current edition (but even cheaper)
Amazon: http://www.amazon.com/Fundamentals-Investments-Stock-Trak-Mcgraw-Hill-Insurane/dp/0077283295/ref=sr_1_6?s=books&ie=UTF8&qid=1322833773&sr=1-6
Half.com: http://product.half.ebay.com/Fundamentals-of-Investments-by-Bradford-D-Jordan-and-Thomas-Miller-2008-Hardcover/66239818&tg=info
Chegg.com: http://www.chegg.com/textbooks/fundamentals-of-investments-w-sp-card-stock-trak-card-5th-edition-9780077283292-0077283295?trackid=5a730d99&autosuggest=1&uqry=9780077283292&ii=1
4th Edition -- Also very similar to the current edition (but even more cheaper)
Amazon: http://www.amazon.com/Fundamentals-Investments-McGraw-Hill-Finance-Insurance/dp/0073027219/ref=sr_11_1?ie=UTF8&qid=1199133503&sr=11-1
Half.com: http://product.half.ebay.com/_W0QQprZ51726165QQcpidZ1373341548

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