According to the efficient market hypothesis, stock prices fully reflect all available information about a firm’s value, and individuals or mutual funds cannot consistently earn excess profits or outperform the market. But is this true? We will play a simple investment simulation to test this hypothesis.
In this weeks discussion, you are asked to recommend TWO stock you would like to hold throughout the semester to maximize your return. Based on your recommendations and the class discussions, I will select the top 15 most recommended stocks to form a class portfolio with a hypothetical $1,000,000 in week 4. We will use this portfolio to see if it can outperform the market.
You should act like a stock analyst for each stock recommendation to explain why investors should hold this stock. You are NOT required to write a whole-page research report to explain your reasons in detail, but you need to summarize some key aspects of why you picked this stock. For example, you can talk about a companys unique strategies, business model, new product development, customer satisfaction, etc., that you believe will drive up the stock price. Some data, such as P/E ratio, EPS, ROA, ROE, or technical analysis statistics, would help your classmates better understand the stock.
Please create a new thread with the company’s name as the topic for each stock you want to discuss/recommend. Present your points in a logical order. All thoughts, words, and ideas, not your own, must be referenced appropriately. You can cite magazines, newspapers, or book references to build stronger arguments.
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