Stock Market Game Paper

Stock Market Game – Assignment 1 A recent mutual fund that my team had purchased is ProFunds UltraShort Latin America Inv (UFPIX), with a total of 10 shares. This is a bear market mutual fund meaning UFPIX invest in short positions and derivatives daily in order to profit from stocks that drop in price. Their goal is to outperform the market through having portfolios with extensive holdings in short; Meaning their returns generally move in the opposite direction of the benchmark index. We made the decision to invest into this mutual fund because the fees for UFPIX are low compared to other funds in the same category (Dedicated Short-Bias Funds). We also reviewed their investment policy which stated that the fund seeks daily investment results,

The fund seeks to invest 80% of its assets to financial instruments with economic characteristics. We believed that the finance and economic industries are constantly fluctuating in the market, especially in the oil industries at this time. Thus, UFPIX is a good decision if we want to gain capital. However, we did not purchase this share at their optimum low point, meaning there was a possibility for our fund to decrease in value resulting in a loss. However, we do not regret in investing in the fund because we also reviewed their past fund return percentages and they seem to be constantly increasing over the years. Over the past 5 years, the fund has returned 11.42%, over the past 3 years, 31.35%, and over the last year, the fund has returned 124.88%. With the fluctuating market over the past couple of days, we believe that the returns of UFPIX will gradually

(CMG). With a purchase of 50 shares at a net cost of $36,190.83, we highly regret out decision. The stocks had plummeted and we lost $100 per share. The major influence for the devaluation of the stocks resulted when an issue arose in Chipotle’s supply chain. According to the Wall Street Journal, They had to fire one of their suppliers after it failed the company audit. Due to this the burrito giant stopped serving pork at over a third of its restaurants. The disappearance of Carnitas and pork options in restaurants caused Chipotle to lose many of their customers. Suppliers are becoming increasingly more important in a restaurant chain’s cycle as it scales operations especially in today’s slow-growth environment, thus, CMG was heavily impacted by this downfall. Furthermore, another factor that caused CMG’s stocks to fall was from the series of CMG stores failing to meet sale requirements. According to an article from Investopedia, the company reported the first quarter sales growth of 10.4%, and the following quarter of 4.3%. They are not looking well for the next quarter either. They have many strong competitors such as McDonalds, and as of now, they have more competitors than ever before. The Chipotle stock has a P/E ratio of 43.52, the highest among its competitors. We believed this was a reflection that CMG was a growth stock, however, the overall market conditions and increased competition from incumbents