These are projects posted by the students of Dr. Gove Allen at Brigham Young University. These students have taken one semester-long course on VBA and generally have had no prior programming experience

Thursday, December 10, 2009

VBA Project Pope Weston

For years, individuals have tried to beat the markets. Warren Buffet and others are illustrations of success. Many others, usually less known, are not so fortunate. Today many firms and individuals still pursue analysis and investment in the market. Despite a zero sum game, there is plentiful evidence, even from academics, which suggests the market can consistently be beat. Value investing, according to Fama and French, has long-term results of beating the market.

In particular, investment bankers commonly have analysts who identify value stocks by performing a fundamental analysis. That is, the analyst will value individual stocks by forecasting future cash flows based on historical financial statements and a number of assumptions. The quick and dirty ratio comparison method is more commonly used but much less reliable.

My project is an investment industry standard future cash flow model, which uploads historical data and performs analysis of any stock with a ticker symbol by the press of a button. Of course, this only gets an analyst into the right ballpark. The analyst must then manually review the model and change some automated assumptions that do not match future expections. Such assumptions include: gorss margin, market risk premium, market growth rate, and dividend yields. Other qualitative factors may be considered as well. Nonetheless, the majority of the work is already completed and an analyst can quickly file their report.

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