Investment Strategies

This course provides a comprehensive introduction to modern investment analysis, integrating two distinct yet complementary approaches: fundamental value investing and quantitative investment strategies. The first half focuses on value investing, emphasizing the economic analysis and valuation of a firm's business operations to estimate its fundamental value. Students will learn to assess competitive advantages and barriers to entry, apply valuation frameworks beyond standard DCF models, and manage risk in concentrated portfolios. The methodology is grounded in identifying a 'margin of safety' by investing when a company's market value is significantly below its intrinsic worth.

The second half shifts to quantitative investment strategies, exploring the tools and techniques used in an environment of continuous financial innovation. Topics include hedging and risk management, single- and multi-period portfolio optimization, the use of factor models and Principal Component Analysis (PCA) for investment decisions, and the construction of systematic and volatility-based strategies. A hands-on approach is used to highlight the applications and limitations of these quantitative methods. Upon completion, students will have a rich and coherent view of investing that combines a sound understanding of business economics with robust quantitative and risk management techniques.