September 27, 2010 - Group 3: Aaron Andra, Casey Lytle, Erina Mckinney, Alex Vezendan

Tyshawn Taylor, the APM basketball scholarship recipient, briefly stopped by APM class on September 27 to thank the class and talk about the life of a Kansas basketball player. Tyshawn answered questions from the class, and proposed an interesting investment idea for the portfolio.

Tyshawn explained to us about commencement of the team's "hell week." He felt like he was in the best condition going into the first week of practice. He told us about the 5:30 AM practices, the gruesome conditioning sessions and tough weight sessions all while attending classes and  majoring in American Studies. Tyshawn's goal is graduate and play basketball for as long as he can.

Before Tyshawn left for his studies, he presented a one page report on why the class should consider Adidas, the school's athletic sponsor, as a potential buying opportunity for the portfolio.

Just as Tyshawn runs the team on the court, Coach Barry Hinson is the director of Men's Basketball Operations. He manages all of the logistics for the team off the court. Coach Hinson gave us the inside scoop on what it takes to organize a top tier division 1 program.   He shared some of the logistical difficulties of coordinating team travel and accommodations. One of the most difficult circumstances occurred when the team was traveling home from the University of Arizona after a game during winter break a couple years back. "The weather was so bad in Kansas, they shut down Forbes Field. This forced me at the last second to try and rebook 40 people, and connect all the players to additional flights so they could visit their family during the holidays." He makes it work, though, and through the use of a military-like itinerary detailing every facet of travel Coach Hinson has been able to improve the team's logistics and reduce travel time so they can focus on winning.

August 30th, 2010 - Group 2: James Coder, Tyler Enders, and Jeff Sweeten

Jim Schier and Frank Whitsell from Security Global Investors (SGI) in Topeka visited the APM class to discuss value investing.   Schier has managed the Rydex SGI Mid Cap Fund since its inception in 1997. He explained the art of discovering undervalued companies.  Self-described as seeing the world through bell-curves, Shier stressed the importance of numbers while simultaneously cautioning that's only half of the story. 

Some of Schier's investment considerations include: a focus on a company's operating risk, holding for the long-term, and finding competitive advantages in inefficient segments of the market.  Schier wants to focus on the long term. The average holding period is two and a half years,allowing more time to "get it right".   

Frank Whitsell, a research analyst for consumer staples and consumer discretionary companies, discussed the impact of emotions in investing. He said it's important to distance yourself emotionally from an investment. He explained that an emotion-driven portfolio manager unable to remain calm during downswings, tends to invest too defensively.  Whitsell also stressed the importance of looking at how things stand today. Forget about any current gains or losses. It's the future that matters in investing.

Whitsell also discussed Pinnacle Entertainment Inc. (PNK).  Contrary to the APM class consensus, Whitsell seemed optimistic about Pinnacles' growth opportunities and was relatively unconcerned about the market and business risks that worried the class.  While he had not reached a buy/sell decision on the company, research to-date showed Pinnacle to be undervalued due to expanding margins and strategic acquisitions.  

Whitsell saw potential catalysts in PNK's future that could help to close the valuation gap between PNK and its peers. These catalysts included the realization of revenue growth from new property expansions, and margin expansion due to management's cost cutting and efficiency maximizing initiatives. Whitsell felt that even if these catalysts turned out to be less successful than desired, it would be easy for management to realize enough benefits to improve PNK's valuation versus peers.

	Q3 2010	TTM	YTD	3 Year
SP500	10.7	8.0	2.3	-25.3
SP600	9.3	13.0	7.8	-15.3
NASDAQ	12.3	11.6	4.4	-12.3
APM	7.9	7.6	-5.3	-24.4

APM has underperformed the market over the year. However, we have had some good performers over the last quarter, TravelCenters of America (TA) was up 49% over the quarter, Joy Global (JOYG) was up 41% and Ryanair (RYAAY) was up 22%. Thanks to mentors Derek Smashey, Ryan Peschka and Bob McAdoo for the initial recommendations.

The laggards were CDC Corp (CHINA) and Net 1 Ueps Technologies Inc (UEPS), down 32 and 13 percent respectively.

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APM 2010 year-to-date and 3rd quarter income statement

	Q3 2010	YTD 2010
Income
Dividends	4,677	11,228
Interest	3	447
Total Income	4,680	11,675
Realized Gain [Loss] on Investments
Proceeds from Secuties Sold	28,597	238,313
Cost of Securities Sold	24,678	226,971
Net Realized Gain on Investments	3,918	11,342
Beginning Portfolio Value	894,338	984,587
Income	4,680	11,675
	899,017	996,262
Realized Gain [Loss]	3,918	11,342
Unrealized Gain [Loss]	64,116	-36,864
Ending Portfolio Value	967,051	970,740
Expenses	1,816	5,504
Portfolio Value (After Expenses)	965,236	965,236