10 Uncommon Values (R): Optimizing the Stock-Selection Process Harvard Case Solution & Analysis

In 2003, Steve Hash, research director at Lehman Brothers, are ready to initiate a firm "Ten Uncommon Values" stock-picking process within a year. Investment Committee had to choose the top 10 shares of stock of about 100 ideas submitted analyst firm. Performance shares selected for Ten Uncommon value has historically been strong - investment strategy recommended buy shares and hold them for one year would have exceeded S & P 500 for 39 of the last 54 years. However, during the past three years - 2000 to 2002 - the recommendations have been implemented poorly creating average return -22.5% vs. -11.7% for the S & P 500. Hash thought for a few questions: What was the importance of ten Uncommon values ​​for Lehman Brothers and its clients? How much time and effort should be put into the firm selection process shares to the report? How many people should be in the Investment Policy Committee, and who should be selected What should the selection process be? If analysts whose shares have been selected to be compensated for their picks? Finally, they should continue the process? Teaching Purpose: To use both qualitative and quantitative data, to enable students to discuss a range of issues: the optimal process of stock selection, the optimal size of the commission, how much time to spend with each analyst, private or public voting shares by members of the Committee, the decision-making authority and whether the incentives play an important role in this process. "Hide
by Boris Groysberg, Paul M. Healy Source: Harvard Business School 17 pages. Publication Date: November 3, 2004. Prod. #: 405022-PDF- ENG

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10 Uncommon Values (R): Optimizing the Stock-Selection Process

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