On April 3rd, the Student Investment Fund had the honor to host David A Katz (Union Class of ‘84), President and Chief Investment Officer of Matrix Asset Advisor, a firm David co-founded in 1986. David has an MBA from NYU, is a CFA charter holder, and appears frequently as a guest on CNBC (e.g. here and here). This was a standing-room-only event and a fantastic start to a new term.

Matrix Strategy

Matrix is a value investor who looks for companies that are out of favor and where a catalyst might bring the stock price back to its intrinsic value. At Matrix, qualitative and quantitative proprietary models are employed to help identify stocks that fit within Matrix’s investments parameters. David emphasized the importance of looking at a company’s balance sheet and earnings calls. Doing this will improve knowledge of a company’s business model, management team and potentially answer any questions or concerns we might have before making an investment decision. Also, David mentioned that at Matrix, he refrains from maintaining positions that result in a higher than 8% exposure to a single stock as a way to reduce volatility and overall risk.

SIF Analysis

David commented on SIF’s strong performance driven by our exposure to growth stocks. He cautioned against letting our exposure to some of the winners grow. “If you started your portfolio today, would you want a 12-13% exposure to Amazon?” This question might help us students decide when to sell a stock or when to rebalance our portfolio. Additionally, having a time frame in mind for our investments can better assist us in identifying exit points or when to cash in some profits. With regards to our 15% cash position, Katz pointed out that in the long-run cash is a drag on performance, but cautioned against jumping into the market all at once after a phenomenal year for stocks.

by Icaro De Meira Lins