How to Prepare

Valuation

The team uses a variety of valuation methods, including intrinsic and relative valuation. With the discounted cash flow model, commonly used in value investing, the team arrives at a valuation by projecting a company's future cash flows and discounting them by the weighted average cost of capital. The team requires a strong margin of safety on all investments it considers. Although a DCF is a technical model, it is only as good as the assumptions made, which is why it is critical to have a deep understanding of the company and the market in which it competes.

Keeping Up

We recommend to all interested applicants to keep up to date with major news sources so that they have a solid fundamental understanding of why certain market trends occur and how specific events have implications on different perspectives on different sectors. These include but are not limited to: The Wall Street Journal, The Economist, Financial Times, CNN, Morning Brew...etc. Additionally, prospective applicants are encouraged to explore evaluating companies on their own; Bloomberg Terminal (access through JHU libraries) and morning newsletters (e.g. Seeking Alpha, Cents, etc.) are great places to start. Ideal applicants have a basic understanding of value investing, the characteristics of a good investment opportunity, and valuation techniques.

Recommended Books

Margin of Safety, Seth Klarman

The Intelligent Investor, Benjamin Graham 

Capital Ideas Evolving, Peter L. Bernstein

Fooled by Randomness, Nassim Nicholas Taleb 

The Black Swan, Nassim Nicholas Taleb