Morgan Stanley Wealth Management Superday
what does ETF stand for
"exchange-traded funds" are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index (Ex: S&P 500)
what is considered a good or bad P/E ratio
- below 10x (bargain or struggling company) -10x-20x fair valuation for most mature companies -20x-30x growth stock with strong earnigns potneital above 30x: high-growht or overvalued
how should i invest a million dollar (according to jack)
- first, I think its really important to go through a discovery process of understanding hte client's entire profil of risk tolerance, long term goals, and time horizon - this would allow me to craft an asset allocation that would achieve the client's goal -since there has been a lot of volatility in the market, for the equity portion of their portfolio we would employ dollar cost averaging instead of dumping everything in immediately - this is a safer approach given all of the volatility
pitch a stock
- for a client's portfolio, it would be essential to first review their risk tolerance and goals - I am very interested in the opportunity that nuclear power has to power data center and meet the increased energy demand - Constellation Energy Corporation (CEG) is an 82 billion dollar energy solution company. Constellation owns 23 of the 54 US nuclear energy plants as well as having strategic partnerships with major tech giants including microsoft. -Largest clean energy provider in the U.S., producing ~10% of the nation's electricity and 20% of its nuclear power. -current market cap: 78.38B -forward P/E ratio: 27.10: reasonable valuation for a high-growth energy company with strong earnings visibility -EV/EBITDA: 11.92 - solar/wind peers at 14-15x making CEG a cheaper clean energy alternative
why finance?
-Dynamic & Challenging Environment - I am drawn to finance because of its ever-changing nature and the challenge of navigating market fluctuations. -Analytical & Strategic Thinking - I enjoy analyzing trends, making strategic investment decisions, and adapting to uncertainty. - Client-relationship based (particularly referring to wealth management)
Describe a recent acquisition for Morgan Stanley
-E-trade acquisition in late 2020 - this acquisition clarified long term strategies -customers will build up wealth over time and need the help of a financial advisor (so will turn to Morgan Stanley --spent $13b to help serve more "mom and pop investors" - gorman -Eaton van acquisition in 2020/2021 - this acquisition doubled Morgan Stanley's assets under management (AUM) and diverse set of investment strategies
What are some general facts/interesting facts about Morgan Stanley's 2024 Annual Report
-Net revenues of $61.8 billion for the year -Fourth-quarter revenues reaching $16.2 billion, marking a post-2008 financial crisis high -Wealth management: 13% increase in revenues, 21% growth in client assets -Investment banking revenues surged by 35%, totaling 6.7 billion -WM accounted for 46% of MS total net revenues in 2024
describe DCF analysis
-estimates the intrinsic value of a stock by projecting future free cash flows (FCC) and discounting them to the present value -accounts to intrinsic value but is sensitive ot discount rate and assumptions
What happens to the value of bonds if interest rates drop/if they rise?
-if interest rates increase, value of bonds drop -if interest rates decrease, value of bonds rise
different types of portfolios based on risk tolerance
-risky: 70% equities, 20% bonds, and 10% other assets like gold or alternative -moderate portfolio: 40% equities, 40-50% bonds, and 10-20% in gold or oil -risk adverse: 30% equities, 60% bonds, and 10% tangible assets
Talk about morgan stanley diveristy
-strong female presence: Lisa Shalett, CIO of Wealth Management at Morgan Stanley, who also attended Brown University. im impressed by the 5 women on MS board of directors
what are morgan stanley's core values?
1. Do the Right Thing 2. Put Clients First 3. Lead with Exceptional Ideas 4. Commit to Diversity and Inclusion 5. Give Back
what are the three parts of morgan stanleys business
1. wealth management 2. asset management 3. ISG (banking and trading)
what is the current 10-year treasury yield vs FFR
10-year treasury yield: 4.22% FFR: targeted between 4.25% and 4.50%
Q: Talk about a time you failed.
Alaska trail story
influential morgan stanley IPOs
Apple in 1980, Facebook (now Meta) in 2012, General Motors
what does AUM stand for?
Assets Under Management
Would you rather have a dollar today or a dollar tomorrow?
Dollar today → money depreciates because of the TVM Time Value of Money (TVM)- a dollar today is worth more than a dollar in the future due to its earning potential. This is because money can be invested and earn interest or returns over time
what is enterprise value
Enterprise value is the value of a firm as whole to both debt and equity holders. To calculate EV in its simplest form you take the market value of equity (market cap) + debt + preferred stock + minority interests - cash currently held
What's going on with oil prices?
February 28, 2025, oil prices are experiencing a downward trend, heading for their first monthly decline since November 2024. This movement is influenced by several key factors: - economic uncertainty and tariff concerns -geopolitical tensions TARIFFS GO INTO AFFECT ON TUESDAY, SHOULD BE INTERESTING TO SEE HOW THIS AFFECTS THE MARKET
What equities do well in a rising interest rate environment?
Financial institutions: Rising interest rates increase Treasury yields, so banks can earn more on their investments. If banks don't increase savings rates as quickly, their profit margins expand. This is why financial institutions (banks, insurance companies) often benefit when rates rise. Examples: Bank of America, JPMorgan Chase, Morgan Stanley, GS, etc increasing what they earn on loans & investments while delaying increases in savings rates. Industrials, consumer names, and retailers can also outperform when the economy improves and interest rates move higher. Costco, Kohls, Walmart, etc.
If a client came to you with $1 million, how would you invest it?
Firstly, I would consider the significant amount of volatility with a new administration stepping into office. Best thing we can do is make sure that clients are well-diversified to protect against volatility. -Review my clients risk tolerance, age, and time horizon
where do we expect interest rates to go?
heading into 2025, we were expectedc to ge4t 2 interest rate cuts for 25 basis points each -now we are just expected to get 1 interest rate cut for 25 basis points - we would factor in the inflation rate, employment numbers, and geopolitical conditions
what does a high or low P/E ratio meaning
high: growth expectations are high, could signal that a stock is overvalued low: may be underpricing the company
what does the 10-year treasury yield represent
it is a benchmark for long-term interest rates
what are the different ways to calculate stock valuation
p/e ratio DCF market cap (capitalization) dividend discount model
what does EV/EBITDA measure
profitability metric for a company enterprise value/earnings before interest taxes, depreciation, and amortization
what is the 10-year treasury yield
represents the annual return an investor earns if they buy a U.S. 10 year treasury bond and hold it until maturity
what is dollar cost averaging
spreading out the investing, investing over time ex: if someone has 100,000 dollars that they want to be in equities, we would deploy 10,000 over 10 months instead of dumping the 100,000 in the equities immediatel
market capitalization
stock price x shares outstanding - used to compare companies based on size -but it doesn't indicate if a stock if over or under valued
describe the p/e ratio
stock price/ eps (earnings per share) - measures how much investors are willing to pay for each dollar of a company's earnings
what is a yield
the annual return of an investment
what is the yield curve for bonds?
the relationship between yields to maturity and time to maturity for a number of bonds.
dividend discount model
values a stock based on the present value of expected future dividends - best for dividend-paying stocks
explain the difference between asset management and wealth management
wealth management is a wholistic approach to managing an individual's or family's financial life asset management is managing investment portfolios to maximize returns based on risk tolerance and financial goals
who is the CEO of morgan stanley and when did this switch in leadership occur?
CEO is Ted Pick Became CEO on January 1, 2024
EBITDA
a computation of a firm's earnings before interest, taxes, depreciation, and amortization are deducted
Tell me how you apply your analytical skills to your coursework.
I apply my analytical skills extensively in my Financial Accounting class, where I work with financial statements, valuation metrics, and ratio analysis to evaluate a company's financial health and performance. One key project required me to analyze a public company's 10-K filing, dissecting its income statement, balance sheet, and cash flow statement to assess profitability, liquidity, and leverage. The company I analyzed was IBM, international business machines corporation. Using Excel, I conducted trend analysis on key financial ratios to identify strengths and potential risks in the company's financial structure.
What is a trend that you've been following in the market
answer 1: One of the most fascinating trends in the financial markets recently has been the massive explosion of AI-related investments and how it has driven overall market performance. A prime example is Nvidia, whose dominance in AI chips has significantly impacted the S&P 500's growth over the past year. (DeepSeek, a rising AI company that is positioning itself as a potential disruptor in the space) In a recent analysis, Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, observed that the recent decline in Big Tech stocks presents a unique opportunity for selective stock-picking. As major technology companies experience a pullback, discerning investors can identify undervalued stocks with strong fundamentals. Shalett emphasizes the importance of focusing on companies that demonstrate resilience and potential for growth despite broader market volatility. This approach requires careful analysis to navigate the current market landscape effectively. - #2: politics: impact of President Donald Trump's recent tariff policies on global trade and financial markets. In early February 2025, the administration announced a 25% tariff on imports from Canada and Mexico, alongside a 10% tariff on Chinese goods, effective March 4. whitehouse.gov These tariffs have introduced considerable uncertainty into the markets. Historically, such trade tensions have led to increased volatility; for instance, during Trump's previous term, the S&P 500 experienced a cumulative 5% decline on days when new tariffs were announced
describe Eaton Vance
asset manager
what part of morgan stanleys business did the eaton vance acquisition help with
bolstered asset management
what was the significance of Morgan Stanley's E-trade acquisition
created a pipeline to funnel future investors to morgan stanely's financial advisors -to get market share of the people who are early on in their investment journey where they don't need the help of a financial advisor quite yet
What sets morgan stanley apart from its competitors?/why morgan stanley?
I am extremely interested in working at Morgan Stanley because they are at the forefront of wealth management. Morgan Stanley's acquisitions of both Eaton Vance and E*trade have proven to be very successful in the asset management and self directed brokerage spaces. These acquisitions clarify long term strategies... For example with E-Trade: Customers will build up wealth over time and will need the help of a financial advisor Morgan Stanely will have access to individuals through E-trade refer them to financial advisors at Morgan Stanley The firm is entering an exciting chapter under new CEO Ted Pick, following strong Q4 earnings and positive market responses. I see a strong future under his leadership and want to be part of it. I also admire Morgan Stanley's diverse and inclusive environment, particularly its strong female presence. I can see myself in influential female leaders such as Lisa Shalett, CIO of Wealth Management at Morgan Stanley, who also attended Brown University. Finally, I recently read about Morgan Stanley's Biodiversity IQ tool, which can help institutional investors assess risks and opportunities related to nature. I appreciate Morgan Stanley's dedication to innovative approaches to investment.
Why Morgan Stanley phrased into way jack told me
I think Morgan Stnaley has positioned intself very well under the leadership of James Gorman with the acquisitions of Eaton Vance and E-Trade and the street has responded very well to the transition and leadership of Ted Pick. I am really excited to see where things go from here, and I want to be a part of that.
why wealth management?
I want to work in wealth management because it is a relationship-driven business. This aspect sets wealth management apart from other jobs in finance, such as investment banking. I'm passionate about helping people achieve their financial goals, and the field offers the perfect blend of finance, strategic problem-solving, and relationship-building. My analytical skills, developed as an ESG analyst for Brown University's Socially Responsible Investment Fund, have prepared me to evaluate market opportunities and risks effectively. Managing over $250,000 in assets, I've researched and pitched companies like Nextracker in the energy sector, gaining hands-on experience in investment analysis and decision-making. Beyond technical skills, I value the human side of wealth management—helping clients navigate market changes and adjust strategies for security and growth. My leadership role in Brown's Women in Business, where I chair the Internal Mentorship Committee, has also strengthened my ability to guide and support others.
considering different types of portfolios, how would I invest 1 million right now?
I would probably choose the moderate porfolio based on the new administration and the uncertainty so--- 40% equities, 50% bonds, and 10% gold or oil
what is the normal relationship shown by the yield curve for bonds?
Long-term bonds have higher yields than short-term bonds -upward sloping curve
How do you stay up to date with the news?
Newsletters: CB insights, Financial Advisor News, Matt Levine at Bloomberg Linked In: through following Morgan Stanley I recently read their Trends in the Market: In 2025, deglobalization, AI, longevity and the future of energy could take center stage - forces we see driving lasting growth in an ever-changing world. I also learned about their Biodiversity IQ tool. Pursuing one-off articles Podcasts while I work out such as thoughts on the market by MS
How many salads does the Just Salad by 1585 sell each day? Walk me through your logic.
Once I determine the number of office buildings, guessing a few thousand people working in each of those. So, if 5-10,000 people worked in each of those high rise buildings, probably 50% would bring lunch from home. The other 50% would look to nearby restaurants such as Just Salad. Of this 50%, let's say around 15% of them would choose Just salad. Besides consumers from office buildings, a building in the heart of times square, simple foot traffic. If another 20,000 people are walking by the building probably 10% of them might stop in I think this portion of people are showing up to store but an additional 40-50% of sales that could happen with delivery An additional point to consider is that nowadays, people are increasingly choosing healthier food options. Therefore, Just Salads would be picked over less healthy chains such as Chipotle.
how does a wealth management firm make money?
Wealth management primarily generates revenue through an advisory fee on client assets, which is a percentage of assets under management (AUM) that clients are charged on a recurring basis, typically monthly or quarterly. -lending, where clients take out mortgages, securities-backed loans, or lines of credit using their investment portfolios as collateral. These loans generate interest income for the firm while providing liquidity solutions for clients.
