Financial Analysis
1. Investor Profile Mr. Avocado Willey is a 65 year old architect who sustained an injury at work. Since this occurred entirely due to negligence of safety procedures at work, he was able to successfully sue the company for compensation. He has been awarded an initial compensation of $8m, which is subject to a rise as the case is still ongoing. The seriousness of the injury meant that he is no longer able to continue working. He has already invested $3m in 5 Yr 0.85% US treasury bills for a fixed income of $25,000 in order to cover his living expenditures. Additionally, he has decided to invest remaining portion of the compensation in stocks ($5 million) to increase his wealth, as well as to benefit from regular dividend payments that will enable him to pursue his leisure interests. Mr. Jones has identified the technology sector as a potential investment opportunity since it offers an interesting mix of high growth firms and well established, stable companies. He appreciates the risks associated with investing in the technology sector, but having heard a lot about technology bubble in 1990’s, he wants a careful selection of stocks of growing but relatively well-established and stable companies. Hence, he is willing to take medium risk, and wants a combination of stocks which provide a good capital return and possibly a timely dividend as well. He is looking at the time horizon of 3 years for this investment, and considering the volatile nature of technology sector, he is willing to invest for further 2 years after reviewing his investment returns 3 years from now. Considering the circumstances due to which he sustained his injury, Mr Jones is also concerned about the ethical position of the companies. He wants to invest in companies which demonstrate good ethical values and show ethical responsibility to the stakeholders. This, however, does not mean that ethics override his requirement for returns. Also, Mr Warren suggested that corporate governance should be