Investment Challenge Program

1. Investment Challenge Program November 2002, Volume III, Issue 10 Investors, The Consumer Confidence Index… Welcome back! Those of us at TVA would like to express our thanks to everyone who attended and participated in the Fall Conference and Job Fair. This year was another great success for the program. Because we are nearing the end of the year…and the end of the awards period, we will not be including individual university returns in the newsletter for the remainder of the year. This helps to keep potential award winners a surprise until the Spring Investment Challenge Conference and Job Fair. Important Announcements… The Nuclear Decommissioning Trust Board has decided to increase the Investment Challenge Program’s funding as a result of our outstanding performance as compared to the benchmark. Each university will receive additional funds, which will be available for investment around the beginning of next year. Along with the additional money, six new universities will be joining the program. The new universities are set to join us around the first of the year. We are very excited about both of these announcements, as they show our program is doing extremely well. We would like to extend our appreciation to the students and professors who make this program the success it is. By now, you have probably all heard that during October the Consumer Confidence Index (CCI) reached its lowest level since November of 1993. However, you might be wondering how this will affect the market over the next few months. The chart above shows the Consumer Confidence levels from January through October 2002. This number is based on information gathered from 5,000 households regarding the purchase of large-ticket items and consumers’ short-term plans. The highest level of consumer confidence this year came during March, when the CCI reached 110.7. Since then, we have seen an almost steady decline in numbers. Economists believe that the index’s decline is largely due to concerns over war, a poor stock market, and a high unemployment rate. This, compounded with an expectedly poor holiday shopping season, really makes the near future look grim, at least according to 5000 households. Previous CCI’s over the same time period suggest that this number is not consistently reliable, though, because consumers do not exactly change their spending habits to comply with what they tell pollsters. One of the biggest concerns over October’s CCI is that it probably played a role in the Federal Open Market Committee’s decision to lower target rates to 1.25%, which the United States has not seen in over 41 years. Website of the Month: Business Week’s website, www.businessweek.com, is an excellent resource for all types of informative articles pertaining to business. The best part is that most of this information is free and you need not even register with the site to use it. Quote of the Month: “The only way to keep a good reputation is to continuously earn it.” -Brian Koslow