Transcript of Welcome! October 11, 2010. Stock ownership Dollar Cost Averaging Diversification Choosing a...
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- Welcome! October 11, 2010
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- Stock ownership Dollar Cost Averaging Diversification Choosing
a broker
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- Stock Definition Dollar Cost Averaging Advantages and
Disadvantages Funds
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- Share of Stock: A security representing fractional ownership in
a firm and a claim on its net assets and earnings. Value of stock
changes with market Voting rights Do many things with stocks: Buy
(hold long positions) Sell Short selling (short position) Cover
short More on this later
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- An investment strategy where you put equal amounts of money
into an investment periodically Purchase more shares when prices
are low, and less shares when prices are high overall increase in
portfolio value
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- A collection of stocks, other equity and debt instruments Can
track a particular index (such as the Dow Jones or S&P 500)
Diversification Its the only free lunch
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- Guaranteed market rate of return Diversified Low expenses
Usually tax efficient Easy to build a portfolio based on your risk
tolerance Management Fee 2% or more per year Lower for ETFs
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- Higher minimums Better for small, frequent purchases Only
priced and traded at the close of the day Examples: Vanguard
Fidelity Blackrock Janus
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- Business Analysis Accounting Analysis Financial Analysis
Valuation Valueline
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- Procter & Gamble Competitive advantages? Brand names?
Ability to raise prices with inflation? Economic moat? Industry and
type of product? Consistency?
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- Do the firms accounting policies reflect the business reality
of the firm? If not, we must make adjustments More on accounting
analysis later. Yes, it needs its own week (or two)
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- Balance Sheet: A list of the things owned and owed by the firm
and the difference between the two Income Statement: A list of the
resources acquired and consumed by a firm over a period of time
Cash Flow Statement: A list of the flows of cash in and out of a
company over a period of time
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- Good starting point Usually a reliable source for objective
data aggregated in a consistent format Its generally a good idea to
ignore Value Lines predictions (or any analyst predictions for that
matter)
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- Accessible via OSU libraries and ccig.osu.edu.
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- Now that we know the basics of a company, how do we open an
account to trade? MANY options
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- Great for long term investors Active Trader Pro highly rated.
But you have to actually be an active trader Certain parts of the
website still update overnight rather than realtime
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- For functions you get (great for international) you dont pay as
much Professional and semiprofessional traders Workstation
difficult to handle Limited personal Service
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- Previous years winner (Barrons) Geared for very active traders
Deep historical database and many tool kits Over 500 fundamental
fields Big downside 99.95 per month access fee
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- Integrated charts with very fast trade executions over many
markets Many preset trading strategies for new- comers Trade from a
browser rather than software Smartphone trading platform fairly
robust.
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- My personal favorite, as well as Barrons Great customer support
Very innovative Zero downtime in 2008 Extensive, robust trading
platform Tons of tools watch live CNBC community Biggest drawback
acquired by TD Ameritrade. Yet to see any real detrimental
effect
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- $20 to become member Free pizza and pop every Monday Various
handouts throughout year Eligible: Attend CCIG events
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- Businesses coming to OSU Currently in contact Wall-St Training
Nov. 20/21 Chicago Visit Spring Quarter Most active members are
rewarded at EOY
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- Wall Street Journal (ITS FREE) CCIG Library: The Intelligent
Investor by Benjamin Graham The Dhando Investor by Mohnish Pabrai
Security Analysis by Benjamin Graham Common Stocks and Uncommon
Profits by Philip Fisher One Up on Wall Street by Peter Lynch
Monkey Business by John Rolfe When Genius Failed by Roger
Lowenstein Profits from the Peak by Brian Hicks
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- Discuss individual valuations of stocks How do you put a price
tag on an investment? Advanced: Options Hedging strategies Short
selling Discounted Cash Flow
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