Transcript GI Seminar Series Part 2

GI Beginners’ Series: Class II
November 15, 2007
Class I Review
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
Exponential Nature of Growth
Concept of a Stock
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Represents ownership
Investor: Access to dividends and future earnings
Company: Access to more capital
What Make Stocks Move
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Company-specific
General market-movers
Class I Review
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Market Structure
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Exchanges, Sectors, Industry Groups
Indices
Terminology
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Market Sentiment
Types of Positions
Stock Classifications
Supply-Demand Influence on Prices
Supply
140
120
100
80
Price
60
40
20
0
0
100
200
300
400
500
600
Quantity
700
800
900
1000
Supply-Demand Influence on Prices
Demand
140
120
100
80
Price
60
40
20
0
0
100
200
300
400
500
600
Quantity
700
800
900
1000
Supply-Demand Influence on Prices
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General Dynamic
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Supply increases or Demand decreases
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Supply decreases or Demand increases
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Price decreases
Price increases
Stock Dynamic
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More buyers than sellers
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Price increases
More sellers than buyers
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Price decreases
Buying/Selling Pressure
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Stock Price Increase
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Stock Price Decrease
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Buyer’s (Bull) Market
Implies optimism
Seller’s (Bear) Market
Implies pessimism
Strength of Increase or Decrease
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Day’s Volume vs. Average Daily Volume
Reading Stock Quote
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Why Bother
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Quick snapshot
Pertinent information without excessive research
Components
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Last Trade, Change, Bid, Ask
Open, Close
High, Low
Market Cap
Volume, Average Volume
Price-to-Earnings Ratio
How much, per $ of earnings, investors are
willing to pay for each share
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P/E Ratio
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Based on latest earnings report
Forward P/E Ratio
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Based on forecasted earnings
Price-to-Earnings Ratio
Implications
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Growth Stock
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Forward P/E > P/E
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High P/E Ratio
Lower earnings forecasted
Forward P/E < P/E
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Higher earnings forecasted
Reading Stock Quote
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Free websites:
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www.finance.yahoo.com
www.finance.google.com
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Game Name: G Investors
Password: investors
1. Go to http://simulator.investopedia.com/
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Any Questions, please LearnLink me
[email protected]
GI | Fantasy Stock Market Game

Rules


Start with $10,000
Game ends on May 30, 2008

Long-Short Only
No Options
Margins Allowed

Highest Percentage Gainer receives $$$


Class 3: November 29

Fundamental Analysis
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Market Forces
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GDP, Oil, Inflation
Beta
Executing Trades Online