The Stock
Market
Is it Gambling
or Something
More?
Clips from Wall Street
• “Greed is Good”
• http://www.youtube.com/watch?v=TlIt6yJVHU&feature=related
• http://www.dailymotion.com/video/xex9rz_gordon-gekkogreed-is-good-full-spe_shortfilms
• http://www.americanrhetoric.com/MovieSpeeches/moviespe
echwallstreet.html
Some Words To
Understand
• Earnings per Share: The amount of profit to which each share
is entitled.
• IPO: Short for Initial Public Offering.
• Market Cap: The amount of money you would have to pay if
you bought ever share of stock in a company.
• Share: A share represents an investor's ownership in a
"share" of the profits, losses, and assets of a company.
• Ticker Symbol: A short group of letters that represents a
particular stock (e.g., "Coca Cola" is referred to as "KO".)
When you think of the Stock
Market you tend to fall into one
of two places
• Know that
• Believe that
they should
it is a form
invest for the
of gambling
long run, but
don’t know
• Think that if
where to begin
you invest
• Feel like
you are
investing is
bound to
some form of
lose money
black magic
• Why would
• Investment is
along the lines
they think
of blind faith
that?
Why do Companies
Issue Stock?
• Raising money to expand
– Two Options What are they?
Some More Vocab
• Bear Market: Slang for when the stock market is in a general,
prolonged period of falling stock prices.
• Bull Market: Slang for when the stock market is in a general,
prolonged period of rising stock prices.
• Dividend: A dividend is a portion of a company's earnings
that is paid out to shareholders on a quarterly or annual
basis.
• Exchange: An exchange is a place in which options, futures,
and shares in stocks, bonds, indexes, and commodities are
traded.
And a few more…
• Index: An index is a benchmark which is used as a
reference marker to which financial performance is
measured and compared against.
• Institution: A word used to describe any company,
brokerage house, or entity that is not an individual.
• Sector: A group of stocks that are in the same business
• Volume: The number of shares of stock traded during a
particular time period.
4 Reasons Prices
Fluctuate
• The 4 most common things that cause these priceswings. (In other words, we are answering the question
• "Why do the stocks of good businesses sometimes sell
below or above their intrinsic value?)
• 1.) The investor vs. the speculator
• 2.) The commodity nature of stocks
• 3.) Life (it sounds general, but it will make more sense
later)
• 4.) Temporary Problems
Let’s Take A Look At
Some Stocks
Two Sites You might Want to
CheCk out…
• http://www.google.com/finance
• http://money.cnn.com/data/markets/