Stock Market Intro
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*Contest opens February 21st, and ends
June 7th
*One winner from each class will be
chosen
Quiz on Friday Feb 15 - how to calculate
simple & compound interest
Bull Market
 When prices rise
by 20% or more
 Upswing of
market
 Ended in 2000
Bear Market
 When stock index drops 20% or more
 Recession/large downturn
What to look for in a stock
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Historical average return of 10% or more
Price/Earnings ratio vs projected return
Current news about the company
Trends in the stock value
Look at new highs & lows
Dividend history – dividends with steady increases
mean healthy cash flow
 Cash position – are there enough current assets to
cover current liabilities? If not, this could mean
trouble
Beta
 Beta is level of volatility or RISK of a stock
 1 = risk is equal to the stock market
 Greater than 1 is higher risk than the stock
market
 Less than 1 is lower risk than the stock market
 Keep in mind, more volatile stocks may go up
or down suddenly more often than less
volatile stocks
Stock market assignment:
Presentations are Tuesday Feb 19th
 Must be traded on the Nasdaq, NYSE, or TSX
EXAMPLE OF PRESENTATION (yours
must include 3 stocks)
Toyota Motor Company
Stock Ticker symbol: TM
 TM is traded on the NYSE
 Beta – 0.72
 As the beta is less than 1, this stock is a low risk
 P/E (price/earnings) Ratio: $33.31
 General Motors - $10.38
 Ford (F) – $2.96
 EPS (earnings per share): $3.09
 General Motors - $2.66
 Ford (F) - $4.41
Historical return (3 year)
 Based on prices at the end of each year
 2012 return: 42%
 (Dec 31 2012 $97.34 – Jan 2 2012 $68.51)/68.51
 2011 return: -20%
 (Jan 2 2012 $68.51 – Jan 3 2011 $82.46)/82.46
 2010 return: -3%
 (82.46 – Jan 4 2010 $85.76)/85.96
3 Month Performance
Recommendation: BUY
 Although, based on the P/E ratio, the TM stock is more expensive
than other car companies on the NYSE…
 The low beta indicates a low risk
 The Earning Per Share for this stock are much higher than other
respective car companies, so you will pay more for this stock
 The 3 month trend chart indicates an upward trend line
 Therefore I would recommend including some Toyota Motor
Company (TM) stocks in your portfolio in the short term, but due
to the low risk and high price, I predict it will not be a very high
RETURN on your investment
Notes for presentations
 Practice!
 Wear BUSINESS CASUAL ATTIRE!
 Nice jeans (no rips, dark wash) or dress pants
 Sweater or dress shirt & tie
 NO t-shirts, sweatpants, hoodies
 You may bring cue-cards or notes, but try not to read
directly off of the slide
 Use LESS WORDS and expand on your slide points
while talking
 Keep the presentations to 5 minutes or less
 Make eye contact with audience