A boiler room is a bank of telephones, usually set up by a broker, from which salespeople make calls to potential investors and pressure them to buy stocks. This is generally considered an unethical practice.
Archive for the ‘Grow Page’ Category
A Boiler Room is…
Thursday, August 20th, 2009A Weighted Average is…
Thursday, August 20th, 2009A weighted average is an average (or mean) in which each factor is multiplied by a number that reflects its importance. For example, imagine you have 20 shares of Company A that are each worth $10, and 30 shares of Company B that are each worth $5. When you want to find out the average price of each of your shares, you would multiply the number of A shares you own (20) by their value ($10) (=$200), then do the same for Company B (30 × $5 = $150). Add these two values together ($200 + $150 = $350), and divide by the total number of shares (20 + 30 = 50). Your weighted average, then is $350 ÷ 50, or $7.
Wall Street is…
Thursday, August 20th, 2009Wall Street is literally a street in New York City where the New York Stock Exchange and many major financial institutions are located. The term “Wall Street” is often used to refer to the investment community in general.
Spot Price is…
Thursday, August 20th, 2009The spot price is the current market price of an actual physical commodity. Sometimes this is also called the cash price. The spot price is traded on the spot market, where goods are sold for cash and delivered immediately. So, if you buy a barrel of oil on the spot market for $60, then you will receive the actual barrel of oil as soon as possible.
A Strategic Buyout is…
Thursday, August 20th, 2009A strategic buyout is the purchase of a firm by another firm in order to gain some operational benefit which will lead to increased earnings. If Company A, which produces toothpaste, buys Company B, which owns toothpaste tubing and packaging factories, the combination of the two companies’ operational forces means that Company A can now produce their whole product more cheaply than before. Before the buyout, Company B was charging Company A a lot for tubing and packaging, but now because they are the same company, there is no charge.
A Subsidiary is…
Thursday, August 20th, 2009A subsidiary is a company controlled by another company, sometimes called a “holding” company. For example, NBC Universal is a subsidiary of General Electric.
A Market Sector is…
Thursday, August 20th, 2009A market sector is how companies are classified by their industries. If a company sells clothes, we can put them in the apparel sector. Microsoft, for example, would be in the technology sector.
An Acquisition is…
Thursday, August 20th, 2009An acquisition is the purchase of one company by another. You acquire a company through buying or exchanging stock. Usually it relates to a controlling interest, or more than 50% ownership. For example, if you own 35% of a company’s voting shares and you buy another 20% of the shares from someone else (for a total of 55% ownership), you have acquired that company.
An Annual Report is…
Thursday, August 20th, 2009An annual report is a written account of an organization’s financial progress over the past year and its projections for the future. The SEC requires public companies and mutual funds to give an annual report to their shareholders at the end of every fiscal year. Nonprofits also generally publish annual reports.