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59 Cards in this Set
- Front
- Back
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Represent secured or financially valuable claims on the part of the investors
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Securities
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Represents an ownership claim on the assets of a corporation
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Stock
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Represents a financial claim of money owed by a company
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Bond
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Where stocks and bonds are sold
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Securities Market
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New stocks and bonds
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Primary Securities
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Literally the most popular stock
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Common Stock
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Existing stocks and bonds traded
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Secondary Securities
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A payment to shareholders, on a per-share basis, out of the company’s earnings
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Dividend
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Stock Values
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Par
& Market |
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Current share price
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Market Value
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An organization formed to provide an institutional setting in which stocks can be bought and sold
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Stock Exchange
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The first sale of a company’s stock to the general public
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IPO
(Initial Public Offering) |
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Declared face value at the time of the issue
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Par Value
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Most popular stock exchange is the...
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NYSE
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Market Indexes
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Bull Market
& Bear Market |
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Bull Market
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Prices going up in the market
Prices increasing |
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Bear Market
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Prices going down in the market
Prices decreasing |
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Willing to buy stock as long as it stays below a certain amount
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Limit Order
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Amount of shares ends in Zero
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Round Lot
- Ex. 100 - Ex. 40 |
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Amount of shares is an odd or anyother number
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Odd Lot
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Investment traits of common stock
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- Price volatility
- Dividend payment uncertainty - High growth potential |
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Have preferential claims on dividends
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Prefered Stock
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Investor preferences
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Capital gains
Market appreciation (huge growth potential) |
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The physical location in an exchange where stocks are traded
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Trading Floor
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A central trading facility or physical address where market participants meet face-to-face and engage in open, competitive bidding.
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Auction Market
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For many people, “the stock market” means...
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the NYSE
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The second-largest floor-based U.S. exchange is located in NYC
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American Stock Exchange (AMEX)
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So called because its original traders kept supplies of shares on hand and, as opportunities arose
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Over-the-Counter (OTC) Market
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- The world’s oldest electronic stock market
- Orders are gathered and executed on a computer network |
National Association of Securities Dealers Automated Quotation (Nasdaq) system
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Represent a promise by the issuer to pay the buyer a certain amount of money by a specified future date
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Bonds
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Examples of Bonds
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o U.S. Government bonds
o Municipal bonds o Corporate bonds |
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Nearly all trading in bonds occurs in the ________ markets
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OTC Markets
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The first sale of a company’s stock to the general public
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IPO's
(Initial Public Offering) |
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IPOs are generally not available to the public through...
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Online Retail Brokers
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Safer investments tend to offer lower returns; riskier investments tend to offer higher returns
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Return Risk Relationship
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Buying several different kinds of investments rather than just one so that the risk of loss is reduced by spreading the total investments across more stocks
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Diversification
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Amount of money invested in different alternatives
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Asset Allocation
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A portfolio of stocks, bonds, and other securities purchased with pooled investments from individuals and organizations that achieve instant diversification
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Mutual Funds
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Funds stressing safety and stability
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Money Market Mutual Funds
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Funds stressing conservative capital growth
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Balanced Funds
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Funds stressing maximum long-term capital growth
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Aggressive Growth Funds
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Elliot Kerlin Presentation
Time at A&M |
Was Pre-Med
Switched to Finance Grad in 1998 |
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Went to Work for Merrill Lynch in NYC...
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He was the only aggie there
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Elliot Kerlin Presentation
2000 |
Went to Jupiter Partners (Private Equity)
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Elliot Kerlin Presentation
2003 |
Went to Harvard Business and got MBA
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Elliot Kerlin Presentation
2004 |
Bay State paper company
Was the turnaround manager – company had gone bankrupt |
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Elliot Kerlin Presentation
2005 |
Went back to insight equity
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Financial Landscape
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1. Companies
2. Capital: Investors/Lenders 3. Service Providers 4. Intermediaries (Investment Banks) |
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Insight Equity
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Source of private equity capital used to buy co. out of bankrupcy
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Tradeoffs in Entertainment
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- Reward and Risk
- Bungee Jumping - Opera |
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Risk and Return in Finance
(DEBT) |
6-18% - Private
4-10% - Public |
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Risk and Return in Finance
(Prefered Stock) |
10 - 30% - Private
6 – 9 % - Public |
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Risk and Return in Finance
(Common Stock) |
> 40% - Private
10-14% - Public |
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How to Mitigate Risks
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- Predict/Minimize
- Manage - Eliminate |
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Risk Issues
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- Control
- Lack of Liquidity - Size - Age of Company - Proof of concept |
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What kind of Unsolicited Advice did Elliot Kerlin give? Types?
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School, Professional, & Life
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School Advice
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- Study Hard, Study Abroad, Intern, Travel
- Determine a way to stay in touch with friends and profs - Use the student card to meet people, learn, explore fields |
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Professional Advice
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- Find (develop) a mentor (reference)
- Give people reasons to hire you - Pursue excellence and a good name, exceed expectations - Much of life is sales – practice and close - Focus on contributions and insights vs. title and tenures |
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Life Advice
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- Treat everyone with dignity
- Options have value – Keep them open as long as possible - Learn how to work w/ people (teams, tough personalitites) Now - Expectations Mgmt - Never risk a lot for a little - You can’t have it all…so prioritize |
