A slang phrase used when an investor purchases or sells a security at a beneficial price by executing a trade before the market can respond to new information. Beating the gun denotes an investor's ability to time the market and react more quickly than other investors. Taobiz explains Beating The Gun Experienced or professional investors try to beat the gun to earn extra return on their investments. Beating the gun requires that an investor act on information before every other investor, which is a difficult accomplishment for casual traders.
An investor who believes that a particular security or market is headed downward. Bears attempt to profit from a decline in prices. Bears are generally pessimistic about the state of a given market. Taobiz explains Bear For example, if an investor were bearish on the S&P 500 they would attempt to profit from a decline in the broad market index. Bearish sentiment can be applied to all types of markets including commodity markets, stock markets and the bond market. Although you often hear that the stock market is constantly in a state of flux as the bears and their optimistic counterparts, "bulls", are trying to take control, do remember that over the last 100 years or so the U.S. stock market has increased an average 11% a year. This means that every single long-term market bear has lost money.
An equity security that is wholly owned by whoever holds the physical stock certificate. The issuing firm neither registers the owner of the stock, nor does it track transfers of ownership. The company disperses dividends to bearer shares when a physical coupon is presented to the firm. Taobiz explains Bearer Share Because the share is not registered to any authority, transferring the ownership of the stock involves only delivering the physical document. Bearer shares lack the regulation and control of common shares because ownership is never recorded. Similar to bearer bonds, these shares are often international securities.
The illegal practice of attempting to push the price of a stock lower by taking large short positions and spreading unfavorable rumors about the target firm. Taobiz explains Bear Raid In a bear raid, the manipulators profit on the difference between the original stock price and the lower (manipulated) price. This was a popular practice in the early 1900s.
The investment approach that aims to follow the strategies implemented by Benjamin Graham. The Benjamin Method of investing is based on fundamental principals of value investing, which is the process of discovering undervalued stocks. Benjamin Graham, the founder of value investing, was primarily concerned with minimizing losses rather than maximizing profits. Taobiz explains Benjamin Method The Benjamin Method focuses on such metrics as the P/E ratio, which enables investors to determine how expensive the earnings of a company are relative to its competitors. However, rather than simply relying on static metrics, a full picture can only be determined by examining the quality of the earnings, as well as other corporate performance measures.
A scholar and financial analyst who is widely recognized as the father of value investing. His famous book, "The Intelligent Investor", has gained recognition as one of the best and most important investment pieces written illustrating the fundamentals of a value-investing strategy. Taobiz explains Benjamin Graham Graham had a profound influence on his pupil Warren Buffett, who would become the most famous investor of all time, in grad school at Columbia University. Graham instilled the fundamental principles of value investing into Buffett - principles upon which he relied to amass one of the world's largest personal fortunes.
A standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose. Taobiz explains Benchmark When evaluating the performance of any investment, it's important to compare it against an appropriate benchmark. In the financial field, there are dozens of indexes that analysts use to gauge the performance of any given investment including the S&P 500, the Dow Jones Industrial Average, the Russell 2000 Index and even competitor fund.
1. An offer made by an investor, a trader or a dealer to buy a security. The bid will stipulate both the price at which the buyer is willing to purchase the security and the quantity to be purchased. 2. The price at which a market maker is willing to buy a security. The market maker will also display an ask price, or the amount and price at which it is willing to sell. Taobiz explains Bid This is the opposite of the ask, which stipulates the price a seller is willing to accept for a security and the quantity of the security to be sold at that price. 1. An example of a bid in the market would be $23.53 x 1,000, which means that an investor is willing to purchase 1,000 shares at the price of $23.53. If a seller in the market is willing to sell that amount for that price, then the transaction is completed. 2. Market makers are vital to the efficiency and liquidity of the marketplace. By quoting both bid and ask prices on the market, they always allow investors to buy or sell a security if they need to.