A nationally recognized, well-established and financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth. Taobiz explains Blue Chip The name "blue chip" came about because in the game of poker the blue chips have the highest value. Blue chip stocks are seen as a less volatile investment than owning shares in companies without blue chip status because blue chips have an institutional status in the economy. Investors may buy blue chip companies to provide steady growth in their portfolios. The stock price of a blue chip usually closely follows the S&P 500.
A fully automated trading system created by the Boston Stock Exchange and five other financial conglomerates. The BEX offered a high-speed, low-cost alternative to market duopoly. The BEX also provided a superior ability to route market trades electronically and the opportunity for anonymous trade handling and execution. Taobiz explains Boston Equities Exchange - BEX The BEX opened in December of 2006 and was closed on September 5, 2007. It had struggled to gain market share because of the strength of its participants. The BEX's short life raises questions about whether fully automated exchanges can compete with the traditional exchanges and Nasdaq.
An offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout. Also known as a "scrip issue" or "capitalization issue". Taobiz explains Bonus Issue New shares are issued to shareholders in proportion to their holdings. For example, the company may give one bonus share for every five shares held.
The first and largest securities market in India, the Bombay Stock Exchange (BSE) was established in 1875 as the Native Share and Stock Brokers' Association. based in Mumbai, India, the BSE lists over 6,000 companies and is one of the largest exchanges in the world. The BSE has helped develop the country's capital markets, including the retail debt market, and helped grow the Indian corporate sector. Taobiz explains Bombay Stock Exchange (BSE) .BO In 1995 the BSE switched from an open-floor to an electronic trading system. Securities listed by the BSE include stocks, stock futures, stock options, index futures, index options and weekly options. The BSE's overall performance is measured by the Sensex, an index of 30 of the BSE's largest stocks covering 12 sectors.
A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. Taobiz explains Capital Intensive In all of the above industries, a large financial commitment is required just to get the first unit of good or service produced. once the upfront investments are made, there may be economies of scale with regards to ongoing expenses and sales growth. But the initial hurdle to get into the business tends to keep the list of competitors small, creating high barriers to entry. Companies in capital-intensive industries are thus often marked by high levels of depreciation and fixed assets on the balance sheet.
A category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. Also referred to as the "industrials sector". Taobiz explains Capital Goods Sector Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
A type of market index whose individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting. The value of a capitalization-weighted index can be computed by adding up the collective market capitalizations of its members and dividing it by the number of securities in the index. Also known as a "market-value weighted index". Taobiz explains Capitalization-Weighted Index Most of the broadly-used market indexes today are "cap-weighted" indexes, such as the S&P 500, Nasdaq, Wilshire, Hang-Seng and EAFE indexes. In a cap-weighted index, large price moves in the largest components can have a dramatic effect on the value of the index. Some investors feel that this overweighting toward the larger companies gives a distorted view of the market, but the fact that the largest companies also have the largest shareholder bases makes the case for having the higher relevancy in the index.
A slang term used to describe a perfect stock or investment. In the 1979 hit movie "10", actress Bo Derek portrayed the "perfect woman", or "the perfect 10". Taobiz explains Bo Derek This term was used more often in the early 1980s, after the movie "10" first came out. Nowadays, the name of a more current celebrity, like Jennifer Lopez, might be used in finance jargon.