A slang term used to describe sensationalist reports of financial news and products causing irrational buying that can be detrimental to investors' financial health. Short-term focus by the media on a financial topic can create excitement that does little to help investors make smart, long-term financial decisions, and in many cases clouds investors' decision-making ability. Expanded media coverage, specifically the advent of 24-hour cable news networks and the internet and the tools it has provided the financial industry, has led to a large increase in financial porn. Examples of financial porn include constant advertisements of easy-to-use trading-strategy products that purport to turn minimal investments into small fortunes, media coverage of the latest and greatest sector trends and magazines with front pages that claim to have the next 10-must-own mutual funds of next year. Many of these products and ideas expose investors to great risks posed by both the movement of the market and the risk of fraud. The term was first coined by Emmy-winning Jane Bryant Quinn who is an American personal-finance writer.
A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated with a panic or a run on the banks, in which investors sell off assets or withdraw money from savings accounts with the expectation that the value of those assets will drop if they remain at a financial institution. A financial crisis can come as a result of institutions or assets being overvalued, and can be exacerbated by investor behavior. A rapid string of sell offs can further result in lower asset prices or more savings withdrawals. If left unchecked, the crisis can cause the economy to go into a recession or depression.
An online journal (or web log) that provides news and information related to the finance industry. Financial blogs not only comment on news and information, but some also provide stock analysis based on both fundamental and technical principles. Most, if not all, financial blogs are provided free of charge to the general public. For the most part the style of these blogs is more casual than articles and often reflect the personal opinion of the respective writers. The use of financial blogs has become a great tool for investors to share their thoughts on the latest news in the finance industry. Financial blogs are not only provided by major financial websites, but also from individual investors.Since anyone is capable writing a blog without restrictions on the information used, investors should be wary of what they read. Although reputable websites are reliable with their information, blogs provided by individuals may be more subject to manipulation. Unethical investors can use an investing blog to promote stocks in ways to benefit positions they have taken. Investors who use blogs should be aware these sites exist and ensure that a blog they read has an adequate disclosure policy before they act on anything.
A term indicating the last-minute infusion of cash into a company about to go bankrupt. Airports foam runways prior to an imminent crash landing to help reduce friction and sparks. Just as foaming the runway is a last stand against a horrible crash landing, a company obtaining a loan to stay in business is a last stand against going under."Foam the runway" is also a general statement in business, which refers to preparing for a potential disaster. If a company is in trouble before having to obtain an infusion of cash, foaming the runway will usually just delay the inevitable. Prudent investors should not assume that a cash infusion will save a company, and should carefully review all available information before making an investment decision.
The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets. For example, during a bear market investors will often move their money out of equities and into government securities and money market funds. Another example is investors moving investments from high-risk countries with political unrest and volatile economic conditions to less risky markets of other countries. One indication of a flight to quality is a dramatic fall of the yield on government securities, which is a result of the increased demand for them.
An annual list of the 500 largest companies in the United States as compiled by FORTUNE magazine. The list is put together using the most recent figures for revenue and includes both public and private companies with publicly available revenue data. Exxon Mobil, Walmart, General Electric and Chevron have vied for the top spots on the list in recent years. To be a Fortune 500 company is widely considered to be a mark of prestige. The collective performance of the Fortune 500 companies may be seen as one indicator of the country’s overall economic performance. For example, in the midst of the 2008 recession, the Fortune 500 companies’ collective 335% increase in earnings in 2009 was viewed as a possible sign of economic recovery. Companies' addition to and subtraction from the list also say something about the overall economy; for example, homebuilders dropped off the list after the housing market bubble burst.
A list created by Fortune magazine detailing the 1,000 largest companies in the United States. The Fortune 1000 is based on revenues, rather than other metrics of size, such as market cap or enterprise value. Since revenues are the basis for inclusion on the list, only companies that make revenue figures publicly available are eligible for inclusion in the list. Although less widely mentioned than its subset, the Fortune 500, the Fortune 1000 is still considered an important and prestigious list. Its annual publishing brings great interest in the business community because those who follow the business world are interested in which companies are included in the list along with their position relative to similar companies.
Forensic Accounting utilizes accounting, auditing, and investigative skills to conduct an examination into a company's financial statements. Thus, providing an accounting analysis that is suitable for court. Forensic accountants are trained to look beyond the numbers and deal with the business reality of a situation. They are frequently used in fraud cases.