March 8, 2009
Contest Reminder IndexesDividendsApple PresentationDiscussion
http://www.biz.uiowa.edu/studorgs/hawktrade
Submit order forms by market open tomorrow
Remember: All short sales must be accompanied by protective stop
Created as a way of evaluating overall performance of the stock market
May attempt to track overall market or a specific sector, e.g. Financials
Big Three: Dow Jones Industrial Average S&P 500 NASDAQ Composite
Price-weighted average of 30 largest and most widely held companies
NYSE: DJIAKA “INDP”, “Dow 30”, or “The Dow”
On TV – INDP = level of Dow INDU = day’s change in Dow
As of Friday: 6,626.94Highest close: 14,164.53 (Oct. 9,
2007)
500 Large-Cap Companies Decided by Standard & Poor’s Not necessarily the 500 largest, but most
are in top 500 Ticker varies
Google: .INX Yahoo: ^GSPC
As of Friday: 683.38 Highest close: 1,565.15 (Oct. 9, 2007)
Average of all common stock and similar securities traded on NASDAQ ETF’s, preferred stock, derivatives not
includedNASDAQ: .IXICOver 3000 componentsAs of Friday: 1,293.85Highest close: 5,048.62 (March 10,
2000)
Can’t purchase indexes directlyMust purchase “index funds”
Closed-end fund which attempts to match the performance of index
May own exact components of index (Dow 30)
Or a select few (NASDAQ)Several companies have etf’s
SPDR, ProShares, iShares, etc.
Quarterly payment to all stockholders
How do I receive dividend? 3 Important Dates:▪ X-Date▪ Record Date▪ Payable Date
X-Date AKA Ex-Dividend date, Ex-Date, X-Div date, etc. Only need to own stock on this day to receive
dividend Could buy the day before and sell the day after Two days before record date
Record date All owners “of record” on this date receive
dividend Payable date
The day you actually receive the payment Usually a month or so after record date
AKA Stock Splits “2 For 1” split
Receive 2 shares “for” every 1 you own Price per share cut in half, number of
shares double Value stays the same
“1 for 5” split (reverse split) Receive 1 share for every 5 you own Price per share multiplies by 5 Number of shares divided by 5 Value stays the same
Other way to say it:
Company issued 50% stock dividend Equivalent of “3 for 2” split You receive 50% more shares E.G. if you owned 100 shares, 50% = 50 shares▪ Now own 150 shares
Does not affect value (more shares, lower price)
100% stock dividend = 2 for 1 split
Apple Inc., (NASDAQ: AAPL) formerly Apple Computer Inc., is an American multinational corporation which designs and manufactures consumer electronics and software products. The company's best-known hardware products include Macintosh computers, the iPod and the iPhone.
http://www.google.com/finance?q=aapl
Pros Financially Secure Over 30 Billion in CASH Leader in Innovation Analyst suggest Apple is Overweight (Will
out-perform market) IPOD/IPHONE Halo Article▪ Halo Effect---Consumers are purchasing other
Apple Products because they like the IPOD/IPHONE
Quality Products
Cons Slow Down in Consumer Spending No Dividend for Past 14 Years Steve Jobs is Ill- On Medical Leave
What Does Everyone Else Think?