Cartoon of the Week Did You Know! Person of the Week Paul Krugman American economist. Krugman is a Nobel Prize winning American economist for his work on New Trade Theory. Krugman is also a leading polemist who rose to public prominence for his attacks on the Bush Presidency. Krugman was a noted critic of austerity and leading advocate for a resurgence in Keynesian economics. Did you know that the lowest position of the Dow Jones ever was 28.48? This position was reached in 1896. For comparison, the highest position ever was 17,068.26 in July 2014. Term of the Week A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. It is a small, short-lived recovery in the price of a declining security, such as a stock. Frequently, downtrends are interrupted by brief periods of recovery - or small rallies - where prices temporarily rise. This can be a result of traders or investors closing out short positions or buying on the assumption that the security has reached a bottom. Dead Cat Bounce Sources: www. toonpool.com; www.Investopedia.com ‘TRIX’ BITE # 1
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Cartoon of the WeekDid You Know!
Person of the Week
Paul Krugman
American economist. Krugman is a Nobel Prize winning American economist for his work on New Trade Theory. Krugman is also a leading polemist who rose to public prominence for his attacks on the Bush Presidency. Krugman was a noted critic of austerity and leading advocate for a resurgence in Keynesian economics.
Did you know that the lowest position of the Dow Jones ever was 28.48?This position was reached in 1896. For comparison, the highest position ever was 17,068.26 in July 2014.
Term of the Week
A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. It is a small, short-lived recovery in the price of a declining security, such as a stock. Frequently, downtrends are interrupted by brief periods of recovery - or small rallies - where prices temporarily rise. This can be a result of traders or investors closing out short positions or buying on the assumption that the security has reached a bottom.
Dead Cat Bounce
Sources: www. toonpool.com; www.Investopedia.com
‘TRIX’ BITE # 1
Cartoon of the WeekDid You Know!
Person of the Week
Benjamin Graham
British-born American professional investor. He is considered the father of “Value-Investing”, an investment approach he began teaching at Columbia Business School n 1928. He is the co-author of the book “Security Analysis” with David Dodd. Successful investors like Warren Buffett and Irving Kahn consider Graham as their Guru. Alongside his revolutionary work in investment finance, Graham also made significant contributions toeconomic theory. Most notably, he devised a new basis for both U.S. and global currency.
The Bombay Stock Exchange which started in 1875 did not have a scale to measure the ups and downs in the stock market. It was only on 1st January 1986 that BSE came out with a stock index “The Sensex”.
Term of the Week
It means going public through back door. The process by which a company comes to have publicly traded shares without an IPO. This could happen through a reverse shell merger, or through acquisition of a public company and offering shares to previous owners. Another way is thorough a series of private placements, selling shares on an exchange to institutional and other sophisticated investors.
He is widely viewed as one of the most successful investors in history. Following the principles set out by Benjamin Graham, he has amassed a personal multibillion dollar fortune mainly through investing in stocks and buying companies through Berkshire Hathaway, an ailing textile mill turned into a financial engine that powered what would become the world's most successful holding company. Shareholders in Berkshire Hathaway who invested $10000 in the company in 1965 are above $50 million mark today. Warren Buffett's investing style of discipline, patience and value has consistently outperformed the market for decades.
Warren Buffett, the Warren Buffett, the second-richest man in the U.S stuck with a $100,000 salary in 2014, as he has for decades to avoid being greedy. The average pay of CEO’s of top 350 firms in USA around $ 16 million!
Term of the Week
The loss in value of an asset after it has been placed in receivership or liquidation. The liquidation differential represents an additional loss a failed asset would experience, and is related to the information cost that parties interested in purchasing the assets of a failed bank would face when researching the asset.
An American economist and statistician best known for his strong belief in free-market capitalism. He strongly opposed the views of Keynesian economists, encouraging governments to minimize their involvement in the economy by reducing taxes and ceasing inflationary policies. In his book A Monetary History of the United States, Friedman illustrates the role of monetary policy in creating and arguably worsening the Great Depression. The Friedman rule is a monetary policy rule proposed by him through which he advocated setting the nominal interest rate at zero.Friedman's work in the field of economics was recognized in 1976, when he was awarded the Nobel Prize in Economics.
The main article in the Economist in March 1999 was famously titled “Cheap Oil : The next shock?” . The article surmised that oil prices could be headed to $5 a barrel and prices might hover in a “normal” range of $5 to $10.
Term of the Week
A widely used indicator in technical analysis. It is a trend-following or lagging indicator because it is based on past prices. The two basic and commonly used MAs are the simple moving average (SMA), which is the simple average of a security over a defined number of time periods, and the exponential moving average (EMA), which gives bigger weight to more recent prices. Whether you are using the 50-day, 100-day or 200-day moving average, the method of calculation and the manner in which the moving average is interpreted remains the same. It is the AM of a certain data points. It aids an investor in choosing when to enter or exit a certain position, which can act as a strong support or resistance.
Moving Average
Sources: www. thestar.com; www.investopedia.com
‘TRIX’ BITE # 4
Cartoon of the Week
Did You Know!
Person of the Week
John Maynard Keynes
Venezuela can simultaneously be the world’s cheapest and most expensive country because of its multiple exchange rate systems. It has four exchange rates including the illegal black market rate !!
He was a British economist whose ideas have fundamentally affected the theory and practice of modern macroeconomics .He built on and greatly refined earlier work on the causes of business cycles, and he is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century. His ideas are the basis for the school of thought known as Keynesian economics and its various offshoots. He is well-known for his stance that national governments should attempt to smooth out the effects of expansion and contraction in the business cycle by using fiscal and monetary policy.
A depositary receipt (DR) is a type of negotiable (transferable) financial security that is traded on a local stock exchange but represents a security, usually in the form of equity, that is issued by a foreign publicly listed company. The DR, which is a physical certificate, allows investors to hold shares in equity of other countries. The DR is created when a foreign company wishes to list its already publicly traded shares or debt securities on a foreign stock exchange. Before it can be listed to a particular stock exchange, the company in question will first have to meet certain requirements put forth by the exchange. Depositary receipts that are listed and traded in the United States are American depositary receipts (ADRs). European banks issue European depository receipts (EDRs), and other banks issue global depository receipts (GDRs) etc.
He was a American economist who served as the Chairman of Federal Reserve of the United States from 1987 to 2006. As chairman, Greenspan was largely responsible for directing U.S. national monetary policy; he is often credited with keeping inflation at historically low levels. While widely respected for his economic knowledge and political savvy, Greenspan's critics have accused him of causing the dot-com collapse of 2000. He was subsequently criticized for contributing to the subprime mortgage crisis. When his fifth term expired in 2006, Greenspan retired from his position at the Federal Reserve Board.
A band plotted two standard deviations away from a simple moving average, developed by famous technical trader John Bollinger. Because standard deviation is a measure of volatility, Bollinger Bands adjust themselves to the market conditions. When the markets become more volatile, the bands widen (move further away from the average), and during less volatile periods, the bands contract (move closer to the average). The tightening of the bands is often used by technical traders as an early indication that the volatility is about to increase sharply. This is one of the most popular technical analysis techniques. The closer the prices move to the upper band, the more overbought the market, and the closer the prices move to the lower band, the more oversold the market.
