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  • Chapter 2

    Sources of Investment Sources of Investment InformationInformation

  • CHAPTER 2 OUTLINE

    2.1 2.1 Ways of Wall StreetWays of Wall Street

    2.2 2.2 Internet RevolutionInternet Revolution

    2.3 2.3 Investment Information on the InternetInvestment Information on the Internet

    2.42.4 Financial PressFinancial Press

    2.5 2.5 Wall Street ResearchWall Street Research

    2.6 2.6 Investments as a ProfessionInvestments as a Profession

  • KEY TERMS

    Chartist/TechnicianChartist/Technician Head and ShouldersHead and Shoulders Stock QuotesStock Quotes Real TimeReal Time EDGAREDGAR Ticker SymbolTicker Symbol 10Q Report10Q Report 10K Report10K Report Proxy StatementsProxy Statements

    SEC Form 144SEC Form 144 Stock Message BoardStock Message Board Bullish/BearishBullish/Bearish Stock BrokerStock Broker Security AnalystSecurity Analyst Portfolio ManagersPortfolio Managers Certified Investment Certified Investment

    PlannerPlanner Investment BankerInvestment Banker

  • Ways of Wall Street

    Caveat Emptor (Let the Caveat Emptor (Let the Buyer Beware)Buyer Beware)

    Where Are the Where Are the Customers Yachts?Customers Yachts?

    Neither the Advice nor the Neither the Advice nor the Wisdom on Wall Street is freeWisdom on Wall Street is free

  • WHAT DID THEY SAY??

    Wall Street & Internet Jargon

    Trader TermsTrader Terms

    Internet TermsInternet Terms

    Technicians TermsTechnicians Terms

    Financial and Investing Glossaries on the Internet:Financial and Investing Glossaries on the Internet:

    http://www.matisse.net/files/glossary.htmlhttp://www.matisse.net/files/glossary.htmlhttp://www.siliconinvestor.com/misc/glossary/alist.htmlhttp://www.siliconinvestor.com/misc/glossary/alist.html
  • TECHNICIANS or CHARTISTS

    Pick stocks based on patterns of Pick stocks based on patterns of past price and volume data--e.g., past price and volume data--e.g., head and shoulders head and shoulders formation--bearish indicatorformation--bearish indicator

    Technical trends can move Technical trends can move markets in short term, but markets in short term, but fundamentals count in longer fundamentals count in longer termterm

    Tend to look at day-to-day stock Tend to look at day-to-day stock movements, often with 20/20 movements, often with 20/20 hindsighthindsight

  • Internet Revolution

    Widespread Widespread dissemination of dissemination of informationinformation

    Two-way Two-way communicationcommunication

    Cheaper and more Cheaper and more timely than print sourcestimely than print sources

    Makes financial markets Makes financial markets more democraticmore democratic

    Reduces information-Reduces information-gathering costsgathering costs

    Can be fertile space for Can be fertile space for stock price manipulation stock price manipulation and fraudand fraud

  • THE INTERNETSo Powerful, It Brings Down Walls

    With a click of the mouse:With a click of the mouse: consumer newsconsumer news attitudesattitudes impressionsimpressions ideasideas variety of new products and servicesvariety of new products and services

    Enemy of despots and dictatorsEnemy of despots and dictators

  • E-commerce and the Internet

    Tool for ConsumersTool for Consumers Tool for CompaniesTool for Companies

    Ready information is Ready information is enemy of high prices enemy of high prices and high profit margins and high profit margins as consumers shop via as consumers shop via the netthe net

    Reduce pricesReduce prices

    Get closer to customersGet closer to customers

    Find out how to meet and Find out how to meet and exceed customer needsexceed customer needs

  • Financial Informationon the Internet

    Stock Quotes in Real TimeStock Quotes in Real Time Volume InformationVolume Information Financial Data on:Financial Data on:

    CompaniesCompanies IndustriesIndustries U.S. EconomyU.S. Economy World eventsWorld events

    QuotesQuotes ChartsCharts NewsNews SEC FilingsSEC Filings Stock Research ReportsStock Research Reports Earnings EstimatesEarnings Estimates FundamentalsFundamentals

    http://cbs.marketwatch.com/http://cbs.marketwatch.com/http://www.dailystocks.com/http://www.dailystocks.com/
  • WHO IS EDGAR?

    Electronic retrieval analysis for SEC filingsElectronic retrieval analysis for SEC filings

    Free website for gov. reports filed by individual companiesFree website for gov. reports filed by individual companies

    For-profit company that supplies For-profit company that supplies investors with SEC reports and filingsinvestors with SEC reports and filings

    Ticker symbol: unique 2,3,or 4 letter Ticker symbol: unique 2,3,or 4 letter code for companycode for company

    http://www.edgar-online.com/
  • SEC REQUIRES

    10Q:10Q: Quarterly Accounting Quarterly Accounting InformationInformation

    10K:10K: Annual Accounting Annual Accounting InformationInformation

    13D:13D: 5% Ownership 5% Ownership PositionsPositions

    Form 144:Form 144: Intention to Sell Intention to Sell Restricted StockRestricted Stock

    Proxy statement or annual meeting announcement Members of top

    management Board of directors Large investors Stock ownership

    positions by managers Pay-for-performance

    incentives

  • REAL TIME QUOTES

    Fast-moving marketsFast-moving markets Up-to-the-minute quotes and newsUp-to-the-minute quotes and news Free quote informationFree quote information

    http://freerealtime.com/http://freerealtime.com/
  • MUTUAL FUND INFORMATION

    Morningstarwatchdog Morningstarwatchdog group for mutual fund group for mutual fund industryindustry

    Comprehensive, timely Comprehensive, timely information and analysisinformation and analysis

    Information on sector Information on sector fundsfunds

    http://www.morningstar.com/http://www.morningstar.com/
  • STOCK MESSAGE BOARDS

    Websites for anonymous individuals to post Websites for anonymous individuals to post information about companies or investmentsinformation about companies or investments

    Timely information about what other investors are Timely information about what other investors are thinkingthinking

    Can be manipulated via misinformation, rumor, and Can be manipulated via misinformation, rumor, and gossipgossip

    http://quote.yahoo.com/
  • FINANCIAL PRESS

    Financial Newspapers:Financial Newspapers: The Wall Street Journal The Wall Street Journal

    (print & interactive (print & interactive versions)versions)

    Investors Business DailyInvestors Business Daily

    New York TimesNew York Times

    San Francisco ChronicleSan Francisco Chronicle

    USA TodayUSA Today

    Financial Periodicals:Financial Periodicals: Barrons,Business WeekBarrons,Business Week

    ForbesForbes

    FortuneFortune

    Inc.Inc.

    MoneyMoney

    WorthWorth

  • WALL STREET RESEARCHAnalyst Opinion Summaries

    Wall Street trading firms opinionsWall Street trading firms opinions Detailed information about:Detailed information about:

    CompaniesCompanies Industries Industries Overall EconomyOverall Economy Global Stock and Bond MarketsGlobal Stock and Bond Markets

    Buy/sell recommendationsBuy/sell recommendations Bullish ConsensusBullish Consensus Bearish SentimentBearish Sentiment

  • WALL STREET RESEARCHCompany Reports

    Company ReportsCompany Reports

    Industry ReportsIndustry Reports

    U.S. Market OutlookU.S. Market Outlook

    Global OutlooksGlobal Outlooks

  • Investments As a ProfessionFinancial Job Market Overview

    Employment opportunities in financial services expected to Employment opportunities in financial services expected to grow rapidlygrow rapidly

    Amount of financial sophistication demanded of finance Amount of financial sophistication demanded of finance specialists and nonspecialists expected to risespecialists and nonspecialists expected to rise Corporate Treasurers/CFOsCorporate Treasurers/CFOs Personnel/Human ResourcesPersonnel/Human Resources

    Boundaries between investment and financial instruments Boundaries between investment and financial instruments continue to blur--> more account executives incontinue to blur--> more account executives in Commercial banksCommercial banks savings institutionssavings institutions insurance carriersinsurance carriers real estate companies real estate companies

  • CAREER OPPORTUNITIESStock Brokers & Investment Managers

    Stock Brokerage:Stock Brokerage: financial agents who act as financial agents who act as go-betweens for individual buyers and sellersgo-betweens for individual buyers and sellers

    Investment ManagementInvestment Management Security Analysts:Security Analysts: specialists who identify specialists who identify

    investment opportunities for individualsinvestment opportunities for individuals

    Portfolio Managers:Portfolio Managers: manage investments for manage investments for individuals and institutionsindividuals and institutions

  • CAREER OPPORTUNITIESFinancial Planners

    Help individuals identify and meet financial goalsHelp individuals identify and meet financial goals

    Certified Financial Planners:Certified Financial Planners: must pass challenging exams must pass challenging exams from College of Financial Planning--equivalent to CPAfrom College of Financial Planning--equivalent to CPA financial plan processing and insurancefinancial plan processing and insurance investment planninginvestment planning income tax planningincome tax planning retirement planning/employee benefitsretirement planning/employee benefits esta