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The Stock Market. Arthur Reis. What is a Share?. A publicly traded company shares fractions of its ownership . Any investor can buy this SHARE OF STOCK at a Stock Exchange, becoming a business partner of the corporation. Advantages: For the owners: For the investors:. $. $.
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The Stock Market Arthur Reis
What is a Share? • A publicly traded company shares fractions of its ownership. • Any investor can buy this SHARE OF STOCK at a Stock Exchange, becoming a business partner of the corporation. • Advantages: For the owners: For the investors: $ $
Types of Shares • COMMON stock: • Voting rights (business meetings) and dividend payments. • Attract most individual investors (EUA). • eg: PETR3 • PREFERRED stock: • Priority claim to company profits. • Attract most minority shareholders (BRA). • eg: PETR4
Some concepts • RISK (systematic or not) • LIQUIDITY (blue chips) • APPRECIATION and DIVIDENDS • CORPORATE GOVERNANCE (accountability) • Hedger x Speculator
WAYS OF quick PROFIT • How to overcome the indexes? • LEVERAGE: the technique to multiply GAIN and LOSSES. • OPTION: contract between two parties for a future transaction on an asset at a reference price. • FORWARD CONTRACT: contract between two parties to buy or sell an asset at a specified future time at a price agreed today.
Stock exchanges http://en.wikipedia.org/wiki/Stock_exchanges
Bm&fbovespa • Formed in 2008 by the integration of “Bolsa de Valores de Sao Paulo” with “Bolsa de Mercadorias e Futuros” • Are negotiated assets of almost 600 companies and some commodities.
Stock market indexes https://www.agorainvest.com.br/cotacoes/default.asp
Schools of investment analysis • FUNDAMENTAL analysis: • involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. • TECHNICAL anaysis: • security analysis discipline for forecasting the direction of prices through the study of past market price and volume.
Technical analysis • Dow Theory: “the future repeat the past” • The Market Trends HOLD BUY SELL
Thank you and good luck! arthur.reis@engenharia.ufjf.br