Exchanges
DOW
NASDAQ
CBOT
S&P 500
RUSSEL 2000
FTSE
LA BOURSE
NIKKEI
HENG SENG
DOW Companies removed
Alcoa, BofA, HP, AT&T
Buy side" - Buy stocks
Mutual funds-
Fidelity, Vanguard, Wellington -- portfolio managers
Institutional Investors -- CalPERs
Hedge Funds
Icahn Capital Mgmt
Pershing Square - short stocks
Liquid Alternatives
-Global real estate
-Start-up companies
-Unlisted securities
Sell side
-Analysts
-Private clients-trading
-Investment banking
Budget Bracket
Merrill Lynch
Goldman Sachs
Morgan Stanley
J.P.Morgan
Bear STerns
Lehman Brothers
Niche players: Keefe, Bruyette, and Woods; Fox, Pitt-Kelton
Retail Brokers
-Execute trades for clients, earn commissions (beware)
-Bring individuals investors' assets into fee-based accounts
evolving job function: online brokers=cheaper commissions & internet offers research=less need for advice
-Essentially sales function
Institutional Sales
-Provide research/insight for Portfolio Mgers to bring in trading commissions=the link between sellside and buyside
-Primarily relationship mgmt
Analysts
-Sell-side: sell research to buyside in order to earn commissions and close investment banking deals
-Associates manage models, client calls, eventually cover their own space
Investment Bankers
Underwrite corporations' equity and debt offerings, advise on mergers & acquisitions, take a % of deal as fee revenue
-Regulated interactions with Analysts
-Analysts: modeling, presentations
-Associates: jack of all trades
-VPs/MDs: deal sourcing, relatio
The Chinese Wall
Supposed" wall barring information transfer between banking, analysts, and sales
Technical Analysis
Chart Analysis
-Head and shoulder
-Ceilings and floors
-Breakouts
-200 Day Moving Avg
Fundamental Analysis
-Mgmt team
-Product characteristics
-Industry characteristics
-Future cash flows
Current trends
Re-regulation: conflicts between investment banking and commercial banking (Enron and Worldcom)
Analyst scrutiny: conflicts between research and investment banking
Accounting: quality of reported financial results
Blue chip
Large, well established, and financially sound company that has operated for many years
Dividend
a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits
Beta of a stock
risk an investor is exposed to by holding on to a particular stock or portfolio as compared to the market as a whole
Stock split
For example, assume that XYZ Corp. has 20 million shares outstanding and the shares are trading at $100, which would give it a $2 billion market capitalization. The company's board of directors decides to split the stock 2-for-1. Right after the split tak
Penny stocks
just don't - common stock valued at less than one dollar
Managerial Implications
-Must manage Wall street expectations
-Mgers are responsible for controlling the stock price
-Mgers are responsible for guiding investment banking activities
-Mgers guide investment of excess profits. it is illegal to fix, or prop up the stock price
Further reading
WSJ
Barron's
Bloomberg
DOW
United States
NADAQ
United States
CBOT
Options Trading in Chicago
S&P 500
Standard and Pores
Russel 2000
London
FTSE
Financial Times in London
La Bourse
French Exchange
Nikkei
Tokoyo
Heng Seng
Chinese Exchange
Exchanges
DOW
NASDAQ
CBOT
S&P 500
RUSSEL 2000
FTSE
LA BOURSE
NIKKEI
HENG SENG
DOW Companies removed
Alcoa, BofA, HP, AT&T
Buy side" - Buy stocks
Mutual funds-
Fidelity, Vanguard, Wellington -- portfolio managers
Institutional Investors -- CalPERs
Hedge Funds
Icahn Capital Mgmt
Pershing Square - short stocks
Liquid Alternatives
#NAME?
Sell side
#NAME?
Budget Bracket
Merrill Lynch
Goldman Sachs
Morgan Stanley
J.P.Morgan
Bear STerns
Lehman Brothers
Niche players: Keefe, Bruyette, and Woods; Fox, Pitt-Kelton
Retail Brokers
-Execute trades for clients, earn commissions (beware)
-Bring individuals investors' assets into fee-based accounts
evolving job function: online brokers=cheaper commissions & internet offers research=less need for advice
-Essentially sales function
Institutional Sales
#NAME?
Analysts
#NAME?
Investment Bankers
Underwrite corporations' equity and debt offerings, advise on mergers & acquisitions, take a % of deal as fee revenue
-Regulated interactions with Analysts
-Analysts: modeling, presentations
-Associates: jack of all trades
-VPs/MDs: deal sourcing, relatio
The Chinese Wall
Supposed" wall barring information transfer between banking, analysts, and sales
Technical Analysis
Chart Analysis
-Head and shoulder
-Ceilings and floors
-Breakouts
-200 Day Moving Avg
Fundamental Analysis
#NAME?
Current trends
Re-regulation: conflicts between investment banking and commercial banking (Enron and Worldcom)
Analyst scrutiny: conflicts between research and investment banking
Accounting: quality of reported financial results
Blue chip
Large, well established, and financially sound company that has operated for many years
Dividend
a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits
Beta of a stock
risk an investor is exposed to by holding on to a particular stock or portfolio as compared to the market as a whole
Stock split
For example, assume that XYZ Corp. has 20 million shares outstanding and the shares are trading at $100, which would give it a $2 billion market capitalization. The company's board of directors decides to split the stock 2-for-1. Right after the split tak
Penny stocks
just don't - common stock valued at less than one dollar
Managerial Implications
#NAME?
Further reading
WSJ
Barron's
Bloomberg
DOW
United States
NADAQ
United States
CBOT
Options Trading in Chicago
S&P 500
Standard and Pores
Russel 2000
London
FTSE
Financial Times in London
La Bourse
French Exchange
Nikkei
Tokoyo
Heng Seng
Chinese Exchange