Common Stock

August 19, 2009
Common Stock
The term common stock is a form of corporate equity ownership, a type of security. It is called “common” to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc.
when people talk about stocks they are usually referring to this type which is known as Common stock is, well, common.  . In fact, the majority of stock is issued is in this form. We basically went over features of common stock in the last section. Common shares represent ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management.
Over the long term, common stock, by means of capital growth, yields higher returns than almost every other investment.
Common stock is usually voting shares, though not always. Holders of common stock are able to influence the corporation through votes on establishing corporate objectives and policy, stock splits, and electing the company’s board of directors.

The term common stock is a form of corporate equity ownership, a type of security. It is called “common” to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc.

common stock

when people talk about stocks they are usually referring to this type which is known as Common stock is, well, common.  In fact, the majority of stock is issued is in this form. We basically went over features of common stock in the last section. Common shares represent ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management.

Over the long term, common stock, by means of capital growth, yields higher returns than almost every other investment.

Common stock is usually voting shares, though not always. Holders of common stock are able to influence the corporation through votes on establishing corporate objectives and policy, stock splits, and electing the company’s board of directors.









Preferred Stock

April 20, 2009

A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.


preferred-stock


The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as “preferred shares”.


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There are certainly pros and cons when looking at preferred shares. Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation and they have a fixed dividend (paid before common stockholders), but investors must weigh these positives against the negatives, including giving up their voting rights and less potential for appreciation.


Stock Certificate

April 14, 2009

In a corporate it is the Paper evidence of ownership. The certificate would indicate the type of stock (common, preferred), any restrictions pertaining to the sale of the stock, the number of shares, the par value, etc. Today, the larger corporations with many shareholders are likely to use electronic records instead of issuing the paper stock certificates.



stock-certificate


In corporate law a stock certificate which is also known as certificate of stock or share certificate, is a legal document that certifies ownership of a specific number of stock shares in a corporation.

Stock certificates are generally divided into two forms:


Registered stock certificates:
Bearer stocks certificates:


A registered stock certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stockholder’s register of the corporation.
A bearer stock certificate, as its name implies is a bearer instrument, and physical possession of the certificate entitles the holder to exercise all legal rights associated with the stock
Usually only shareholder with stock certificates can vote in a shareholders’ general meeting. Sometimes a shareholder with a stock certificate can give a proxy to another person to allow them to vote the shares in question. Voting rights are defined by the corporation’s charter and corporate law.




Trade credit

March 31, 2009

This type of credit exists when one firm provides goods or services to a customer with an agreement to bill them later, or receive a shipment or service from a supplier under an agreement to pay them later. It can be viewed as an essential element of capitalization in an operating business because it can reduce the required capital investment to operate the business if it is managed properly. Trade credit is the largest use of capital for a majority of business to business (B2B) sellers in the United States and is a critical source of capital for a majority of all businesses.

There are many forms of trade credit in common use. Various industries use various specialized forms. They all have, in common, the collaboration of businesses to make efficient use of capital to accomplish various business objectives.

For many borrowers in the developing world, trade credit serves as a valuable source of alternative data for personal and small business loans. For example, Wal-Mart, the largest retailer in the world, has used trade credit as a larger source of capital than bank borrowings; trade credit for Wal-Mart is 8 times the amount of capital invested by shareholders.


Credit Report 13

March 19, 2009

Short Term Trading

Short-term trading refers to the trading of stocks and other securities over brief periods of time, such as a few weeks or months. Short-term trading should not be confused with day trading, where stocks are bought and sold within the span of one trading day. In general, those who practice short-term trading rely heavily on technical analysis and tools such as charts and graphs in order to make decisions about how and when to place a trade. This differs from a strategy of fundamental analysis, where an investor will research a company’s earnings, history, management, balance sheet, labor relations and other “fundamental” factors before purchasing or selling the company’s stock.

short-term-trading

An investor who uses short-term trading has little practical use for fundamental analysis because of the time and effort involved in it. A short-term trader is much more concerned with where the price of a stock is at the moment, and where it is going in the near future. It is often easier for a trading novice to become familiarized with technical tools such as charts and algorithms than it is to learn what makes a company strong and therefore a good long-term investment. Because of this, short-term trading is very popular, especially in times when stock markets have a general upward trend.
One very common type of short-term trading is swing trading. This consists of buying a stock with the hope of taking a profit within a few days or weeks. The ideal environment for swing trading is when the market is not exhibiting any particular trend, but will go up for a few days and down for a few days, alternately. A swing trader aims to take advantage of these fluctuations, with no regard for the fundamentals of the underlying company, since these don’t normally change over a period of days.
Position trading involves holding a stock for a few months, or perhaps as much as a year. A position trader, as opposed to a swing trader, has a somewhat long-term outlook. In this case, fundamentals can be important to consider, especially if they indicate the potential for a rise in price which may not fully play out for months. While still considered a type of short-term trading, it is not usually subject to the level of risk associated with day trading or swing trading.