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Features
- A Look at Market Capitalization - Editor, 17 June 2008 - No Comments yet
- Random Walk Hypothesis - Editor, 16 June 2008 - No Comments yet
- Understanding Reverse Stock Splits - Editor, 9 June 2008 - No Comments yet
- Differentiating between Cyclical and Non-cyclical Stocks - Editor, 5 June 2008 - No Comments yet
- Shed Such Stocks Now - Editor, 30 may 2008 - No Comments yet
- It is Never Too Early or Too Late to Learn Stock Investing - Editor, 29 may 2008 - No Comments yet
- The Vulture Investor Is Really an Owl - Editor, 28 may 2008 - No Comments yet
A public company’s market capitalization (also referred to as market cap) is the total market value of its outstanding shares i.e. all issued shares in the hands of investors. This measurement of corporate or economic size of a company is calculated by multiplying the number of outstanding shares by the price of one share, thereby providing a total value for the company’s shares, and therefore for the company as a whole. Instead of using sales or total asset figures to determine the size of a company, investors make use of market capitalization figures.
The financial theory known as the "random walk hypothesis" proposes that stock market prices develop according to a random walk and, therefore, stock market prices are completely unpredictable. This hypothesis is widely accepted by economists, investors and other financial behaviorists, who continue to believe that stock prices are random making it impossible to consistently outperform market averages.
A reverse stock split reduces the number of a company’s shares, which in turn increases the earnings per share, while the company’s market capitalization remains the same. This makes the stock appear to be more valuable than before the split, when in fact nothing has changed. There are a number of reasons why a company may choose to undertake a reverse stock split, let’s consider some of them.
Although it is true that investors have no control over the cycles of a country’s economy, they are able to adjust their investing practices to cope successfully with the economy’s highs and lows. Having a well-balanced investment portfolio is dependent on an understanding of how industries are influenced by the economy before making stock market investments. For this reason it is important for investors to know the fundamental differences between cyclical and non-cyclical stock companies.
There could be more Bear Stearns around the corner. How can you spot bankruptcy in time? Here are five tell-take signs:
We have friends who still do not invest in the stock market. Then there are others. Some of them follow every word of business news. They have made steady losses over the past six months. They discourage friends from stock investing.
A vulture investor is not as nasty as the term sounds. You should use vulture investing methods. That is why a better label matters. Call yourself an owl investor. That sounds wise.
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