INTEREST
Interest measures the cost of borrowing money from a lender and is usually expressed as an annual percentage of the principal.
Interest is usually paid only on the principal, that is, on the sum of money loaned, and it is called simple interest. In some cases, interest is paid not only on the principal but also on the cumulative total of past interest payments. This procedure is known as compounding the interest, and the amount so paid is called compound interest.
The rate of interest is expressed as a percentage of the principal paid for its use for a given time, usually a year. Thus, a loan of $100 at 10 percent per annum earns interest of $10 a year. The current, or market, rate of interest is determined primarily by the relation between the supply of money and the demands of borrowers .
When the supply of money available for investment increases faster than the requirements of borrowers, interest rates tend to fall. Conversely, interest rates generally rise when the demand for investment funds grows faster than the available supply of funds to meet that demand. Business executives will not borrow money at an interest rate that exceeds the return they expect the use of the money to yield.
Interest costs depends on the inflation rate, the credit risk of the borrower and the time value of money.
February 18, 2009
February 17, 2009
ACCESS Card
Access is a former credit card introduced in Great Britain in 1972 by a consortium of National Westminster Bank, Midland Bank (now HSBC), Lloyds Bank (now Lloyds TSB), and The Royal Bank of Scotland, as a rival to the established Barclaycard (VISA).
It was also issued in both Northern Ireland and the Republic of Ireland by Ulster Bank, a subsidiary of NatWest, Northern Bank, then a subsidiary of Midland; and Bank of Ireland, which was unconnected to the founder banks. The card scheme was run from Southend-on-Sea in Essex, by the Joint Credit Card Company Limited. It participated in the Eurocard/MasterCard systems. Europay International SA has since been taken over by MasterCard International itself.
One of the early slogans was Your flexible friend (which was featured in an episode of Mr. Bean); another slogan which featured in a television advertisement was Does you does, or does you don't take Access? (sung to the tune of Is You Is or Is You Ain't My Baby), accompanied by an animated Access and his friend Money (a pound sign). Access merged with the international credit card brand MasterCard in 1996.
Some businesses still advertise as accepting the Access card as old signage has not been removed. The brand is considered nostalgic in the United Kingdom, in a similar manner to the former Midland Bank griffin logo.
It was also issued in both Northern Ireland and the Republic of Ireland by Ulster Bank, a subsidiary of NatWest, Northern Bank, then a subsidiary of Midland; and Bank of Ireland, which was unconnected to the founder banks. The card scheme was run from Southend-on-Sea in Essex, by the Joint Credit Card Company Limited. It participated in the Eurocard/MasterCard systems. Europay International SA has since been taken over by MasterCard International itself.
One of the early slogans was Your flexible friend (which was featured in an episode of Mr. Bean); another slogan which featured in a television advertisement was Does you does, or does you don't take Access? (sung to the tune of Is You Is or Is You Ain't My Baby), accompanied by an animated Access and his friend Money (a pound sign). Access merged with the international credit card brand MasterCard in 1996.
Some businesses still advertise as accepting the Access card as old signage has not been removed. The brand is considered nostalgic in the United Kingdom, in a similar manner to the former Midland Bank griffin logo.
February 16, 2009
Debt Financing
Debt financing is the process where a firm sells bonds, bills, notes or other promises to reply to individuals or institutions in order to raise capital. In exchange lending money, those individuals and institutions agree to be creditors, and expect to be paid the principal and interest.
Debt financing is opposed to raising capital through equities market or public issues, or equity financing, which reflects an exchange of ownership in the firm in exchange of financing, and does not come with an explicit promise to repay.
Advantages and Disadvantages
Unlike the equity market, debt financing allows a firm to raise capital without having to sell shares to investors, diluting the firmâ??s ownership. Debt financing tends to appeal to smaller businesses which have a harder time finding equity financing or simply wish not to relinquish control of their company. However, the amount of capital a firm may raise through debt financing is, on average, usually lower than through equity markets, and depends heavily on whether potential creditors are willing to provide loans.
Debt instrument
A written, or otherwise recorded promise to repay. Debt instruments enable the issuer to raise capital, by establishing terms attractive to suppliers of capital to invest. Debt instruments typically state a repayment schedule, establish a interest rate on outstanding debt, and explicitly state the issuer's obligation to repay.
Standardize debt instruments make issuing, purchasing and transfering these obligations easy. Such added liquidity makes the purchase and issuance of debt more attractive, since purchases gain confidence that they may trade their debt easily in the market, and issuers may be confident that can find a purchasers of their new debt.
source: gocurrency
Debt financing is opposed to raising capital through equities market or public issues, or equity financing, which reflects an exchange of ownership in the firm in exchange of financing, and does not come with an explicit promise to repay.
Advantages and Disadvantages
Unlike the equity market, debt financing allows a firm to raise capital without having to sell shares to investors, diluting the firmâ??s ownership. Debt financing tends to appeal to smaller businesses which have a harder time finding equity financing or simply wish not to relinquish control of their company. However, the amount of capital a firm may raise through debt financing is, on average, usually lower than through equity markets, and depends heavily on whether potential creditors are willing to provide loans.
Debt instrument
A written, or otherwise recorded promise to repay. Debt instruments enable the issuer to raise capital, by establishing terms attractive to suppliers of capital to invest. Debt instruments typically state a repayment schedule, establish a interest rate on outstanding debt, and explicitly state the issuer's obligation to repay.
Standardize debt instruments make issuing, purchasing and transfering these obligations easy. Such added liquidity makes the purchase and issuance of debt more attractive, since purchases gain confidence that they may trade their debt easily in the market, and issuers may be confident that can find a purchasers of their new debt.
source: gocurrency
Amortization
The gradual elimination of debt in regular payments over time.
This is a specified time period and a constant payment amount at each interval. This amount must be high enough to cover both principal and interest. Another definition of amortization is similar to depreciation. This is the deduction of capital expenses over time, as a method of measuring the consumption of the value of long-term assets, such as equipment or buildings. Because this time period is in effect the life of the asset, it is also a specified time period. The period as a whole is known as the amortization term. It is often pattern of payments is organized in what is known as an amortization schedule, which is a table detailing the payments made and anticipated, in terms of date and amounts.
Amortization method
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
source: gocurrency
This is a specified time period and a constant payment amount at each interval. This amount must be high enough to cover both principal and interest. Another definition of amortization is similar to depreciation. This is the deduction of capital expenses over time, as a method of measuring the consumption of the value of long-term assets, such as equipment or buildings. Because this time period is in effect the life of the asset, it is also a specified time period. The period as a whole is known as the amortization term. It is often pattern of payments is organized in what is known as an amortization schedule, which is a table detailing the payments made and anticipated, in terms of date and amounts.
Amortization method
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
source: gocurrency
Know About the Importance of Google Adsense
"for me, i was so happy that adsense gives a lot of help to me. (Help Features Listed in). And I really appreciated it much.
From:
Andy Bustos
Credit cards and Moneymatters and Team.
About Google AdSense
Google AdSense is a program enabling online businesses to earn revenue from serving ads precisely targeted to specific web content and search pages. With service levels ranging from online sign-up to dedicated support management, a broad range of sites profit from AdSense. Thousands of Google advertisers also benefit from AdSense by gaining exposure on sites across the Google Network, which includes many of the Top 100 Media Metrix sites such as AOL, About.com, Amazon, Ask.com, and Lycos.
From:
Andy Bustos
Credit cards and Moneymatters and Team.
About Google AdSense
Google AdSense is a program enabling online businesses to earn revenue from serving ads precisely targeted to specific web content and search pages. With service levels ranging from online sign-up to dedicated support management, a broad range of sites profit from AdSense. Thousands of Google advertisers also benefit from AdSense by gaining exposure on sites across the Google Network, which includes many of the Top 100 Media Metrix sites such as AOL, About.com, Amazon, Ask.com, and Lycos.
February 12, 2009
Banking and Finance
News about rural banks closing sends shivers to Philippine depositors, and also cast doubts on the stability of our banking institution. Can we blame them? It’s their hard earned money so we expect people to guard them with their lives. Investigations are ongoing but people are not so interested with the outcome, they want their money and investments protected.
So given the situation and the economic slowdown, what can banks do to further strengthen their market position?
Where are the opportunities?
Leading independent research and advisory firm Financial Insights, an IDC company, today announces the release of a report that assesses opportunities for banks in the current crisis environment. It highlights pockets of growth in lending in several Asia/Pacific markets, shifts in customer deposits which allow aggressive banks to gain market share, and opportunities for generating fee income.
More insights are revealed in this new study,
"Asia/Pacific Banking in 2009: Opportunities Amid A Crisis".
"A thorough review of the market reveals some opportunities for revenue growth, and for further expansion of customer base and product portfolios despite the economic crisis," remarks Michael Araneta, Senior Research Manager, Financial Insights Asia/Pacific.
‘’The environment however is by no means bright and rosy, and significant risks need to be considered. Market conditions are volatile, causing opportunities to shift quickly. The game will be won by those agile and capable enough to execute strategies efficiently,’’ Araneta continues.
Financial Insights notes that banks’ strategic IT initiatives have been realigned to reflect the opportunities in the market. Despite tight budgets, banks will still spend on technologies that allow them to blunt the adverse effects of the crisis, build business despite the slowdown, and operate efficiently in a crisis environment.
For example, while banks need to continue investing in origination solutions for loan expansion, they also need to invest strategically in modeling and analytics. Investments in scoring, modeling, and analytics will help in key areas such as decisioning, pricing, servicing, fraud prevention, and even collections and recovery.
Highlights of this report
- Even before the escalation of the financial crisis, Asia/Pacific banks were already projecting a slowdown in lending for 2009. Financial Insights have revised downwards the estimated average loan growth for 12 key Asia/Pacific markets to 8.7%. However, there are still significant drivers for lending growth that need to be considered. These include government mandates and interventions, dwindling international funding options, microfinance, and moves by aggressive players to win market share from weakened rivals.
- Deposit mobilization will proceed impressively in under-banked countries like India (where industry deposit growth is expected to be at about 20% year-on-year in 2009) and Vietnam (estimated to be 11%). In most other Asia/Pacific markets however, it will be about acquiring market share from competing banks, or attracting customers away from savings and investment alternatives.
- While some fee income sources like corporate finance, underwriting, credit cards and wealth management sales will be affected by the market slowdown, opportunities to generate service-based fees, such as those charged on transaction accounts, fund transfers and cash management, will remain robust. New strategies will need to consider the ideal mix of fee income sources that the bank is able to support.
Araneta continues,
"New business objectives and requirements are being used to justify traditional technology projects like core banking upgrades. The chase for deposits will hopefully help rebuild the momentum for core banking system projects in the medium term. Business and IT teams will consider the scalability of their current core systems as the bank’s deposit base expands, and as new deposit products need to be brought to market."
"Overall, the financial crisis is expected to bring risk management back into focus. Technology teams should be ready to address risk management issues related to their work, including risks inherent in technologies under implementation, project implementation issues, as well as risks associated with vendors and technology partners," Araneta adds.
The secret to success in this time of crisis is to stay focus and do not panic. It’s a man made problem so there will always be a solution. The key is to stay on course with your corporate objectives and goals and better address customer needs.
So given the situation and the economic slowdown, what can banks do to further strengthen their market position?
Where are the opportunities?
Leading independent research and advisory firm Financial Insights, an IDC company, today announces the release of a report that assesses opportunities for banks in the current crisis environment. It highlights pockets of growth in lending in several Asia/Pacific markets, shifts in customer deposits which allow aggressive banks to gain market share, and opportunities for generating fee income.
More insights are revealed in this new study,
"Asia/Pacific Banking in 2009: Opportunities Amid A Crisis".
"A thorough review of the market reveals some opportunities for revenue growth, and for further expansion of customer base and product portfolios despite the economic crisis," remarks Michael Araneta, Senior Research Manager, Financial Insights Asia/Pacific.
‘’The environment however is by no means bright and rosy, and significant risks need to be considered. Market conditions are volatile, causing opportunities to shift quickly. The game will be won by those agile and capable enough to execute strategies efficiently,’’ Araneta continues.
Financial Insights notes that banks’ strategic IT initiatives have been realigned to reflect the opportunities in the market. Despite tight budgets, banks will still spend on technologies that allow them to blunt the adverse effects of the crisis, build business despite the slowdown, and operate efficiently in a crisis environment.
For example, while banks need to continue investing in origination solutions for loan expansion, they also need to invest strategically in modeling and analytics. Investments in scoring, modeling, and analytics will help in key areas such as decisioning, pricing, servicing, fraud prevention, and even collections and recovery.
Highlights of this report
- Even before the escalation of the financial crisis, Asia/Pacific banks were already projecting a slowdown in lending for 2009. Financial Insights have revised downwards the estimated average loan growth for 12 key Asia/Pacific markets to 8.7%. However, there are still significant drivers for lending growth that need to be considered. These include government mandates and interventions, dwindling international funding options, microfinance, and moves by aggressive players to win market share from weakened rivals.
- Deposit mobilization will proceed impressively in under-banked countries like India (where industry deposit growth is expected to be at about 20% year-on-year in 2009) and Vietnam (estimated to be 11%). In most other Asia/Pacific markets however, it will be about acquiring market share from competing banks, or attracting customers away from savings and investment alternatives.
- While some fee income sources like corporate finance, underwriting, credit cards and wealth management sales will be affected by the market slowdown, opportunities to generate service-based fees, such as those charged on transaction accounts, fund transfers and cash management, will remain robust. New strategies will need to consider the ideal mix of fee income sources that the bank is able to support.
Araneta continues,
"New business objectives and requirements are being used to justify traditional technology projects like core banking upgrades. The chase for deposits will hopefully help rebuild the momentum for core banking system projects in the medium term. Business and IT teams will consider the scalability of their current core systems as the bank’s deposit base expands, and as new deposit products need to be brought to market."
"Overall, the financial crisis is expected to bring risk management back into focus. Technology teams should be ready to address risk management issues related to their work, including risks inherent in technologies under implementation, project implementation issues, as well as risks associated with vendors and technology partners," Araneta adds.
The secret to success in this time of crisis is to stay focus and do not panic. It’s a man made problem so there will always be a solution. The key is to stay on course with your corporate objectives and goals and better address customer needs.
February 06, 2009
Foreign Exchange Market
Foreign Exchange Trading
Foreign Exchange Trading or FX Trading, clients are able to hedge against, or speculate upon, changes in the exchange rate of two currencies. For example, a speculator can long EUR/USD in foreign exchange market in order to profit from capturing the appreciation of Euro against the U.S. Dollar. Foreign exchange services provide an opportunity for clients to trade FX. Foreign Exchange Trading is done on the foreign exchange market.
Foreign Exchange Spot Trading
Foreign exchange spot trading is buying one currency with a different currency for immediate delivery, rather than for future delivery.
The standard settlement timeframe for Foreign Exchange Spot trades is T+2 days; i.e., 2 days from the date of trade execution. A notable exception is the USD/CAD currency pair which settles T+1.
Foreign Exchange Reserves
(also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. This broader figure is more readily available, but it is more accurately termed official international reserves or international reserves. These are assets of the central bank held in different reserve currencies, such as the dollar, euro and yen, and used to back its liabilities, e.g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.
Foreign Exchange Option
In finance, a foreign exchange option (commonly shortened to just FX option or currency option) is a derivative financial instrument where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
The FX options market is the deepest, largest and most liquid market for options of any kind in the world. Most of the FX option volume is traded OTC and is lightly regulated, but a fraction is traded on exchanges like the International Securities Exchange, Philadelphia Stock Exchange, or the Chicago Mercantile Exchange for options on futures contracts. The global market for exchange-traded currency options was notionally valued by the Bank for International Settlements at $158,300 billion in 2005.
Foreign Currency Control
Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.
Common foreign exchange controls include:
a. Banning the use of foreign currency within the country
b. Banning locals from possessing foreign currency
c. Restricting currency exchange to government-approved exchangers
d. Fixed exchange rates
e. Restrictions on the amount of currency that may be imported or exported
Countries with foreign exchange controls are also known as "Article 14 countries," after the provision in the International Monetary Fund agreement allowing exchange controls for transitional economies. Such controls used to be common in most countries, particularly poorer ones, until the 1990s when free trade and globalization started a trend towards economic liberalization. Today, countries which still impose exchange controls are the exception rather than the rule.
Foreign Exchange Committee
Founded in 1978 the Foreign Exchange Committee is an industry group that provides guidance and leadership to the global foreign exchange market. The FXC includes representatives of major financial institutions engaged in foreign currency trading in the United States and is sponsored by the Federal Reserve Bank of New York.
Past Committee members include:
John Spurdle of JP Morgan,
Jeff Feig of Citigroup,
Lloyd Blankfein of Goldman Sachs,
Paul Kimball of Morgan Stanley,
Michael deSa of Deutsche Bank,
Robert Savage of American Express,
Mark De Gennaro of Lehman, and John Key,
The incoming prime minister of New Zealand.
source: wikipedia
Foreign Exchange Trading or FX Trading, clients are able to hedge against, or speculate upon, changes in the exchange rate of two currencies. For example, a speculator can long EUR/USD in foreign exchange market in order to profit from capturing the appreciation of Euro against the U.S. Dollar. Foreign exchange services provide an opportunity for clients to trade FX. Foreign Exchange Trading is done on the foreign exchange market.
Foreign Exchange Spot Trading
Foreign exchange spot trading is buying one currency with a different currency for immediate delivery, rather than for future delivery.
The standard settlement timeframe for Foreign Exchange Spot trades is T+2 days; i.e., 2 days from the date of trade execution. A notable exception is the USD/CAD currency pair which settles T+1.
Foreign Exchange Reserves
(also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. This broader figure is more readily available, but it is more accurately termed official international reserves or international reserves. These are assets of the central bank held in different reserve currencies, such as the dollar, euro and yen, and used to back its liabilities, e.g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.
Foreign Exchange Option
In finance, a foreign exchange option (commonly shortened to just FX option or currency option) is a derivative financial instrument where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
The FX options market is the deepest, largest and most liquid market for options of any kind in the world. Most of the FX option volume is traded OTC and is lightly regulated, but a fraction is traded on exchanges like the International Securities Exchange, Philadelphia Stock Exchange, or the Chicago Mercantile Exchange for options on futures contracts. The global market for exchange-traded currency options was notionally valued by the Bank for International Settlements at $158,300 billion in 2005.
Foreign Currency Control
Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.
Common foreign exchange controls include:
a. Banning the use of foreign currency within the country
b. Banning locals from possessing foreign currency
c. Restricting currency exchange to government-approved exchangers
d. Fixed exchange rates
e. Restrictions on the amount of currency that may be imported or exported
Countries with foreign exchange controls are also known as "Article 14 countries," after the provision in the International Monetary Fund agreement allowing exchange controls for transitional economies. Such controls used to be common in most countries, particularly poorer ones, until the 1990s when free trade and globalization started a trend towards economic liberalization. Today, countries which still impose exchange controls are the exception rather than the rule.
Foreign Exchange Committee
Founded in 1978 the Foreign Exchange Committee is an industry group that provides guidance and leadership to the global foreign exchange market. The FXC includes representatives of major financial institutions engaged in foreign currency trading in the United States and is sponsored by the Federal Reserve Bank of New York.
Past Committee members include:
John Spurdle of JP Morgan,
Jeff Feig of Citigroup,
Lloyd Blankfein of Goldman Sachs,
Paul Kimball of Morgan Stanley,
Michael deSa of Deutsche Bank,
Robert Savage of American Express,
Mark De Gennaro of Lehman, and John Key,
The incoming prime minister of New Zealand.
source: wikipedia
Know the Forward Exchange Market
The forward exchange market is a market for contracts that ensure the future delivery of a foreign currency at a specified exchange rate. The price of a forward contract is known as the forward rate.
Forward Rates
Forward rates are usually negotiated for delivery one month, three months, or one year after the date of the contract's creation. They usually differ from the spot rate and from each other.
What determines the forward rate?
If there is no government intervention on the value of a currency, the forward market will be governed by supply and demand.
In such a case it is possible that the forward rate provides information on the future spot rate, but ultimately uncertain. What is certain is that the forward rates reflect the expectations forward market participants have on the changes of the spot rate during the specified interval. If the forward rate and the spot rate are the same, forward market participants do not expect much change in the price of a currency over the given period of time.
Forward contracts can be used to hedge or cover exposure to foreign exchange risk.
Forward Rates
Forward rates are usually negotiated for delivery one month, three months, or one year after the date of the contract's creation. They usually differ from the spot rate and from each other.
What determines the forward rate?
If there is no government intervention on the value of a currency, the forward market will be governed by supply and demand.
In such a case it is possible that the forward rate provides information on the future spot rate, but ultimately uncertain. What is certain is that the forward rates reflect the expectations forward market participants have on the changes of the spot rate during the specified interval. If the forward rate and the spot rate are the same, forward market participants do not expect much change in the price of a currency over the given period of time.
Forward contracts can be used to hedge or cover exposure to foreign exchange risk.
Shares of Bankrupt Firms?
Buying the shares of a bankrupt firms
Business failures have been running at high rates, and that's a shame. But many investors are finding bargains in bankrupt firms.
They buy up the stocks and bonds of big, bankrupt corporations at distress prices. These speculators hope that the companies will come out of their court-directed reorganizations slimmed down and comparatively dept-free, and that the increased value of their securities will amply reward investors for the steep risks they are taking. Investors' eye glisten at memories of the huge fortunes that were made on such bankrupt companies of the past. Of course, there are investors in bankrupt firms have lost considerable money.
So, bankruptcy investors tend to stick with secured dept. At times they will venture further down the pecking order to buy preferred or common stock. But usually they will do that only after a company has just come out of reorganization, shining with such virtues a clean balance sheet, an accumulation of tax losses that can be carried forward to offset future earnings and a talented management with definite ideas about where it's heading.
Investing in bankrupts is not for the faint of heart or short of pocket. Even situations that look promising often do not pan out. Since the bankruptcy investment game is dominated by the professionals, it would be foolhardy to sit in without coaching from the experts at a brokerage house.
Example:
David Howard Murdock
(born April 10, 1923)
Is an American businessman. Forbes estimates he is the 214th richest person in the world, with a net worth of 4.7 billion US Dollars. A high-school dropout, Murdock was drafted by the U.S. Army in 1943.
In 1985 he took over the nearly bankrupt Hawaiian firm Castle & Cooke, which owned pineapple producer Dole Food Company. He developed Castle & Cooke's real estate portfolio into residential and commercial properties and turned Dole into the world's largest producer of fruits and vegetables.
Dole has generated "negative free cash flow (defined as cash flow from operations less dividends and capital expenditures) annually since 2005, the company remained free cash flow negative during the first half of fiscal 2008"
(Fitch Ratings, July 30th 2008).
source: wikipedia
Business failures have been running at high rates, and that's a shame. But many investors are finding bargains in bankrupt firms.
They buy up the stocks and bonds of big, bankrupt corporations at distress prices. These speculators hope that the companies will come out of their court-directed reorganizations slimmed down and comparatively dept-free, and that the increased value of their securities will amply reward investors for the steep risks they are taking. Investors' eye glisten at memories of the huge fortunes that were made on such bankrupt companies of the past. Of course, there are investors in bankrupt firms have lost considerable money.
So, bankruptcy investors tend to stick with secured dept. At times they will venture further down the pecking order to buy preferred or common stock. But usually they will do that only after a company has just come out of reorganization, shining with such virtues a clean balance sheet, an accumulation of tax losses that can be carried forward to offset future earnings and a talented management with definite ideas about where it's heading.
Investing in bankrupts is not for the faint of heart or short of pocket. Even situations that look promising often do not pan out. Since the bankruptcy investment game is dominated by the professionals, it would be foolhardy to sit in without coaching from the experts at a brokerage house.
Example:
David Howard Murdock
(born April 10, 1923)
Is an American businessman. Forbes estimates he is the 214th richest person in the world, with a net worth of 4.7 billion US Dollars. A high-school dropout, Murdock was drafted by the U.S. Army in 1943.
In 1985 he took over the nearly bankrupt Hawaiian firm Castle & Cooke, which owned pineapple producer Dole Food Company. He developed Castle & Cooke's real estate portfolio into residential and commercial properties and turned Dole into the world's largest producer of fruits and vegetables.
Dole has generated "negative free cash flow (defined as cash flow from operations less dividends and capital expenditures) annually since 2005, the company remained free cash flow negative during the first half of fiscal 2008"
(Fitch Ratings, July 30th 2008).
source: wikipedia
Stock Market Tips
Do you want an Inside Tips on the Stock Market?
Tips are most likely the trend others need before starting of any kind of business, most likely on stocks. Well then, watch for those times when high executives buy or sell shares in the company they work for. Information on such insider trading is easy to find and simple to use.
When officers of the company trade its stock, they often know something you don't know, and their deals have to be reported to the Securities and Exchange Commission. When they buy a lot of their own stock, it usually does much better than the market averages.
When insider sell, watch out. Heavy sales by insiders preceded many of the market's disaster. at the end of that year, insiders were selling four times as many stocks as they bought. Sure enough, despite many predictions.
Thus, when you see heavy significant insider selling of a stock, consider cashing in your own shares in the company. the situation is particularly dangerous when insider selling suddenly increases after a stock has started to decline. You can protect yourself by leaving a standing order with your broker to sell your stock if and when it declines a few points. That way, if disaster does strike, you can scape with limited damage. That doesn't mean you have to stay out of the market. It's a good time to look at the stocks those knowing insiders have been buying.
You can follow the trading of high company officers by subscribing to news letters that follow the subject.
related articles:
Real-Time Stock Symbol Tweets
Real-Time Stock Market Tweets
Real-Time Stock Symbol News
Crude Oil
Commodities and Futures
World Market Watch
Tips are most likely the trend others need before starting of any kind of business, most likely on stocks. Well then, watch for those times when high executives buy or sell shares in the company they work for. Information on such insider trading is easy to find and simple to use.
When officers of the company trade its stock, they often know something you don't know, and their deals have to be reported to the Securities and Exchange Commission. When they buy a lot of their own stock, it usually does much better than the market averages.
When insider sell, watch out. Heavy sales by insiders preceded many of the market's disaster. at the end of that year, insiders were selling four times as many stocks as they bought. Sure enough, despite many predictions.
Thus, when you see heavy significant insider selling of a stock, consider cashing in your own shares in the company. the situation is particularly dangerous when insider selling suddenly increases after a stock has started to decline. You can protect yourself by leaving a standing order with your broker to sell your stock if and when it declines a few points. That way, if disaster does strike, you can scape with limited damage. That doesn't mean you have to stay out of the market. It's a good time to look at the stocks those knowing insiders have been buying.
You can follow the trading of high company officers by subscribing to news letters that follow the subject.
related articles:
Real-Time Stock Symbol Tweets
Real-Time Stock Market Tweets
Real-Time Stock Symbol News
Crude Oil
Commodities and Futures
World Market Watch
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