AGENDA Tues 3/13 & Wed 3/14 AND Thurs 3/15 & Fri 3/16

Walmart conclusion QOD #21: Eenie-meanie-minie-moe Review Market Org Quiz Review Stock Market Game Stock Markets Wizards of Wall Street Midterm Review HW: pg 631 #1-5 DUE: Thurs 3/15 & Fri 3/16

Stock Watch: Portfolio Printout #2: DUE 3/19 & 3/20 Study for Midterm Mon 3/19 & Tues 3/20

QOD #21: Eenie-meanie-minie-moe

Some might advise that in order to be a wise investor, one should tend to avoid complex investments that they do not fully understand. Explain why you agree or disagree with this advice. What would be the advantage to ignoring the advice? What would be the advantage to heeding the advice?

What are Stocks? A stock is a claim

on the assets of a corporation

that gives the purchaser a

share in the corporation. A dividend is a payment from the corporation

to the shareholders. It is the portion of corporate profits. When a corporation earns a profit or surplus, that money

can be put to two uses: re-invested in the business paid to the shareholders as a dividend

Stock exchanges where stocks are traded.

New York Stock Exchange (NYSE)

11 Wall Street, Manhattan, New York (a.k.a. Broad St.) Started as a meeting of 24 men in 1792 Became NYSE in 1863

1,366 membership (seats) Must be a member to trade stocks listed w/ this exchange Membership seats may cost as much as $2 million.

3,600 of the largest, most profitable companies

National Association of Securities Dealers Automated Quotations (NASDAQ)

Established in 1971 Electronic stock market (over-the-counter) 3,800 companies

Trades more stock shares than NYSE

American Stock Exchange (AMEX)

Started in 1842 on the curb near Broad Street Traders started using hand signs to communicate 1921 moved indoors 1953 called the New York curb Exchange

Traded more speculative stocks Penny stocks

1998 AMEX merged with NASDAQ NYSE Euronext acquired AMEX in 2008 In 2009, renamed to NYSE Amex Equitties

Dow Jones Industrial Average (DIJA)

Referred to as the “Dow”Developed in 1896 by Charles Henry Dow who

took 11 stocks and summed their prices. Average today is not a simple computation but

a special formula to avoid certain distortions in the market.

Today the DOW consists of 30 stocks.The DOW is devised to convey some information

as what is happening in the market and to avoid rumor.

Indexes that cite stock information DOW Standard &

Poor’s (S & P) NASDQ

composite Hang Seng- Hong

Kong Nikkei 225 in

Japan Shanghai

Composite in China

How does the stock market work?

Stocks are sold by companies wanting to raise money. People invest in companies by “buying” stock. Usually requires an initial deposit into account ($1000-2500)

The first offering of stock to the public is called and initial public offering (IPO).

Stock prices rise and fall according to demand and supply.

Benefits of stocks?

Dividends- payments in the form money from the share of profits a corporation has distributed to the stockholders.

$$$ stocks are an investment for the long-run. Money should not be borrowed to invest.

Richest person in the world?

Who is the richest person in the world? Bill Gates Warren Buffet Mukesh Ambani Lakshmi Mittal Carlos Slim Helú

#1 Carlos Slim Helú- investor

Began investing in stock & real estate VP of Mexico’s stock exchange Purchased TELMEX 1996-98 Privatized Mexico’s telephone company Est. net worth - $69 billion

#2 Bill Gates—Entrepreneur Former CEO of Microsoft (2000) Chairman of Board, owning 8% (largest stockholder)

Heads Bill & Melinda Gates Foundation (2008 left Microsoft duties)

Est. net worth = $61 billion

#3 Warren Buffet- investor He is the CEO (Chief Executive Officer) and largest

stock holder of Berkshire Hathaway. He will gradually give away 85% of his money to the

Bill Gates foundation. "I want to give my kids just enough so that they

would feel that they could do anything, but not so much that they would feel like doing nothing.“

Est. net worth = $44 billion

Dow QuizDow Quiz

How many people formed the original How many people formed the original company of Dow Jones?company of Dow Jones?

How many stocks were listed in the original How many stocks were listed in the original index?index?

What was the publication that included the What was the publication that included the Dow Jones index?Dow Jones index?

What was one of the outside forces What was one of the outside forces discussed that had an impact on the stock discussed that had an impact on the stock market?market?