...Six months ago I wrote a report titled “How to Hack the Stock Market”. The report is just 62 pages long but it explains a specific stock market loophole I use to make roughly $10,000 a month. After first writing the report I sold it to experienced traders from an online investing community. Within weeks some of the traders were exploiting the loophole and making thousands of dollars. Because of that success I decided to create this website and sell the report online. I apologize for the short quiz I just had you fill out... I only want to teach this strategy to those who will actually put it to use. If someone couldn’t answer those simple questions, they will not have the drive or motivation to make this work. I could write a killer ad for my report. I could fill it with testimonials from successful students and even show you proof of my earnings. But I’m not going to do that – I hate those late night infomercials more than anyone else I know. Instead, I’m just going to let you read Chapter 1 of my report. (I’ve reproduced it below). But first, I need to tell you something. Some of my friends and clients laugh at the title of the report. I mean, I admit "How to Hack the Stock Market" is a little kitsch. But I called it that because... My report won't teach you about "life". I'm not gonna bore you with mindless drivel about personal finance and achieving your dreams. If you want that stuff buy 'Rich Dad Poor Dad'. Or any of the other "get rich quick" books...
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...Abstract This paper is going to reflect how I choose to fund my business (or company). There are a few ways to raise money: Selling stock, licensing the product, and taking out loans. I will also be describing the who, what and how of each of the following: Investment Banker, Stock Market, Financial Management, and Risk Financing. I will share with you my preferred source of funds, and I’ll explain to you the risks and rewards of what I have decided to do, as it will help you better understand my thought process. Ways To Fund A Business An “Investment Banker” is either an individual or a company that acts as a representative for other companies or governments issuing securities. They can also hold brokerage or dealer jobs as well. They also act as financial advisors to the companies that they represent, as well as take a huge part in mergers, acquisitions and restructurings of businesses. They do not accept deposits from individuals or give out loans to individuals, only businesses. The “Stock Market” is a general term for stock trading over the counter and via exchange. The Stock Market is based on Wall Street in Downtown Manhattan. It contains the Dow Jones (DJIA), this is the one that is used on a regular basis as an indicator of the economy, there are many other exchanges as well. Our Stock Market is based on the other stock trades in the world, for example if the NIKKEI (Japanese) market drops, generally the US Market will fall as well. Our economy is...
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...BUS320 April 23, 2014 The Little Book That Beats The Market The book entitled, the Little Book That Beats the Market, is essentially a beginner’s guide to investing. Author Joel Greenblatt begins the book by breaking down the stock market into the most basic form. His goal was to explain it in a way that could be understood and followed by all five of his children, ages 6 to 15. He begins by using an example of a sixth grade boy named Jason selling sticks of gum for 25 cents apiece. If each pack of gum has five pieces, Jason will be making $1.25 per pack. If Jason only paid 25 cents per pack, he will be making a profit of $1 per pack! Greenblatt takes this even further and estimates that if Jason sells 4 packs every school day (Monday through Friday), Jason will be making $20 a week. After doing further calculations, Greenblatt and his son figure out how much Jason could make if he sold 4 packs of gum every day until he graduated the 12th grade. By using this information, Greenblatt puts a value on Jason’s business and asks the reader how much they would pay for Jason’s business. He uses the idea of Jason’s business throughout the rest of the book. Every new concept that Greenblatt introduces, he comes back to Jason’s business and gives an example of how that concept could relate to Jason’s business. This gives the reader an easy understanding of how the different concepts that Greenblatt discusses affect certain businesses. Throughout the book, Joel Greenblatt...
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...What is economic? Economic is a study of how people make choices among the alternatives. Since the resources that are available to world are very scarce, it is important to study economic in order to make the best choice that can maximize the total profits. Real life cases are the best examples for studying economic concepts. In this paper, there are three real life cases that illustrate economic concepts base on the Case in Point boxes from the Course Reader. The first case will define the economic concepts: choice, scarcity, and cost. The second case will describe how the stock market puts supply and demand to work. The last case will present the effects can be caused by private and external costs. Case in Point: Chapter 1.1-Defining Economics; Section 1-Scarcity, Choice, and Cost What Is Wrong With The Oil Productions? Why is oil harmful? Petroleum or oil had come to the existence about four thousand years ago. Oil is now one of the required resources for every day's activities. For instance, products like mechanical engines, cars, cooking, tar for roads, etc. needs oil to function. Even though oil has many choices of how it can be produced, it is a scarce resource. As a scarce resource, oil is very limited and cannot be reproduced or recycled. As a result, there are many opportunity costs for producing oil. For instance, one of the opportunity costs for producing oil is a healthy environment. Additionally, money is the most costly opportunity cost for the oil production...
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...From Efficient Markets Theory to Behavioral Finance 1. What does Shiller mean by Behavioral Finance? Behavioral Finance is the collaboration between finance and other social sciences. This field of research is focused on determining the precise degree to which various market forces—including rational analysis of company-specific and macroeconomic fundamentals; human and social psychology; and cultural trends—influence investors’ expectations and determine their level of confidence or fear. Behaviorists believe that at times, the real determinants of stock market movements are the forces of human and cultural psychology, oranimal spirits (a term coined by economist John Maynar 2. How does Behavioral Finance contrast with Efficient Market Theory? Behavioral finance takes issue with two crucial implications of the EMH: (1) that the majority of investors make rational decisions based on available information; and (2) that the market price is always right. Behaviorists believe that numerous factors—irrational as well as rational—drive investor behavior. In sharp contrast to efficient markets theorists, behaviorists believe that investors frequently make irrational decisions and that the market price is not always a fair estimate of the underlying fundamental value. Still, many proponents of behavioral finance agree with at least one implication of the efficient market theory—that it’s not possible to reliably earn abnormal returns. 3. What prediction does Efficient...
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...Q1: What role do market makers play in the trading system? How do they profit from this role? How do the market makers compete with one another? A1: a. What role do market makers play in the trading system? The market makers play an important role in the trading system as catalysts, particularly for enhancing stock liquidity and, therefore, for promoting long-term growth in the market. In detail, they played two roles as below: 1) They act as brokers handling the limit order book, where limit and stop order are maintained. 2) They act as dealers by buying and selling stocks for their own accounts to maintain an orderly market and provide liquidity to the market if there is an inadequate order flow. b. How do they make profit from this role? A market maker makes money by buying stock at a lower price than the price at which they sell it, or selling the stock at a higher price than they buy it back. Ordinarily they can make money in either rising or falling markets, by taking advantage of the difference between "bid" and "offer" prices. c. How do the market makers compete with one another? 1) Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from his own inventory or seeks an offsetting order. 2) Market makers also compete against each other to post the best prices, and the prices they offer which are available, in...
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...Shanghai Stock Exchange Financial Market Report Guidance: Mikel Tapia Miguel Teixeira Pinto Navkaran Bakshi 1 Universidad Carlos III – Master in Financial Analysis Introduction Regarding the subject Financial Markets, we will analyze the Chinese Stock Market and understand how it works. In that sense, with the support of Professor Mikel Tapia, we will study the type of Market that we are leading with, which type of brokers belong to this Market and all the other rules that we think that are relevant to the Shanghai Stock Exchange and to the Investors that work with this Market. So, first and to contextualize, we will start with an explanation of the Stock market with some relevant historical information. In this brief introduction, we will approach the information related with the creation of the Market and the modifications that it suffered during the years. After this deep analyze, we will pass to the descriptive analyze where we will try to explain and understand how the Market is Operating. 2 Universidad Carlos III – Master in Financial Analysis Market History The Shanghai Stock Exchange is based in the city of Shanghai, China. It was inaugurated in November 1990 and is wholly state-owned with a Market Capitalization of $2.3 trillion making it the World’s 6th largest stock Market. It is one of the two Stock Exchanges operating in China (Shanghai Stock Exchange and the Shenzhen Stock Exchange), although they are not cross-linked and the stocks listed...
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...logbook to identify each member’s contribution to the group work. After reading this article “How does the stock market affect the economy?” it is obvious that the main topic of this article is about the stock market and how it affects companies and households. There are two main ideas of the article which I will summarize in this paragraph. Stock price declines, especially those induced by profit warnings, increase shareholder pressure on managers to cut costs by laying off workers and scaling back investment. Second, a large stock price decline reduces the value of unexercised stock options, which falls as the gap narrows between a company’s stock price and the price at which workers can buy stock under an option. Third, the factors dragging down stock prices, such as a weaker or more uncertain profit outlook, may spur investors to demand higher risk premiums, which boosts the cost of financing business investment. A fourth way lower stock prices affect firms is that they will have less incentives to invest in new capital if there is a fall in the ratio (q) of the cost of buying existing capital to that of buying new capital. Lower stock prices are correlated with greater uncertainty and lower confidence, particularly because layoffs typically increase during such periods. Second, stock price changes affect consumer spending through a wealth channel. Some criticisms about these channels are that the stock market is merely to raise expectations about the future, another criticism...
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...Efficient Market Discussion and Understanding of Finance As the 2013 Nobel Laureates in economic science, both of Eugene Fama, from the University of Chicago and Robert Shiller, from Yale University, have made famous contribution to the finance world. Even though their views toward market efficiency seem mutually contradictory, their theories has been highly valued by the finance academia as well as industry. This paper compares and contrasts the work of both of them and discusses how their work influence my understanding of finance. Fama is known for his work in initiating and developing the “efficient market hypothesis (EMH).” In his paper, Fama defines “efficient market” as “a market in which prices always fully reflect available information” (Fama 1970). If prices did reflect all available information, trading rules and fundamental analysis would not help investors to constantly earn abnormal return. This proposition has been checked by others and himself in the following papers: "Random Walks in Stock Market Prices (Fama 1965)," and "Filter Rules and Stock Market Trading Profits" (Blume, Fama 1966). Stock prices react to new information so quickly that it is almost impossible to trade on that piece of new information and profit from it. Furthermore, investors cannot earn abnormal returns without taking more systematic risk. To address the different types of information that stock prices could reflect, Fama prosed three types of market efficiency: (1) strong-form, where...
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...forced at a work you dislike are some signs that you are financially secured. Reaching a point of financial security is a progress that takes time, effort and some sacrifices. After all the sacrifices you made, the results are worth it. On an article of Howard University entitled “Starting on the Road to Financial Security” said that reaching financial security is like building a house. You start with a foundation, you add the floors as you go on, you put on a roof, you finish the inside and then you move in. For most people, the only way to attain financial security is to save and invest over a long period of time. You just need to have your money work for you and that’s what you call investing. You become an investor when you put your money into things that can grow in value. You can invest your money in term deposit, the safest kind of investment that most people are more likely to be engage with. This kind of investment are very appealing to conservative, low risk investors because of the fact that there is no risk of losing your money. But wait, do term deposits give you a big return from the money you invested after waiting a long period of time? If you are a type of person that can accept a higher risk, you can invest your money in a stock market. In the financial market, stock refers to a supply of money that a company has raised. It comes from people who have given the company money in the hope that the company will make their money grow. The shares of stock are bought...
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... |RESEARCH METHODOLOGY |3 | | | | | | |PART I | | | | | | |I |BASIC |4 - 7 | |II |STOCKS |8 - 11 | |IIII |INVESTORS |12 - 14 | |IV |INVESTING |15 - 21 | | | |...
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...1. How Goldman makes money Part 1 and Part 2? Goldman by its size and political connections enjoys many advantages you and I can only imagine. Like the insurance companies who collect interest on premiums paid while waiting months to pay health providers for services delivered today they profit on “the float”. Their size allows them to create runs in markets, shoring commodities floods the market and creates downward pressure through supply and demand, and then when the price drops they cover the short. Selling something they do not own and then filling the hole when the price is less. The question is not how do they make money, but rather how could they not profit in a system designed, and run by them. You could profit too if the government gave you money for free then paid you interest to loan it back to them. 2. JP Morgan Chase Company Profile? JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is a global financial services firm and a banking institution in the United States, with global operations. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, assets management and private equity. Bear Stearns was acquire by JP Morgan at $10 dollars a share. The government grantee $100 billion of loss. 3. Wall Street trader’s NYSE Trading Floor Tour How a broker works on the NYSE...
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...Bio Advertisement No matter how much we diversify our investments, it's impossible to get rid of all the risk. As investors, we deserve a rate of return that compensates us for taking on risk. The capital asset pricing model (CAPM) helps us to calculate investment risk and what return on investment we should expect. Here we look at the formula behind the model, the evidence for and against the accuracy of CAPM, and what CAPM means to the average investor. Birth of a Model The capital asset pricing model was the work of financial economist (and, later, Nobel laureate in economics) William Sharpe, set out in his 1970 book "Portfolio Theory And Capital Markets." His model starts with the idea that individual investment contains two types of risk: Systematic Risk - These are market risks that cannot be diversified away. Interest rates, recessions and wars are examples of systematic risks. Unsystematic Risk - Also known as "specific risk," this risk is specific to individual stocks and can be diversified away as the investor increases the number of stocks in his or her portfolio. In more technical terms, it represents the component of a stock's return that is not correlated with general market moves. Modern portfolio theory shows that specific risk can be removed through diversification. The trouble is that diversification still doesn't solve the problem of systematic risk; even a portfolio of all the shares in the stock market can't eliminate that risk. Therefore...
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...in various ways including stock quotes, corporate press releases, financial reports, stock exchange rates as well as popular message boards for discussing a company's forecasts and stock valuations. It holds the title for the top financial news and research website in the United States, with an astounding 23 million visitors in February 2010. It also offers tools for personal finance management. Yahoo! Finance includes similar portals identified to diverse large countries in South America, Europe, and Asia. Yahoo! is one remarkable website that is not only a favorable site for people linked with finance but is fairly easy to navigate. Anyone from experts who are tech-savvy to beginners who are just exploring the world of technology will able to find the most up to date and beneficial information regarding finance and investment with this website. There are many practical tools such as currency calculators, and a finance glossy that will help you uncover the world of finance and even personal investments you may be interested in. This site offers information in personal finance, latest news and of course investing. These sections are then sub-divided into additional categories that will help fulfill your curiosity in finance. Beginners especially will be excited to learn and understand the concepts of the finance market more properly. A few helpful sections beginners can take a glance at are, market overview, and market statistics, investing ideas, stocks, bonds and mutual funds...
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...Forecast Stock Market Prices Abstract This paper is a survey on the application of neural networks in forecasting stock market prices. With their ability to discover patterns in nonlinear and chaotic systems, neural networks offer the ability to predict market directions more accurately than current techniques. Common market analysis techniques such as technical analysis, fundamental analysis, and regression are discussed and compared with neural network performance. Also, the Efficient Market Hypothesis (EMH) is presented and contrasted with chaos theory and neural networks. This paper refutes the EMH based on previous neural network work. Finally, future directions for applying neural networks to the financial markets are discussed. 1 Introduction From the beginning of time it has been man’s common goal to make his life easier. The prevailing notion in society is that wealth brings comfort and luxury, so it is not surprising that there has been so much work done on ways to predict the markets. Various technical, fundamental, and statistical indicators have been proposed and used with varying results. However, no one technique or combination of techniques has been successful enough to consistently "beat the market". With the development of neural networks, researchers and investors are hoping that the market mysteries can be unraveled. This paper is a survey of current market forecasting techniques with an emphasis on why they are insufficient and how neural networks...
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