GI Beginners’ Series: Class II November 15, 2007

Class I Review Exponential Nature of Growth Concept of a Stock  Represents ownership  Investor: Access to dividends and future earnings  Company: Access to more capital What Make Stocks Move  Company-specific  General market-movers

Class I Review Market Structure  Exchanges, Sectors, Industry Groups  Indices Terminology  Market Sentiment  Types of Positions  Stock Classifications

Supply-Demand Influence on Prices

General Dynamic  Supply increases or Demand decreases Price decreases  Supply decreases or Demand increases Price increases Stock Dynamic  More buyers than sellers Price increases  More sellers than buyers Price decreases

Buying/Selling Pressure Stock Price Increase  Buyer’s (Bull) Market  Implies optimism Stock Price Decrease  Seller’s (Bear) Market  Implies pessimism Strength of Increase or Decrease  Day’s Volume vs. Average Daily Volume

Reading Stock Quote Why Bother  Quick snapshot  Pertinent information without excessive research Components  Last Trade, Change, Bid, Ask  Open, Close  High, Low  Market Cap  Volume, Average Volume

Price-to-Earnings Ratio How much, per $ of earnings, investors are willing to pay for each share P/E Ratio  Based on latest earnings report Forward P/E Ratio  Based on forecasted earnings

Price-to-Earnings Ratio Implications Growth Stock  High P/E Ratio Forward P/E > P/E  Lower earnings forecasted Forward P/E < P/E  Higher earnings forecasted

Reading Stock Quote Free websites:  

GI | Fantasy Stock Market Game SIGN UP TODAY! 1. Go to 2. Create an account 3. Find our game by going to “Join a Game” on the left menu bar 4. Click on “Advanced Search Page” 5. Type in “G Investors” in Search box 6. Select the game and enter “investors” for the password Any Questions, please LearnLink me Game Name: G Investors Password: investors

GI | Fantasy Stock Market Game Rules  Start with $10,000  Game ends on May 30, 2008  Long-Short Only  No Options  Margins Allowed  Highest Percentage Gainer receives $$$

Class 3: November 29 Fundamental Analysis Market Forces  GDP, Oil, Inflation  Beta Executing Trades Online