1. Welcome! October 11, 2010

2.  Stock ownership  Dollar Cost Averaging  Diversification  Choosing a broker

3. Stock Definition Dollar Cost Averaging Advantages and Disadvantages Funds

4.  Share of Stock: A security representing fractional ownership in a firm and a claim on its net assets and earnings.  Value of stock changes with market  Voting rights  Do many things with stocks: Buy (hold long positions) Sell Short selling (short position) Cover short More on this later…

6.  An investment strategy where you put equal amounts of money into an investment periodically  Purchase more shares when prices are low, and less shares when prices are high – overall increase in portfolio value

7.  A collection of stocks, other equity and debt instruments  Can track a particular index (such as the Dow Jones or S&P 500)  Diversification “It’s the only free lunch”

8.  Guaranteed market rate of return  Diversified  Low expenses  Usually tax efficient  Easy to build a portfolio based on your risk tolerance  Management Fee 2% or more per year Lower for ETF’s

9.  Higher minimums  Better for small, frequent purchases  Only priced and traded at the close of the day  Examples: Vanguard Fidelity Blackrock Janus

11. Business Analysis Accounting Analysis Financial Analysis Valuation Valueline

12.  Procter & Gamble Competitive advantages? Brand names? Ability to raise prices with inflation? Economic moat? Industry and type of product? Consistency?

13.  Do the firm’s accounting policies reflect the business reality of the firm?  If not, we must make adjustments  More on accounting analysis later. Yes, it needs its own week (or two…)

14.  Balance Sheet: A list of the things owned and owed by the firm and the difference between the two  Income Statement: A list of the resources acquired and consumed by a firm over a period of time  Cash Flow Statement: A list of the flows of cash in and out of a company over a period of time

16.  Good starting point  Usually a reliable source for objective data aggregated in a consistent format  It’s generally a good idea to ignore Value Line’s predictions (or any analyst predictions for that matter)

17. Accessible via OSU libraries and ccig.osu.edu.

18.  Now that we know the basics of a company, how do we open an account to trade?  MANY options…

21.  Great for long term investors  Active Trader Pro highly rated…. But you have to actually be an active trader  Certain parts of the website still update overnight rather than realtime

22.  For functions you get (great for international) you don’t pay as much  Professional and semiprofessional traders Workstation difficult to handle  Limited personal Service

23.  Previous year’s winner (Barrons)  Geared for very active traders  Deep historical database and many tool kits Over 500 fundamental fields  Big downside 99.95 per month access fee

24.  Integrated charts with very fast trade executions over many markets  Many preset trading strategies for new- comers  Trade from a browser rather than software Smartphone trading platform fairly robust.

25.  My personal favorite, as well as Barron’s  Great customer support  Very innovative  Zero downtime in 2008  Extensive, robust trading platform Tons of tools… watch live CNBC… community  Biggest drawback – acquired by TD Ameritrade. Yet to see any real detrimental effect

27.  $20 to become member Free pizza and pop every Monday Various handouts throughout year Eligible:  Attend CCIG events

28.  Businesses coming to OSU Currently in contact  Wall-St Training Nov. 20/21  Chicago Visit Spring Quarter  Most active members are rewarded at EOY

29.  Wall Street Journal (IT’S FREE)  CCIG Library: The Intelligent Investor by Benjamin Graham The Dhando Investor by Mohnish Pabrai Security Analysis by Benjamin Graham Common Stocks and Uncommon Profits by Philip Fisher One Up on Wall Street by Peter Lynch Monkey Business by John Rolfe When Genius Failed by Roger Lowenstein Profits from the Peak by Brian Hicks

30.  Discuss individual valuations of stocks How do you put a price tag on an investment?  Advanced: Options Hedging strategies Short selling Discounted Cash Flow