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Investing in Russia
  Investing in Russia has gotten really widely promoted for the last period. I can remember the talks that stocks in Russia are the cheapest over the world for not less than year. The fact, that those stocks are st
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The Most Known Investors: Who are they?
  Regularly, a magazine is releasing its top 100 billionaires of the world. These are the investment giants and the masters of investing.  We all know that the investing world is a world of strategies and the
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Investment Adviser
  Investment advisor/adviser does the same jog as investment consultant does. But investment advisor is a term used by the Securities and Exchange Commission (SEC). So usually investment advisor refers to a company
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Share
  A share is a unit of firm’s ownership, which represents the rights and obligations of the shareholder (owner of the shares). If investor owns all shares of the company he is a complete owner, but if he
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Shareholder
  A shareholder (stockholder) is a individual or company that owns some shares of stock in a corporation. Technically, every investor who is investing in shares is a shareholder for as long as he holds those s
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Investor
  An investor is an individual or corporate unit that invests in any class of investments on purpose to earn some return from invested capital. There may be more criteria to distinguish very small investments
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share Investor
  A share investor is an investor who invests in shares (stocks) but not the other investments. If investor invests in different asset classes he is a regular investor. If investor is specializing in shares he must
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Stock Split
  A stock split is a divide of existing company’s shares decreasing its face value. For every owned share an investor gets a several (or one) additional shares depending on split ratio, and the total out
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Reverse Stock Split
  Reverse stock split is a merge of existing company’s shares increasing its face value. For several owned shares an investor gets one share depending on reverse split ratio, when total outstanding shares num
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Book Value of Share
  A book value of share is calculated dividing all company’s book value (less preferred equity) by its common share number. For example, if company’s book value is 1,000,000 USD and issued share nu
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Stock Book Value
  Stock book value is a book value of one share. It is calculated dividing shareholders equity by share number and gives some very approximate investing guidance about the value of the stock. It is popular to look
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Dividends
  Dividends are capital payments from companies to theirs shareholders. Normally dividends are paid by cash and usually but necessary once a year. Every company’s common share of the same class gets equal div
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Dividend Yield
  A dividend yield is a ratio that shows how much investor gets dividends from the stock compared to its price. It is calculated dividing dividend per share by the share price.    Dividend yield is impo
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Ex-Dividend Date
  Ex-dividend date is a first day when investor does no longer receive dividends paid by company’s shares. This is important factor because the period of shares' settlement after transacti
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Stock Buyback
  A stock buyback (share repurchase) is a company’s purchase of its own stock on the market. It is contrary way to pay out capital for shareholders to dividends. Stock buybacks are getting more and more
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Initial Public Offering (IPO)
  An initial public offering (IPO) is a first introduce of company’s shares to the stock market. However, during initial public offering shares are sold not on the stock exchange but on network of clients by
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Greenshoe
  A greenshoe is an option to sell or buy shares during initial public offering IPO. This option is agreed between the company that goes public and the IPO organizer (some corporate finance firm).   The
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Market Capitalization
  Market capitalization (market cap) is a company’s value (price) on the stock exchange. Market capitalization is calculated by multiplying the outstanding share number by the last share price on the exchange
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Investment Report
  An investment report is a for investors prepared document on purpose to provide useful and objective information that would help to make an investment decision.     Investment report may have many for
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Penny Stocks
  Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc
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Growth Stocks
  Growth stocks are stocks of companies which earnings per share grow faster than average on the market. Such is theory, but if look in practical side, earnings grow faster most of the times only when economical cy
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Holding Company
  Holding company is a type of a company which main activity is to invest in other companies. Holding as itself does not do any activity instead of managing their subsidiary companies and searching for new investme
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Mortgage Bond
  A mortgage bond is a bond that has some collateral to make the security safer as investment. In case of bond default the creditor gets back his money or part of it from the sale of the assets that were pledged. U
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Financial Leverage
  A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
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Valuation Multiples
  Valuation multiples are stock ratios that include in the calculation share price and show whether stock is cheap or expensive compared to similar stocks.     Valuation multiples (or just multiples) ar
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P/E Ratio
  P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im
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P/B Ratio
P/B (P/Bv or price-to-book) ratio shows how expensive stock is compared to its books value. Company’s book value (also called equity, capital, shareholders funds etc.) is equal to company’s total assets les
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P/S Ratio
Price to Sales Ratio   P/S ratio shows the price of the stock compared to its sales. This ratio historically was quiet popular, but now EV/S ratio, which is more correct methodically, is used.   
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DCF Valuation
Discounted Cash Flow Analysis   DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t
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Earnings Per Share
  Earnings per share (EPS) shows how much of net earnings are allocated to one common share. EPS might give some guidance about the value of the share for shareholder. share price compared to EPS is equal to P/E ra
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Profit Margin
  Profit margin normally refers to net profit margin, which is net profit divided by sales. But one should remember that profit might be of different kinds (net profit, pretax profit, EBIT, EBITDA and gross profit)
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ROA
  ROA (Return on Assets) shows what profits are earned by company’s assets. Of course, assets alone usually do not earn the profit, because most of the times profit is the result of know-how and hard work of
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M&A
  M&A (mergers & acquisitions) is a field of corporate finance in which corporations are acquiring other companies or are merging in between. Theoretically it doesn’t sound very impressive, but in rea
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Poison Pill
  A poison pill is one of the strategies used to avoid hostile takeover. Poison pills are some rules in company’s charters that give some extra rights for corporation. Poison pills may be rights to acquire mo
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Par Value
  Par value also is called face value or nominal value, and is a nominal amount of money that shows how much of money is related to the security nominally. Par value is used most commonly for two types of securitie
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Outstanding share Number
  Outstanding share number is an important characteristic for the stock value of every stock company. This number represents all the issued shares in the company except the shares that are held by the company itsel
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Voting Right
  A voting right is a right provided by every common stock to participate in a shareholders’ meeting and vote for the decisions as management election, audit company election and other important questions. Us
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Stock Price
  A stock price is the last price of a share (stock) that was traded in a stock exchange for a particular stock. If stock exchange is closed at the moment, then the last stock price will be closing price for that s
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Brokerage Account
  Brokerage account is an account provided to investor by a brokerage company or an investment bank. Brokerage account has changed during computerization and now almost all brokerage accounts have electronic interf
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Balance Sheet
  Balance sheet is one of the three main financial statements (others are income statement and cash flow statement). Balance sheet also might be called a statement of financial position because this statement expla
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Solvency
  Solvency analysis takes an important part in financial analysis and mostly is used by creditors. Creditors of the business (bondholders, banks that provide loans) don’t care much if company’s profit w
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Turnover Ratio
  (1) Turnover ratio of mutual fund shows how quickly assets of the fund are changing. Actively managed investment funds have higher turnover ratio than passively managed funds, and normally turnover ratio is measu
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Financial Forecasting
  Financial forecasting is a part of financial planning and also a part of a DCF valuation. But usually financial planning covers only a period of year or two while financial forecasting regularly covers about five
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Strategic Financial Planning
  Strategic financial planning is a bit different from standard financial planning because standard financial planning focuses on a budget which is detailed estimation of financial statements when strategic financi
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Investments in Small Cap Stocks
  Investments in Small Cap Stocks Investments in small cap stocks could be compared to penny stock investments but the term ‘penny stocks’ is not specific enough. The thing is that the determination of
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Earnings Estimate
  Earnings estimate is a forecast for income of the closest future period. Earnings estimate usually is calculated by the employees of analyzed company or analysts of other financial companies. Normally, earnings e
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Investment Formula
  If you are looking for some perfect investment formula, you should get disappointed because there is no secret investment formula that would be profitable for every investor. If there would be such perfect formul
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share Issue
  share issue may refer to a new share issue or an existing one. An issue of new shares is associated with capital increase of a company during IPO (initial public offering) or SPO (secondary public offering). All
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Capital Adequacy Ratio
  Capital adequacy ratio is the main financial ratio for banks to measure whether the bank has enough of capital on which depends the riskiness of the bank. Banks are borrowing money from other depositors and it is
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Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.  
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