Spongetech Stock Quote Ticker: SPNG Last: 0.17 High: 0.17 Low: 0.15 Volume: 55819656

Danilo Quinonez What I Learned in the Stock Market Today: investing in Penny Stocks is like High School - lots of drama and He said, She said; 1000%+ gains are plausible, but unreasonable - take incremental profits. If it is evident that irrational exhuberance has unduly escalted a company’s value - get the hell out! If you don’t want to do proper due diligence - buy scratch tickets instead.

Understanding Stock Quotes

Open: The US stock markets are officially ‘open’ for trade from 9:30 AM to 4:00 PM EST Monday through Friday on most days. Open is the price of the stock at 9:30 AM on an open trading day. In between the close and open are ‘after hours’ (4:00 - 6:30 PM EST) and ‘pre-market’ (8:00 - 9:30 AM EST) trading. Trading that goes on during these times often will impact the open price.

Prior Day’s Close: The price of a stock at the close (4:00 PM EST) of the previous trading day. Note that the prior day’s closing price may not necessarily equal the next day’s open price, as there is after hours and pre-market trading in between the two.

High: The highest price that the stock has traded for during the most recent trading day.

Low: The lowest price that the stock has traded for during the most recent trading day.

Volume: The number of shares of that stock that have traded hands during the most recent trading day. This is an important metric that measures how easily (liquidity) a stock is traded. If volume is high, it is easy to trade shares. If volume is very low for a stock, it may be much harder to buy and sell a specific amount of shares at exactly the price you would like.

Avg. Volume: This is a measure of volume over an extended time period - usually one year. This metric is used to compare to volume in a given day. If volume is relatively high versus the average volume, it may indicate noteworthy news regarding the company that would result in a higher level of trading.

Market Cap (Capitalization): A dollar amount that equals the share price multiplied by the number of outstanding shares. Relatively, stocks are considered large cap if they have a market cap of $10-200 billion, mid if their market cap is between $2-10 billion, and small if the cap is between $500 million and $2 billion.

52 Week High: The highest price that the stock has traded for over the last 52 weeks (1 year).

52 Week Low: The lowest price that the stock has traded for over the last 52 weeks (1 year).

P/E: P/E (Price-to-earnings ratio) is a mathematical computation that takes a stock’s current stock price and divides it by its previous annual earnings per share. A stock that sells for $40 dollars per share that earned $4 per share over the previous year would have a P/E of 10. P/E’s can be an indicator of value relative to other similar stocks when taking growth rates into consideration.

F P/E: Forward P/E’s calculate a stock’s current price divided by expected earnings for the following year. For instance, a stock that sells for $50 per share that was expected to earn $5 per share would have a F P/E of 10.

Beta: Beta is a measure of a stock’s trading volatility level in comparison to the entire market. A beta of 1 means that the stock tends to trade with the market. A beta of less than 1 means that the stock’s price tends to be less volatile than the market. A beta of greater than 1 means that the stock’s price will be more volatile than the market. If a stock has a beta of 1.4, in theory it is 40% more volatile than the rest of the market.

EPS (Earnings Per Share): A company’s profit, or earnings, divided by the number of outstanding shares. For instance, if a company earned $60 million in a year and had 6 million outstanding shares, the company’s earnings per share (EPS) would be $10.

Dividend: A cash reward given by companies to shareholders of stock, typically on a quarterly basis as determined by the company. Dividends are most often given by very profitable or mature companies as an incentive for owning and holding shares. The ‘dividend’ metric in a stock quote is the actual cash reward per share given to shareholders in the most recent quarter.

Yield: Yield is a percentage that reflects the return received from dividends paid on stocks over the most recent quarter (multiplied out over a year) relative to its current price. For instance, a stock that is priced at $80 that most recently paid a quarterly dividend $2 of of  would have a yield of 10% ($2 x 4 quarters/$80 = 0.10 = 10%).

Shares: The total number of outstanding shares that the company has issued for public trading.

Institutionally Own: The percentage of outstanding shares of the stock that are owned by financial institutions (mutual funds, pension funds, etc.).

For more common investing terminology, check out the Mint’s financial term glossary.
For more of GE Miller’s writing, visit personal finance blog 20somethingfinance.com.

Investing 101: Common Stock Quote Metrics Defined | Mint.com Blog | Personal Finance News & Advice

I found this fascinating quote today from Fred Wilson.  I tumbled about Second Market here:

Entrepreneurs won’t start companies and investors won’t invest in them if there is no path to liquidity on the company stock. A secondary market for private company stock can fill the gap that the lack of an I.P.O. market has created.A VC, Apr 2009

You should read the whole article.

I’m creating a Guatemala portfolio made up of individual stocks, ETFs, and ADRs. We’ll see how a Narco-Economy performs.

What is Market Capitalization?

Market capitalization or “Market cap” refers to the total market value of all the publicly traded shares of that company.  Basically you take the number of shares available for a company, multiply by the stock price and that gives you the market capitalization.  For example if a company has 5,000 outstanding shares that are worth $40 each - the total value of the shares of $200,000 which is also the market capitalization.

It’s important to note that market capitalization doesn’t necessarily have anything to do with the actual value of the company assets – but rather the value of ownership which includes all the assets of the company plus any future expectations of profits.

It’s possible to have a company that doesn’t own any assets but has a great idea for making money – investors might value this company highly.  Google is a good example of a company that has a market cap far higher than its assets because its investors are assuming the company will be able to increase its profits at a rapid pace.

Small cap vs Large cap

The capitalization of a company is most often used when grouping companies by size.  A mutual fund or ETF might specialize in large cap companies or small cap companies.  The general thought is that smaller companies (measured by market cap) are riskier investments but might perform better over the long term.  Larger companies are not as risky but also might not go up in value as much as the smaller cap companies.

Market Capitalization

New Economic Reality Changes Financial Language

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New economic realities brings its own dictionary. Your Money Mogul listed new meanings of old financial terms. Forget the losses you made and enjoy yourself.

CEO — Chief Embezzlement Officer.

CFO — Corporate Fraud Officer.

BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET — A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING — The art of buying low and selling lower.

P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing. BROKER — What my broker has made me.

STANDARD & POOR — Your life in a nutshell.

STOCK ANALYST — Idiot who just downgraded your stock.

STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER — A guy whose phone has been disconnected.

MARKET CORRECTION — The day after you buy stocks.

CASH FLOW — The movement your money makes as it disappears down the toilet.

YAHOO — What you yell after selling it to some poor sucker for $240 per share.

WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse.

PROFIT — An archaic word no longer in use.

-Fair Loan Rate!

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What are Bonds?

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Bonds, also known as fixed income, are an investment you can purchase where you essentially lend money to whoever issued the bond in exchange for future income in the form of interest payments. At the end of the life of the bond, you get your original investment back. The interest payments and principal (amount of your investment) are guaranteed by the company or government that issued the bonds. Who issues bonds? There are different types of bonds and different types of entities that issue them. Government bonds are issued by different levels of government which can range from a small town to the U.S. government. Corporate bonds are issued by companies and although the companies can be small or large, most corporate bonds are issued by the larger companies. How do you make money with a bond? Most bonds pay a set amount of money every so often to the holder of the bond (that’s you). You are lending money out (via the bond) and the borrower (issuing company or government) pays you interest. This is the same sort of thing that happens in a savings account when your bank pays you interest on your deposits. Why would I want to buy a bond? Bonds are considered a less risky investment compared to stocks because the interest payments and principal are guaranteed by the issuer. Typically, “safer” bonds that are issued by the US government pay a lower interest rate, whereas “riskier” bonds issued by companies will pay a higher interest rate to compensate for the extra risk. The risk with bonds is that if the company or government that issues the bond goes bankrupt or runs into financial problems, then the bond holder may not get their money back.

ABCs of Investing

• US Treasury considers taking equity stakes in insurers
• Foreign investors hit the road
• Betting against Uncle Sam

Capitulation

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A military term. Capitulation refers to surrendering or giving up. In the stock market, capitulation is associated with “giving up” any previous gains in stock price as investors sell equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling. After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom. - Investopedia

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