Finance

Money, honey, Hard cash is all that counts.

Mergers and Aquisitions

some notes on whether you can profit for M & A. I'm not paying attention and will not be able to scalp when an announcement is made. Instead I am interested in post announcement. Often the target company's share price will spike higher upon announcement.

Risk Arbitrage - Profiting from Mergers, Acquisitions and Liquidations

How to decipher Broker Ratings and Stock Calls

Target price: fair price of the stock. The broker has calculated what the price of the stock should be. Also check if there has been a time frame mentioned, otherwise you can assume the price is for now.

Overweight:

Outperform: buy it

Buy: The current share price is cheaper than the target price. The broker recommends buying it.

Neutral:

Hold

Underperform:

Upgrades and downgrades

Glossary

Short Covering: buy stops on people who are short. This is the opposite of a stoploss for traders who are long.

ttm: trailing twelve months

basis points: 1bp is 0.01%. 100bp is 1%

Managed funds - what to look for

MER - management expense ratio, how much the fund manager is going to take each year (usually a percentage)

Comparison to the sector the fund is focussed on

Amount of turnover - excessive turnover generates capital gains (and more tax for you). Don't forget the biggest fee

Make sure its not a fund of funds, you will be paying expense ratios multiple times.

Psychology

Ten Money Mistakes We All Make

China shares

A shares - companies incorporated in mainland China, listed in Renminbi. Only mainlanders and some insto can trade.

B shares - companies incorporated in mainland China, listed in foreign currencies on the Shanghai and Shenzhen markets.

H shares - listed on the hkse and elsewhere.

Inflation

Why do we want stable prices?. This article explains why inflation is targeted to 2-3%.

Indices

Indices give a good overview on a basket of stocks. I'm basing some of my portfolios around them.

To replicate you can buy a passive fund that attempts to mirror the index. Or build your own.

Weightings

Each constituent stock in the index can weigh a different proportion to another. A 10% increase in a large component and a 10% decrease in a small component will increase the index.

The data for exact proportions of the consistuents are not free. For free information I usually visit the iShares site for an ETF that tracks the index, and look at the proportions in the fund.

FTSE100

FTSE index company maintains the FTSE 100 and other indexes.

Weightings are calculated by float but fall into a band. Even though floated shares may change daily, the weightings are updated only in certain circumstances.

S&P 500

I can't find a list of investable weight factors.

For traders on the ASX, SPDR runs an ETF, and publishes % weightings of components in its SPY ETF.

iShares runs the IVV S&P 500 Index Fund and also publishes % weightings.

ASX 200

SPDRs runs theSPDR S&P/ASX 200 Fund. Index holdings are published as a percentage to 2 decimal places

Futures are under the AP ticker on the SNFE

Money Market Fund

Taken from wsj - Money Market Funds explained

Money Market Funds explained

Finance links

AMP Oliver's insights is published most every couple of weeks. Available in a nice PDF format that you can download.

Fool UK and US.

Financial Vizualizations - finviz.com has a very clean stock screener.

Google finance has a clean interface

House Prices

The economist has a site with a graph of house prices per country. It compares it with rents and average income.

Backwardation and Contango

There are montly futures contracts for some commodities. Backwardation is where the near term contract has a higher price than later contracts. Contango is where the near team contract has a lower price than later contracts.

Backwardation is a sign of tight physical supplies

2010-12-15 FT reports there could be a shift from contango to backwardation.

Aged Care sector

25 Jun, 2011.

Southern Cross is a UK provider that has gotten into strife.

The business model is to rent premises, as opposed to buying them outright. This lets the investor invest in the idea that nursing demand will increase as the population ages. Other investors can choose to invest in the property company.

Aged care plays will pay off in the demand does increase, but there were some problems for Southern Cross.

Demand might not be as simple as population aging - people are staying in their own homes for longer, and when aged care is required, it is more costly due to the state of their bodies.

Some care is paid for by the local council, but councils in the UK are no under pressure to reign in costs. The fees have been reduced, but rent has not.

Pension Types

15 Jul, 2011

A defined benefit (DB) scheme is a final-salary scheme where payments are based on the amount of your final salary. This is expensive and risky for a company to manage.

A defined contribution (DC) scheme is a pension where the employer and employee can put amounts into the employee's pension for investment. The investment risk is assumed by the employee. There is less risk to the company in this scheme. Once contributions are made, and any losses will be assumed by the employee.

Euro problems

05 Nov, 2011. There's been a lot of news on Euro zone problems. Countries like Greece and Italy have high ratios of public debt to GDP, and have to pay more for their debt.

To see how much they pay you can look at yields on government bonds. See Italian 10yr yields and compare that to German 10yr yields.

The troika (3 of a kind) consists of the European Commission, European Central Bank and the IMF.

Money Supply

This is a measure of the amount of money in the economy. In the UK at the beginning for 2012, even though we have had QE, banks have taken most of the money but are not loaning out to other companies.

QE

2012-09-13. QE3 announced today. XIV up 7%. SPY reached 147 intraday, a new 52 week high.