Stock Market Analysis: 11/11/09


Stock Market Analysis: 11/11/09

 

The first is investors who own hybrids - convertible bonds, debt with equity options etc., who do have multiple and sometimes conflicting interests in the firm. A bondholder who has an equity position is just as much an equity investor as one who does not, even though the former's interests may diverge from the remaining boutiques near me holders. However, you have to be very wise when choosing one or more among the many stock trading strategies that are now introduced to traders while taking into consideration your plans, trading styles and goals. Pros: This number, like beta, should average out to one across stocks and should have lower standard error; even in a period like the last quarter, the standard deviations rose across the board and the relative standard deviation was fairly stable. Pros: Forward looking, becauase you use option prices to back out standard deviation. In the approach, the implied standard deviation of stocks is backed out of traded options issued by the company and compared to the standard deviation of bonds issued by the same company.

 

The gross delta exposure from Calls, Puts and Convert Hedges can all be netted out - they are all likely held by the same market makers. We could try restricting shareholder voting only to those investors who have no conflicting interests, but I don't think that proposal can be easily policed and it would not be fair. The example given is of a shareholder who has taken a large position on the credit default swap market, betting that the company will fail. The cost of preferred stock should be the preferred dividend yield (which will be lower than the cost of equity but higher than the pre-tax cost of debt). While most folks today trust mutual funds and their professional managers with their investments, its still important to understand the basics of the stock market. The Dow Jones was virtually unchanged for the month of August and while September is a weak month historically, I believe the stock market is gearing up for a big bounce. While some choose QuickBooks, others go for FreshBooks. Potash Corp. of Saskatchewan, Inc. (POT) - Shares of POT have been on fire over the past week. Saskatchewan, Inc. are back above $60. Baidu, Inc. (BIDU) - Shares of Baidu, Inc. hit a new 52 week high on Friday after reporting solid earnings.

 

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