Category: Terminology

  • 2008 Financial Crisis

    The largest financial meltdown since the Great Depression of 1929. Coined the Great Recession, large financial institutions became over leveraged taking risky bets on the security of mortgages. Mortgages are usually safe and great money makers for banks because Americans almost always pay their mortgage. When the economy began to slow, in 2007, many Americans […]

  • Value proposition

    A statement of measurable value by the company. A successful value proposition will persuade customers to purchase. Example of Dollar Shave Club value proposition: A top-shelf grooming routine. Personalized for you.

  • Business Model

    When an organization creates, delivers, and captures value, that is a business model. Strategic in nature business models can provide a competitive advantage. Recently the Business Model Canvas was mad popular by Alex Osterwalder. The Business Model Canvas is a tool to help visualize operations, customers, sales channels, etc. Components of a Business Model: […]

  • Take Profits

    To sell when you have made money or profited from an investment. Many investors take profits as an investment grows to diversify the earnings into other investments.

  • Treasury Bonds

    Bonds issued by the government to raise capital to find operations. Regarded as safe and secure because they are backed by the U.S. government which has the ability to print money and raise taxes to cover bond obligations. T-bonds mature in 30 years and offer investors the highest interest payments bi-annually. TLT T-notes mature anywhere […]

  • Recession

    A significant decline in general economic activity. Economists define recession as two consecutive quarters of GDP decline.

  • Earnings

    Earnings refer to a company’s profits in a given quarter or fiscal year. Earnings are an important figure to use when analyzing a company’s profitability. It can be compared to analyst’s earnings estimates, the company’s past performance, or against peers within the same industry.

  • Earnings Report

    Slang term for Securities and Exchange Commission (SEC) filings that occur quarterly and annually. For public companies it is mandatory to publish the financial standing with the SEC for investors to scrutinize. The filings consist of the balance sheet, Income statement, and cash flow statement.

  • Dividend Aristocrats

    A company that pay a dividend but in addition consistently increased the size of the payout over time. Mainly large multinational companies that no longer have the benefit of rapid growth.

  • Diversification

    Is a portfolio strategy that mixes a wide variety of investments in hopes of mitigating risk. Diversification can occur across asset classes, sectors, and countries.