1. THE STOCK EXCHANGE

2. Share = Stocks
Stock is a piece of ownership of a company. Ownership of such a
portion gives the holder the right to receive part of the company’s
profits and to participate in its management as if you own enough stock
you also have some decision-making power within the company.
When a company needs to acquire extra money to help grow the
business, they can sell some or all of the ownership of the company in
the form of stocks. So if you were to buy 100% of a company's stock,
you would own the whole company.
Buying stock is a very popular form of investing.

3. Bond
It is a document issued by a
government or a company
borrowing money from the public,
stating the existence of a debt
and the amount owing to the
holder who must show this
document in order to obtain
repayment of the loan.
So it is a kind of formal contract
to repay borrowed money with
interest at fixed intervals.

4. The main DIFFERENCE between bonds and
stocks is that STOCKHOLDERS are owners of the
company they are invested in, whereas
BONDHOLDERS are only lenders. Another
difference is that bonds usually have a maturity
date, after which the bond is cancelled, whereas
stocks may be outstanding indefinitely.

5. Terminiology related to BONDS:
The issuer is the entity (company or govt.) who borrows an
amount of money and pays the interest.
The principal of a bond is the amount that the issuer borrows
which must be repaid to the lender.
The coupon is the interest that the issuer must pay.
The maturity is the date that the issuer must return the
principal + interests.
The indenture is the contract that states all of the terms of the
bond.

6. STOCK EXCHANGE: special markets where buyers and sellers
are brought together to buy and sell stocks.
Professionals in a
hectic activity
buying and selling
stocks.
The New York Stock Exchange (=The Big
Board) is a stock exchange located at 11
Wall Street, New York City. It is the
world's largest stock . It provides a
means for buyers and sellers to trade
shares in companies registered for public
trading.

7. BROKERAGE FIRM: dealer of stocks that acts as your agent
when you want to buy or sell stocks. They charge the investors
with a commission fee for their services.
Nowadays using
only their
website is
often enough.
Stockers execute STOCK
TRANSACTIONS on behalf of
investors.

8. HOW DOES THE STOCK EXCHANGE WORKS?
Investor place the order to his broker.
It is sent to the firm’s order department.
They send it to their trader on the exchange floor, who looks for
someone willing to sell the kind of share you are looking for. (It’s
not always easy to buy and sell the stocks you want).
The traders agree on a price and execute the order.

9. WATCH THIS TUTORIAL CARTOON TO BETTER UNDERSTAND HOW THE
STOCK MARKET WORKS:
http://www.youtube.com/watch?v=rtQ4MwuC3E8 Part 1
http://www.youtube.com/watch?v=GnJCOof2HJk Part 2 (the last past of the
first video = as the beginning of the second video)

10. THE GREAT QUESTION: HOW DO I
KNOW WHICH STOCK TO BUY?
Stocks
recommended on
TV, experts,
newspapers,
experts?
Checking the
technical
indicators?
Based on rumors?
Stocks from big,
stable and
successful
companies?
Choosing randomly?

11. SEVERAL FACTORS TO CONSIDER:
How long can you wait?
How much risk can you afford?
How many stocks can you afford?
Do you want to be conservative? Keep your risk low buy
buying some blue-chip stocks like GE and hold them for a few
years. The downside is that conservative stocks usually don't
gain value very quickly. Ensure and Increase Your Safety with
Diversification. The more different stocks you purchase, the
more safe you will be in case one stock drops significantly. Of
course, you will probably also make less money because some
stocks will go up and some will go down.
Do you like some risk? Then try some more volatile stocks you
have a chance at making a larger and faster gain.

12. EURO STOXX 50: 50
large blue chip
companies in the
Eurozone.
DOW JONES:
30 U.S. large bluechip companies in
the USA
NASDAQ 100: It is an Amercian
Electronic Stock Exchange.
STOCK MARKET INDECES
(An index is a method of measuring a section of the STOCK MARKET, used
to measure its performance).
IBEX 35
30 U.S. large blueNIKKEI 225: 225 major companies
chip companies in
in the Tokio Stock Exchange.
the Spain
FTSE 100 (“Footsie 100”) Financial
Times Stock Exchange.100 bluechip in the London Stock Exchange
DAX (30 major
companies trading in the
Frankfurts stock
Exchange)

13. Some important
concepts

14. Supply and demand
Company news
World news
Technical analysis
Inflation
PRICE
Analyst
recommendations
Terrorist attacks
Bull and bear
markets
Oil prices
Human
psychology

15. TECHNICAL ANALYSIS
One of the most popular
methods for helping predict a
stock's price, at least in the
short term, is called Technical
Analysis. This method involves
looking for patterns or
indicators in stock prices,
volumes, and many others,
over time. Obviously nobody
can predict the future but this
method can be effective in
many cases because human
beings are somewhat
predictable.

16. ANALYSTS RECOMMENDATIONS
Many traders rely on experts'
opinions about companies and
future stock prices. Are they
always correct? Of course not.
Nobody can predict what will
happen in the future. They can,
however, make educated guesses
based on past performances and
future prospects for the companies
and industries they follow.

17. HUMAN PSYCHOLOGY
Fear and greed are the two of
the strongest human emotions
that affect the market. For
example, it is easy to get
caught in the trap of selling a
stock prematurely because it
dipped temporarily and fear
set in. On the other hand, it is
also easy to miss out on a
respectable gain because
greed was telling you to hold
out for more, and then the
stock drops back down.

18. Company
current and
future
earnings
COMPANY NEWS
Although they sound negative (and they may
be, for instance when they are signs of
corruptions and the signal that there are
more negative announcements to come),
these are often good news for the company’s
stock price because expenses will be reduced
significantly and quickly. This should help
increase earnings right away. It is not
always a major warning sign; it could just be
a reaction to a slower economy. It is one of
the quickest ways a company can cut
expenses if sales have not been meeting
expectations. Drastic actions may help
companies in the long run.
Market scandals
Firing CEO or
company
officials
Layoffs
Store closings

19. WALL STREET by Oliver Stone.
With Michael Douglas (Gordon Gekko)
and Charlie Sheen (Bud Fox).
A young and impatient stockbroker is
willing to do anything to get to the
top, including trading on illegal inside
information.

20. WALL STREET 2: Money Never
Sleeps by Oliver Stone.
With Michael Douglas (Gordon
Gekko) and Shia Saide LaBeouf.
In 2001, Gordon Gekko (Michael Douglas)
is released from prison after serving eight
years for insider trading and securities
fraud. Seven years later, Gekko is
promoting his new book Is Greed Good?,
while his estranged daughter, Winnie
(Carey Mulligan), runs a small news
website and is dating Jacob Moore (Shia
LaBeouf), a trader at Keller Zabel
Investments. Jacob is a protégé of
managing director Louis Zabel (Frank
Langella), and is trying to raise money for
a research project.