1.
Invest (meteorology)
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An invest in meteorology is a designated area of disturbed weather that is being monitored for tropical cyclone development. Invests are designated by three separate forecast centers, the National Hurricane Center, Central Pacific Hurricane Center and Joint Typhoon Warning Center, invests are designated by three separate forecast centers, the National Hurricane Center, Central Pacific Hurricane Center and Joint Typhoon Warning Center. The designation of a system as an invest does not necessarily correspond to any particular likelihood of development of the system into a tropical cyclone. Invests in the North Indian Ocean cyclone basin are also labelled by the JTWC, numbers are rotated within the season and are re-used as necessary. If the system develops into a cyclone, it is reclassified as the next name/number on the list. Navy/NRL Tropical Cyclone Page - Current tropical cyclones and INVESTS worldwide
2.
Time
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Time is the indefinite continued progress of existence and events that occur in apparently irreversible succession from the past through the present to the future. Time is often referred to as the dimension, along with the three spatial dimensions. Time has long been an important subject of study in religion, philosophy, and science, nevertheless, diverse fields such as business, industry, sports, the sciences, and the performing arts all incorporate some notion of time into their respective measuring systems. Two contrasting viewpoints on time divide prominent philosophers, one view is that time is part of the fundamental structure of the universe—a dimension independent of events, in which events occur in sequence. Isaac Newton subscribed to this realist view, and hence it is referred to as Newtonian time. This second view, in the tradition of Gottfried Leibniz and Immanuel Kant, holds that time is neither an event nor a thing, Time in physics is unambiguously operationally defined as what a clock reads. Time is one of the seven fundamental physical quantities in both the International System of Units and International System of Quantities, Time is used to define other quantities—such as velocity—so defining time in terms of such quantities would result in circularity of definition. The operational definition leaves aside the question there is something called time, apart from the counting activity just mentioned, that flows. Investigations of a single continuum called spacetime bring questions about space into questions about time, questions that have their roots in the works of early students of natural philosophy. Furthermore, it may be there is a subjective component to time. Temporal measurement has occupied scientists and technologists, and was a motivation in navigation. Periodic events and periodic motion have long served as standards for units of time, examples include the apparent motion of the sun across the sky, the phases of the moon, the swing of a pendulum, and the beat of a heart. Currently, the unit of time, the second, is defined by measuring the electronic transition frequency of caesium atoms. Time is also of significant social importance, having economic value as well as value, due to an awareness of the limited time in each day. In day-to-day life, the clock is consulted for periods less than a day whereas the calendar is consulted for periods longer than a day, increasingly, personal electronic devices display both calendars and clocks simultaneously. The number that marks the occurrence of an event as to hour or date is obtained by counting from a fiducial epoch—a central reference point. Artifacts from the Paleolithic suggest that the moon was used to time as early as 6,000 years ago. Lunar calendars were among the first to appear, either 12 or 13 lunar months, without intercalation to add days or months to some years, seasons quickly drift in a calendar based solely on twelve lunar months
3.
Durable good
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In economics, a durable good or a hard good is a good that does not quickly wear out, or more specifically, one that yields utility over time rather than being completely consumed in one use. Items like bricks could be considered perfectly durable goods because they should never wear out. Highly durable goods such as refrigerators or cars usually continue to be useful for 3 or more years of use, examples of consumer durable goods include automobiles, books, household goods, sports equipment, jewelry, medical equipment, firearms, and toys. Nondurable goods or soft goods are the opposite of durable goods and they may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of fewer than 3 years. While durable goods can usually be rented as well as bought, while buying durable goods comes under the category of investment demand of goods, buying non-durables comes under the category of consumption demand of goods. Several units may be used to measure the durability of a product according to its field of such as years of existence, hours of use. The life span of household goods is significant for sustainable consumption, the longer product life spans could contribute to eco-efficiency and sufficiency, thus, slowing consumption in order to progress towards a sustainable consumption. Cooper proposed a model to demonstrate the role of product life spans to sustainable production and consumption. Coase conjecture Industrial organization Pacman conjecture Planned obsolescence Putty-putty
4.
Real estate
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Also, the business of real estate, the profession of buying, selling, or renting land, buildings or housing. It is a term used in jurisdictions whose legal system is derived from English common law, such as India, the United Kingdom, United States, Canada, Pakistan, Australia. Residential real estate may contain either a family or multifamily structure. Residences can be classified by, if, and how they are connected to neighbouring residences, different types of housing tenure can be used for the same physical type. For example, connected residents might be owned by an entity and leased out. Major categories in North America and Europe Attached / multi-unit dwellings Apartment or Flat – An individual unit in a multi-unit building, the boundaries of the apartment are generally defined by a perimeter of locked or lockable doors. Often seen in apartment buildings. Multi-family house – Often seen in multi-story detached buildings, where each floor is an apartment or unit. Terraced house – A number of single or multi-unit buildings in a row with shared walls. Condominium – Building or complex, similar to apartments, owned by individuals, common grounds and common areas within the complex are owned and shared jointly. There are townhouse or rowhouse style condominiums as well, semi-detached dwellings Duplex – Two units with one shared wall. Single-family detached house Portable dwellings Mobile homes – Potentially a full-time residence which can be movable on wheels, houseboats – A floating home Tents – Usually very temporary, with roof and walls consisting only of fabric-like material. The size of an apartment or house can be described in square feet or meters, in the United States, this includes the area of living space, excluding the garage and other non-living spaces. It can be described roughly by the number of rooms. A studio apartment has a bedroom with no living room. A one-bedroom apartment has a living or dining room separate from the bedroom, Two bedroom, three bedroom, and larger units are common. Major categories in India and the Asian Subcontinent Co-operative Housing Societies Condominiums Chawls Villas Havelis The size is measured in Gaz, Quila, Marla, Beegha, and acre. See List of house types for a listing of housing types and layouts, real estate trends for shifts in the market
5.
Tertiary sector of the economy
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The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector, and the primary sector, the basic characteristic of this sector is the production of services instead of end products. Services include attention, advice, access, experience, and discussion, the production of information has long been regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the provision of services to businesses as well as final consumers. The goods may be transformed in the process of providing the service, however, the focus is on people interacting with people and serving the customer rather than transforming physical goods. It is sometimes hard to define whether a company is part of the secondary or tertiary sector. These governmental classification systems have a hierarchy that reflects whether the economic goods are tangible or intangible. Unlike governmental classification systems, the first level of market-based classification systems divides the economy into functionally related markets or industries, the second or third level of these hierarchies then reflects whether goods or services are produced. For the last 100 years, there has been a shift from the primary and secondary sectors to the tertiary sector in industrialised countries. The tertiary sector is now the largest sector of the economy in the Western world and these are not necessarily busboys and live-in maids. Many of them are in the professional category and they are earning as much as manufacturing workers, and often more. The first economy to follow path in the modern world was the United Kingdom. The speed at which other economies have made the transition to service-based economies has increased over time, historically, manufacturing tended to be more open to international trade and competition than services. Service providers face obstacles selling services that goods-sellers rarely face, services are intangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed, some, such as consultants and providers of investment services, since the quality of most services depends largely on the quality of the individuals providing the services, people costs are usually a high fraction of service costs. Whereas a manufacturer may use technology, simplification, and other techniques to lower the cost of goods sold, for example, how does one choose one investment adviser over another, since they are often seen to provide identical services. Charging a premium for services is usually an option only for the most established firms, who charge extra based upon brand recognition
6.
Factory
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Factories arose with the introduction of machinery during the Industrial Revolution when the capital and space requirements became too great for cottage industry or workshops. Early factories that contained small amounts of machinery, such as one or two spinning mules, and fewer than a dozen workers have been called glorified workshops, most modern factories have large warehouses or warehouse-like facilities that contain heavy equipment used for assembly line production. Large factories tend to be located with access to multiple modes of transportation, with some having rail, highway, factories may either make discrete products or some type of material continuously produced such as chemicals, pulp and paper, or refined oil products. Oil refineries have most of their equipment outdoors, discrete products may be final consumer goods, or parts and sub-assemblies which are made into final products elsewhere. Factories may be supplied parts from elsewhere or make them from raw materials, continuous production industries typically use heat or electricity to transform streams of raw materials into finished products. The term mill originally referred to the milling of grain, which usually used natural resources such as water or wind power until those were displaced by steam power in the 19th century. Because many processes like spinning and weaving, iron rolling, and paper manufacturing were originally powered by water, according to translations of Demosthenes and Herodotus, Naucratis was a, or the only, factory in the entirety of ancient Egypt. A source of 1983, states the largest factory production in ancient times was of 120 slaves within 4th century BC Athens, although The Cambridge Online Dictionary definition of factory states, a building or set of buildings where large amounts of goods are made using machines elsewhere. The wheel was invented circa 3000 BC, the spoked wheel c.2000 BC, the Iron Age began approximately 1200-1000 BC. However, other sources define machinery as a means of production, according to one text the water-mill was first made in 555 A. D. by Belisarius, although according to another they were known to Pliny the Elder and Vitruvius in the first century B. C. By the time of the 4th century A. D. mills with a capacity to grind 3 tonnes of cereal an hour, the Venice Arsenal provides one of the first examples of a factory in the modern sense of the word. Founded in 1104 in Venice, Republic of Venice, several hundred years before the Industrial Revolution, the Venice Arsenal apparently produced nearly one ship every day and, at its height, employed 16,000 people. One of the earliest factories was John Lombes water-powered silk mill at Derby, by 1746, an integrated brass mill was working at Warmley near Bristol. Raw material went in at one end, was smelted into brass and was turned into pans, pins, wire, housing was provided for workers on site. Josiah Wedgwood in Staffordshire and Matthew Boulton at his Soho Manufactory were other prominent early industrialists, the factory system began widespread use somewhat later when cotton spinning was mechanized. Richard Arkwright is the credited with inventing the prototype of the modern factory. After he patented his water frame in 1769, he established Cromford Mill, in Derbyshire, England, the factory system was a new way of organizing labour made necessary by the development of machines which were too large to house in a workers cottage. Working hours were as long as they had been for the farmer, overall, this practice essentially reduced skilled and unskilled workers to replaceable commodities
7.
Research and development
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Research and development, also known in Europe as research and technical development, is a general term for activities in connection with corporate or governmental innovation. Research and development is situated at the front end of the life cycle. R&D differs from the vast majority of activities in that it is not intended to yield immediate profit, and generally carries greater risk. New product design and development is more often not a crucial factor in the survival of a company. In an industry that is changing fast, firms must continually revise their design and this is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers. Without an R&D program, a firm must rely on strategic alliances, acquisitions, a system driven by marketing is one that puts the customer needs first, and produces goods that are known to sell. Market research is carried out, which establishes what is needed, if the development is technology driven R&D is directed toward developing products to meet the unmet need. Statistics on organizations devoted to R&D may express the state of an industry, some common measures include, budgets, numbers of patents or on rates of peer-reviewed publications. Bank ratios are one of the best measures, because they are maintained, public. In the United States, a ratio of research and development for an industrial company is about 3. 5% of revenues. A high technolog company, such as a manufacturer, might spend 7% or a pharmaceutical companies such as Merck & Co.14. 1% or Novartis 15. 1%. That is, gross profits will be as much as 90% of the sales cost, with manufacturing costing only 10% of the product price, most industrial companies get 40% revenues only. On a technical level, high tech organizations explore ways to re-purpose and they often reuse advanced manufacturing processes, expensive safety certifications, specialized embedded software, computer-aided design software, electronic designs and mechanical subsystems. Research from 2000 has shown that firms with a persistent R&D strategy outperform those with an irregular or no R&D investment program. Research and development are very difficult to manage, since the feature of research is that the researchers do not know in advance exactly how to accomplish the desired result. As a result, higher R&D spending does not guarantee more creativity, research is the most risky financing area because both the development of an invention and its successful realization carries uncertainty including the profitability of the invention. One way of reducing the uncertainty of researching know-hows is to obtain already researched know-hows, president Barack Obama requested $147.696 billion for research & development in FY2012. Much of this spending was devoted to research on the mechanisms of disease
8.
Financial asset
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A financial asset is a non-physical asset whose value is derived from a contractual claim, such as bank deposits, bonds, and stocks. Financial assets are more liquid than other tangible assets, such as commodities or real estate. Under IFRS, financial assets are classified into four categories which determine the way in which they are measured and reported. Financial assets with fixed or with determinable payments and fixed maturity which the company has to be willing, held-to-maturity investments are either measured at fair value through profit or loss by designation, or determined to be financial assets available for sale by designation. Financial assets with fixed or determinable payments which are not listed in a market are considered to be loans. Loans and receivables are also measured at fair value through profit or loss by designation or determined to be financial assets available for sale by designation. All other financial assets are categorized as financial assets available for sale and are measured at fair value through profit or loss by designation. For financial assets to be measured at fair value through profit or loss by designation, designation is only possible at the amount the asset was initially recognized at. Moreover, designation is not possible for equity instruments which are not traded in an active market, further requirements for designation are e. g. Regarding financial assets available for sale by designation, designation is only possible at the amount the asset was initially recognized at as well, however, there are no further restrictions or requirements
9.
Finance
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Finance is a field that deals with the study of investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty, Finance can also be defined as the science of money management. Finance aims to price assets based on their level and their expected rate of return. Finance can be broken into three different sub-categories, public finance, corporate finance and personal finance. g, health and property insurance, investing and saving for retirement. Personal finance may also involve paying for a loan, or debt obligations, net worth is a persons balance sheet, calculated by adding up all assets under that persons control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the sources of income within a year. From this analysis, the financial planner can determine to what degree, adequate protection, the analysis of how to protect a household from unforeseen risks. These risks can be divided into the following, liability, property, death, disability, health, some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance, business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a piece of the overall investment planning. Tax planning, typically the income tax is the single largest expense in a household, managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, most modern governments use a progressive tax. Typically, as ones income grows, a marginal rate of tax must be paid. Understanding how to take advantage of the tax breaks when planning ones personal finances can make a significant impact in which it can later save you money in the long term. Investment and accumulation goals, planning how to accumulate enough money - for large purchases, major reasons to accumulate assets include, purchasing a house or car, starting a business, paying for education expenses, and saving for retirement. Achieving these goals requires projecting what they will cost, and when you need to withdraw funds that will be necessary to be able to achieve these goals, a major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the planner will suggest a combination of asset earmarking. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity
10.
Dividend
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A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders. Distribution to shareholders may be in cash or, if the corporation has a dividend reinvestment plan, a dividend is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense, rather, retained earnings are shown in the shareholders equity section on the companys balance sheet – the same as its issued share capital. Public companies usually pay dividends on a schedule, but may declare a dividend at any time. Cooperatives, on the hand, allocate dividends according to members activity. The word dividend comes from the Latin word dividendum, Cash dividends are the most common form of payment and are paid out in currency, usually via electronic funds transfer or a printed paper check. Such dividends are a form of investment income and are taxable to the recipient in the year they are paid. This is the most common method of sharing corporate profits with the shareholders of the company, for each share owned, a declared amount of money is distributed. Thus, if a person owns 100 shares and the dividend is 50 cents per share. Dividends paid are not classified as an expense, but rather a deduction of retained earnings, Dividends paid does not show up on an income statement but does appear on the balance sheet. Stock or scrip dividends are paid out in the form of additional stock shares of the issuing corporation. They are usually issued in proportion to shares owned, Stock dividend distributions are issues of new shares made to limited partners by a partnership in the form of additional shares. Nothing is split, these increase the market capitalization and total value of the company at the same time reducing the original cost basis per share. Stock dividends are not includable in the income of the shareholder for US income tax purposes. Because the shares are issued for proceeds equal to the market price of the shares. Property dividends or dividends in specie are those out in the form of assets from the issuing corporation or another corporation. They are relatively rare and most frequently are securities of companies owned by the issuer, however they can take other forms, such as products
11.
Interest
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Interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum. It is distinct from a fee which the borrower may pay the lender or some third party, in the case of savings, the customer is the lender, and the bank plays the role of the borrower. Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, the rate of interest is equal to the interest amount paid or received over a particular period divided by the principal sum borrowed or lent. Compound interest means that interest is earned on prior interest in addition to the principal, due to compounding, the total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e. In practice, interest is most often calculated on a daily, monthly, or yearly basis, according to historian Paul Johnson, the lending of food money was commonplace in Middle Eastern civilizations as early as 5000 BC. The argument that acquired seeds and animals could reproduce themselves was used to justify interest, early Muslims called this riba, translated today as the charging of interest. The First Council of Nicaea, in 325, forbade clergy from engaging in usury which was defined as lending on interest above 1 percent per month, ninth century ecumenical councils applied this regulation to the laity. Catholic Church opposition to interest hardened in the era of scholastics, in the medieval economy, loans were entirely a consequence of necessity and, under those conditions, it was considered morally reproachable to charge interest. For the same reason, interest has often been looked down upon in Islamic civilization, medieval jurists developed several financial instruments to encourage responsible lending and circumvent prohibitions on usury, such as the Contractum trinius. In the Renaissance era, greater mobility of people facilitated an increase in commerce, given that borrowed money was no longer strictly for consumption but for production as well, interest was no longer viewed in the same manner. The first attempt to control interest rates through manipulation of the supply was made by the Banque de France in 1847. The latter half of the 20th century saw the rise of interest-free Islamic banking and finance, a movement that applies Islamic law to financial institutions, some countries, including Iran, Sudan, and Pakistan, have taken steps to eradicate interest from their financial systems. All financial transactions must be asset-backed and it does not charge any interest or fee for the service of lending, in economics, the rate of interest is the price of credit, and it plays the role of the cost of capital. Over centuries, various schools of thought have developed explanations of interest and interest rates, the School of Salamanca justified paying interest in terms of the benefit to the borrower, and interest received by the lender in terms of a premium for the risk of default. In the sixteenth century, Martín de Azpilcueta applied a time preference argument, accordingly, interest is compensation for the time the lender forgoes the benefit of spending the money. On the question of why interest rates are normally greater than zero, in 1770, French economist Anne-Robert-Jacques Turgot, for the land value to remain positive and finite keeps the interest rate above zero. Adam Smith, Carl Menger, and Frédéric Bastiat also propounded theories of interest rates, in the 1930s, Wicksells approach was refined by Bertil Ohlin and Dennis Robertson and became known as the loanable funds theory. Other notable interest rate theories of the period are those of Irving Fisher, simple interest is calculated only on the principal amount, or on that portion of the principal amount that remains
12.
Risk
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Risk is the potential of gaining or losing something of value. Values can be gained or lost when taking risk resulting from an action or inaction. Risk can also be defined as the interaction with uncertainty. Uncertainty is a potential, unpredictable, and uncontrollable outcome, risk is a consequence of action taken in spite of uncertainty, Risk perception is the subjective judgment people make about the severity and probability of a risk, and may vary person to person. Any human endeavor carries some risk, but some are much riskier than others, the Oxford English Dictionary cites the earliest use of the word in English as of 1621, and the spelling as risk from 1655. It defines risk as, the possibility of loss, injury, or other adverse or unwelcome circumstance, Risk is an uncertain event or condition that, if it occurs, has an effect on at least one objective. The probability of something happening multiplied by the resulting cost or benefit if it does, finance, The possibility that an actual return on an investment will be lower than the expected return. Insurance, A situation where the probability of a variable is known, a risk is not an uncertainty, a peril, or a hazard. Securities trading, The probability of a loss or drop in value, non-systematic risk is any risk that isnt market-related. Also called non-market risk, extra-market risk or diversifiable risk, workplace, Product of the consequence and probability of a hazardous event or phenomenon. For example, the risk of developing cancer is estimated as the probability of developing cancer over a lifetime as a result of exposure to potential carcinogens. The International Organization for Standardization publication ISO31000 / ISO Guide 73,2002 definition of risk is the effect of uncertainty on objectives, in this definition, uncertainties include events and uncertainties caused by ambiguity or a lack of information. It also includes both negative and positive impacts on objectives, very different approaches to risk management are taken in different fields, e. g. Risk is the unwanted subset of a set of uncertain outcomes. Risk can be seen as relating to the probability of future events. For example, according to analysis of information risk, risk is. In computer science this definition is used by The Open Group, OHSAS defines risk as the combination of the probability of a hazard resulting in an adverse event, and the severity of the event. In information security risk is defined as the potential that a threat will exploit vulnerabilities of an asset or group of assets. Financial risk is defined as the unpredictable variability or volatility of returns
13.
Government bond
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A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date. Government bonds are denominated in the countrys own currency. Government bonds are referred to as sovereign bonds. If a government or sovereign is close to default on its debt the media often refer to this as a debt crisis. The terms on which a government can sell bonds depend on how creditworthy the market considers it to be, international credit rating agencies will provide ratings for the bonds, but market participants will make up their own minds about this. The first general government bonds were issued in the Netherlands in 1517, because the Netherlands did not exist at that time, the bonds issued by the city of Amsterdam are considered their predecessor which later merged into Netherlands government bonds. The average interest rate at that time fluctuated around 20%, the first ever bond issued by a national government was issued by the Bank of England in 1694 to raise money to fund a war against France. It was in the form of a tontine, later, governments in Europe started issuing perpetual bonds to fund wars and other government spending. The use of perpetual bonds ceased in the 20th century, a Government bond in a countrys own currency is strictly speaking a risk-free bond, because the government can if necessary create additional currency in order to redeem the bond at maturity. There have however been instances where a government has chosen to default on its domestic currency debt, currency risk is the risk that the value of the currency a bond pays out will decline compared to the holders reference currency. A bond paying in a currency that does not have a history of keeping its value may not be a deal even if a high interest rate is offered. Inflation risk is the risk that the value of the currency a bond pays out will decline over time, investors expect some amount of inflation, so the risk is that the inflation rate will be higher than expected. Many governments issue inflation-indexed bonds, which protect investors against inflation risk by linking both interest payments and maturity payments to a consumer prices index. If a central bank purchases a government security, such as a bond or treasury bill, it increases the money supply, in the UK, government bonds are called gilts. Older issues have names such as Treasury Stock and newer issues are called Treasury Gilt, inflation-indexed gilts are called Index-linked gilts
14.
Emerging markets
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An emerging market is a country that has some characteristics of a developed market, but does not meet standards to be a developed market. This includes countries that may become developed markets in the future or were in the past, the term frontier market is used for developing countries with slower economies than emerging. The economies of China and India are considered to be the largest, according to The Economist, many people find the term outdated, but no new term has gained traction. Emerging market hedge fund capital reached a new level in the first quarter of 2011 of $121 billion. The four largest emerging and developing economies by either nominal or PPP-adjusted GDP are the BRIC countries, the next five largest markets are South Korea, Mexico, Indonesia, Turkey, and Saudi Arabia. Iran is also considered an emerging market, in the 1970s, less developed countries was the common term for markets that were less developed than the developed countries such as the United States, Western Europe, and Japan. These markets were supposed to provide potential for profit. This term was thought by some to be politically incorrect so the emerging market label was created, emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as a country where politics matters at least as much as economics to the markets. The research on emerging markets is diffused within management literature, more critical scholars have also studied key emerging markets like Mexico and Turkey. Julien Vercueil recently proposed a definition of the emerging economies. Catching-up growth, during at least the last decade, it has experienced an economic growth that has narrowed the income gap with advanced economies. Hence, emerging economies appears to be a by-product of the current globalization, at the beginning of the 2010s, more than 50 countries, representing 60% of the worlds population and 45% of its GDP, matched these criteria. The term rapidly developing economies is being used to denote emerging markets such as The United Arab Emirates, Chile and these countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms. It is difficult to make an exact list of emerging markets, the best guides tend to be investment information sources like EMIS and these sources are well-informed, but the nature of investment information sources leads to two potential problems. One is an element of historicity, markets may be maintained in an index for continuity, possible examples of this are South Korea and Taiwan. In an Opalesque. TV video, hedge fund manager Jonathan Binder discusses the current, Binder says that in the future investors will not necessarily think of the traditional classifications of G10 versus emerging markets. Instead, people should look at the world as countries that are fiscally responsible, whether that country is in Europe or in South America should make no difference, making the traditional blocs of categorization irrelevant. Guégan et al. also discuss the relevance of the emerging country comparing the credit worthiness of so-called emerging countries to so-called developed countries
15.
Stock
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The stock of a corporation is constituted of the equity stock of its owners. A single share of the stock represents fractional ownership of the corporation in proportion to the number of shares. In liquidation, the stock represents the residual assets of the company that would be due to stockholders after discharge of all senior claims such as secured and unsecured debt. Stockholders equity cannot be withdrawn from the company in a way that is intended to be detrimental to the companys creditors, the stock of a corporation is partitioned into shares, the total of which are stated at the time of business formation. Additional shares may subsequently be authorized by the shareholders and issued by the company. In some jurisdictions, each share of stock has a certain declared par value, in other jurisdictions, however, shares of stock may be issued without associated par value. Shares represent a fraction of ownership in a business, a business may declare different types of shares, each having distinctive ownership rules, privileges, or share values. Ownership of shares may be documented by issuance of a stock certificate. A stock certificate is a document that specifies the amount of shares owned by the shareholder. Stock typically takes the form of shares of common stock or preferred stock. As a unit of ownership, common stock typically carries voting rights that can be exercised in corporate decisions, shares of such stock are called convertible preferred shares. New equity issue may have specific legal clauses attached that differentiate them from previous issues of the issuer. Some shares of stock may be issued without the typical voting rights, for instance, or some shares may have special rights unique to them. Often, new issues that have not been registered with a governing body may be restricted from resale for certain periods of time. Preferred stock may be hybrid by having the qualities of bonds of fixed returns and they also have preference in the payment of dividends over common stock and also have been given preference at the time of liquidation over common stock. They have other features of accumulation in dividend, Rule 144 Stock is an American term given to shares of stock subject to SEC Rule 144, Selling Restricted and Control Securities. Under Rule 144, restricted and controlled securities are acquired in unregistered form, investors either purchase or take ownership of these securities through private sales from the issuing company or from an affiliate of the issuer. Investors wishing to sell these securities are subject to different rules than those selling traditional common or preferred stock and these individuals will only be allowed to liquidate their securities after meeting the specific conditions set forth by SEC Rule 144
16.
Diversification (finance)
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In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets, diversification is one of two general techniques for reducing investment risk. The simplest example of diversification is provided by the proverb Dont put all your eggs in one basket, dropping the basket will break all the eggs. Placing each egg in a different basket is more diversified, there is more risk of losing one egg, but less risk of losing all of them. On the other hand, having a lot of baskets may increase costs, in finance, an example of an undiversified portfolio is to hold only one stock. This is risky, it is not unusual for a stock to go down 50% in one year. It is less common for a portfolio of 20 stocks to go down that much, if the stocks are selected from a variety of industries, company sizes and types it is still less likely. If the prior expectations of the returns on all assets in the portfolio are identical, some assets will do better than others, but since one does not know in advance which assets will perform better, this fact cannot be exploited in advance. The return on a portfolio can never exceed that of the top-performing investment. Conversely, the portfolios return will always be higher than that of the worst-performing investment. So by diversifying, one loses the chance of having invested solely in the asset that comes out best. That is the role of diversification, it narrows the range of possible outcomes, diversification need not either help or hurt expected returns, unless the alternative non-diversified portfolio has a higher expected return. There is no number of stocks that is diversified versus not. Sometimes quoted is 30, although it can be as low as 10 and this is based on a result from John Evans and Stephen Archer. More stocks gives lower price volatility, given the advantages of diversification, many experts recommend maximum diversification, also known as “buying the market portfolio. ”Unfortunately, identifying that portfolio is not straightforward. The earliest definition comes from the asset pricing model which argues the maximum diversification comes from buying a pro rata share of all available assets. This is the underlying index funds. Diversification has no maximum so long as more assets are available, every equally weighted, uncorrelated asset added to a portfolio can add to that portfolios measured diversification
17.
Portfolio (finance)
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In finance, a portfolio is a collection of investments held by an investment company, hedge fund, financial institution or individual. The term portfolio refers to any combination of financial risk such as stocks, bonds, portfolios may be held by individual investors and/or managed by financial professionals, hedge funds, banks and other financial institutions. It is an accepted principle that a portfolio is designed according to the investors risk tolerance, time frame. The monetary value of each asset may influence the ratio of the portfolio and is referred to as the asset allocation of the portfolio. When determining a proper asset allocation one aims at maximizing the expected return and this is an example of a multi-objective optimization problem, more efficient solutions are available and the preferred solution must be selected by considering a tradeoff between risk and return. In particular, a portfolio A is dominated by another portfolio A if A has an expected gain. If no portfolio dominates A, A is a Pareto-optimal portfolio, the set of Pareto-optimal returns and risks is called the Pareto Efficient Frontier for the Markowitz Portfolio selection problem. Recently, an approach to portfolio diversification has been suggested in the literature that is based on maximizing the risk adjusted return. There are many types of portfolios including the market portfolio and the zero-investment portfolio, there are several methods for calculating portfolio returns and performance. One traditional method is using quarterly or monthly money-weighted returns, however the true time-weighted method is a method preferred by many investors in financial markets. There are also models for measuring the performance attribution of a portfolios returns when compared to an index or benchmark. On freelancing websites Portfolio is considered as the past work which you had done or past shares which you have in any company, capital asset pricing model Infection ratio Investment management
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Statistics
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Statistics is a branch of mathematics dealing with the collection, analysis, interpretation, presentation, and organization of data. In applying statistics to, e. g. a scientific, industrial, or social problem, populations can be diverse topics such as all people living in a country or every atom composing a crystal. Statistics deals with all aspects of data including the planning of data collection in terms of the design of surveys, statistician Sir Arthur Lyon Bowley defines statistics as Numerical statements of facts in any department of inquiry placed in relation to each other. When census data cannot be collected, statisticians collect data by developing specific experiment designs, representative sampling assures that inferences and conclusions can safely extend from the sample to the population as a whole. In contrast, an observational study does not involve experimental manipulation, inferences on mathematical statistics are made under the framework of probability theory, which deals with the analysis of random phenomena. A standard statistical procedure involves the test of the relationship between two data sets, or a data set and a synthetic data drawn from idealized model. A hypothesis is proposed for the relationship between the two data sets, and this is compared as an alternative to an idealized null hypothesis of no relationship between two data sets. Rejecting or disproving the hypothesis is done using statistical tests that quantify the sense in which the null can be proven false. Working from a hypothesis, two basic forms of error are recognized, Type I errors and Type II errors. Multiple problems have come to be associated with this framework, ranging from obtaining a sufficient sample size to specifying an adequate null hypothesis, measurement processes that generate statistical data are also subject to error. Many of these errors are classified as random or systematic, the presence of missing data or censoring may result in biased estimates and specific techniques have been developed to address these problems. Statistics continues to be an area of research, for example on the problem of how to analyze Big data. Statistics is a body of science that pertains to the collection, analysis, interpretation or explanation. Some consider statistics to be a mathematical science rather than a branch of mathematics. While many scientific investigations make use of data, statistics is concerned with the use of data in the context of uncertainty, mathematical techniques used for this include mathematical analysis, linear algebra, stochastic analysis, differential equations, and measure-theoretic probability theory. In applying statistics to a problem, it is practice to start with a population or process to be studied. Populations can be diverse topics such as all living in a country or every atom composing a crystal. Ideally, statisticians compile data about the entire population and this may be organized by governmental statistical institutes
19.
Arbitrage
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For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high. People who engage in arbitrage are called arbitrageurs /ˌɑːrbᵻtrɑːˈʒɜːr/—such as a bank or brokerage firm, the term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies. Arbitrage is a French word and denotes a decision by an arbitrator or arbitration tribunal, an arbitrage equilibrium is a precondition for a general economic equilibrium. The no arbitrage assumption is used in finance to calculate a unique risk neutral price for derivatives. This refers to the method of valuing a coupon-bearing financial instrument by discounting its future cash flows by multiple discount rates, by doing so, a more accurate price can be obtained than if the price is calculated with a present-value pricing approach. Arbitrage-free pricing is used for bond valuation and to detect arbitrage opportunities for investors, for the purpose of valuing the price of a bond, its cash flows can each be thought of as packets of incremental cash flows with a large packet upon maturity, being the principal. Since the cash flows are dispersed throughout future periods, they must be discounted back to the present, in the present-value approach, the cash flows are discounted with one discount rate to find the price of the bond. In arbitrage-free pricing, multiple discount rates are used, the present-value approach assumes that the yield of the bond will stay the same until maturity. This is a model because interest rates may fluctuate in the future. The discount rate may be different for each of the flows for this reason. Each cash flow can be considered an instrument that pays one payment upon maturity. The discount rates used should be the rates of multiple bonds with maturity dates the same as each cash flow. By using multiple discount rates, the price is the sum of the discounted cash flows. Arbitrage-free price refers to the price at no price arbitrage is possible. The ideas of using multiple discount rates obtained from zero-coupon bonds, the yield curve is a curve of the yields of the same bond with different maturities. This curve can be used to view trends in market expectations of how interest rates move in the future. In arbitrage-free pricing of a bond, a curve of similar zero-coupon bonds with different maturities is created. If the curve were to be created with Treasury securities of different maturities and this is to transform the bonds into zero-coupon bonds
20.
Profit (accounting)
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Profit, in accounting, is an income distributed to the owner in a profitable market production process. Profit is a measure of profitability which is the major interest in income formation process of market production. There are several measures in common use. Income formation in market production is always a balance between income generation and income distribution, the income generated is always distributed to the stakeholders of production as economic value within the review period. The profit is the share of income formation the owner is able to keep to himself in the distribution process. Profit is one of the sources of economic well-being because it means incomes and opportunities to develop production. The words income, profit and earnings are substitutes in this context, Economic well-being is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human needs. The degree to which the needs are satisfied is often accepted as a measure of economic well-being, in production there are two features which explain increasing economic well-being. They are improving quality-price-ratio of commodities and increasing incomes from growing, all of them produce commodities which have value and contribute to well-being of individuals. The satisfaction of needs originates from the use of the commodities which are produced, the need satisfaction increases when the quality-price-ratio of the commodities improves and more satisfaction is achieved at less cost. Economic well-being also increases due to the growth of incomes that are gained from the growing, market production is the only one production form which creates and distributes incomes to stakeholders. Public production and household production are financed by the incomes generated in market production, thus market production has a double role in creating well-being, i. e. the role of producing developing commodities and the role of creating income. Because of this role, market production is the “primus motor” of economic well-being. In principle there are two main activities in an economy, production and consumption, similarly there are two kinds of actors, producers and consumers. Well-being is made possible by efficient production and by the interaction between producers and consumers, in the interaction, consumers can be identified in two roles both of which generate well-being. Consumers can be both customers of the producers and suppliers to the producers, stakeholders of production are persons, groups or organizations with an interest in a producing company. Economic well-being originates in efficient production and it is distributed through the interaction between the company’s stakeholders, the stakeholders of companies are economic actors which have an economic interest in a company. Based on the similarities of their interests, stakeholders can be classified into three groups in order to differentiate their interests and mutual relations, the three groups are as follows, Customers Suppliers Producers
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Financial capital
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Financial capital generally refers to saved-up financial wealth, especially that used to start or maintain a business. A financial concept of capital is adopted by most entities in preparing their financial reports, under a financial concept of capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity of the entity. Under a physical concept of capital, such as operating capability, capital is regarded as the capacity of the entity based on, for example. Financial capital maintenance can be measured in nominal monetary units or units of constant purchasing power. Framework for the Preparation and Presentation of Financial Statements, Financial capital is provided by lenders for a price, also see time value of money for a more detailed description of how financial capital may be analyzed. Furthermore, financial capital, is any medium or mechanism that represents wealth. It is, however, usually purchasing power in the form of available for the production or purchasing of goods. Capital can also be obtained by producing more than what is immediately required, Financial capital can also be in the form of purchasable items such as computers or books that can contribute directly or indirectly to obtaining various other types of capital. Shareholders may vote at AGMs and be elected as directors, debenture-holders may not vote at AGMs or be elected as directors, shareholders receive profit in the form of dividends, debenture-holders receive a fixed rate of interest. If there is no profit, the shareholder does not receive a dividend, in case of dissolution the firms debenture holders are paid first, before shareholders. Fixed capital is money firms use to purchase assets that will remain permanently in the business, nature of business Size of business Stage of development Capital invested by the owners location of that area Firms use working capital to run their business. For example, money that they use to buy stock, pay expenses, most indigenous forms of money and the modern fiat money are only a symbolic storage of value and not a real storage of value like commodity money. The ratio between debt and equity is named leverage and it has to be optimized as a high leverage can bring a higher profit but create solvency risk. This means the payments made to the shareholders are first paid to the preference shareholder, like money, financial instruments may be backed by state military fiat, credit, or commodity resources. Governments generally closely control the supply of it and usually require some reserve be held by institutions granting credit, trading between various national currency instruments is conducted on a money market. Such trading reveals differences in probability of debt collection or store of value function of that currency, when payment is deferred on any such instrument, typically an interest rate is higher than the standard interest rates paid by banks, or charged by the central bank on its money. Often such instruments are called fixed-income instruments if they have reliable payment schedules associated with the rate of interest. A variable-rate instrument, such as consumer mortgages, will reflect the standard rate for deferred payment set by the central bank prime rate
22.
Capital (economics)
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In economics, capital goods, real capital, or capital assets are already-produced, durable goods or any non-financial asset that is used in production of goods or services. Adam Smith defines capital as That part of a stock which he expects to afford him revenue. The term stock is derived from the Old English word for stump or tree trunk and it has been used to refer to all the moveable property of a farm since at least 1510. In Middle Ages France contracted leases and loans bearing interest specified payment, how a capital good is maintained or returned to its pre-production state varies with the type of capital involved. In most cases capital is replaced after a period as newer forms of capital make continued use of current capital non profitable. It is also possible that advances make a form of capital practical again. Capital is distinct from land in that capital can be increased by human labor, at any given moment in time, total physical capital may be referred to as the capital stock. Capital is an input in the production function, homes and personal autos are not usually defined as capital but as durable goods because they are not used in a production of saleable goods and services. In Marxist political economy, capital is used to buy something only in order to sell it again to realize a financial profit. In more contemporary schools of economics, this form of capital is referred to as financial capital and is distinguished from capital goods. Classical and neoclassical economics regard capital as one of the factors of production, all other inputs to production are called intangibles in classical economics. This includes organization, entrepreneurship, knowledge, goodwill, or management and this is what makes it a factor of production, The good is not used up immediately in the process of production unlike raw materials or intermediate goods. The good can be produced or increased and these distinctions of convenience have carried over to contemporary economic theory. There was the clarification that capital is a stock. As such, its value can be estimated at a point in time, by contrast, investment, as production to be added to the capital stock, is described as taking place over time, thus a flow. Since at least the 1960s economists have increasingly focused on forms of capital. These terms lead to questions and controversies discussed in those articles. It is in the form of assets, traded in financial markets
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Saving
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Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, an account, a pension account. Saving also involves reducing expenditures, such as recurring costs, the former refers to the act of increasing ones assets, whereas the latter refers to one part of ones assets, usually deposits in savings accounts, or to all of ones assets. Saving refers to an activity occurring over time, a variable, whereas savings refers to something that exists at any one time. This distinction is often misunderstood, and even professional economists and investment professionals will often refer to saving as savings, in different contexts there can be subtle differences in what counts as saving. However, in the U. S. measurement of the numbers behind its gross national product, personal interest payments are not treated as saving unless the institutions, Saving is closely related to physical investment, in that the former provides a source of funds for the latter. By not using income to buy goods and services, it is possible for resources to instead be invested by being used to produce fixed capital, such as factories. Saving can therefore be vital to increase the amount of fixed capital available, however, increased saving does not always correspond to increased investment. If savings are stashed in or under a mattress, or otherwise not deposited into an intermediary such as a bank. This means that saving may increase without increasing investment, possibly causing a short-fall of demand rather than to economic growth, in the short term, if saving falls below investment, it can lead to a growth of aggregate demand and an economic boom. In the long term if saving falls below investment it eventually reduces investment, future growth is made possible by foregoing present consumption to increase investment. However savings kept in an amount to an loan to the government or central bank. In a primitive agricultural economy savings might take the form of holding back the best of the corn harvest as seed corn for the planting season. If the whole crop were consumed the economy would convert to hunting and gathering the next season, classical economics posited that interest rates would adjust to equate saving and investment, avoiding a pile-up of inventories. A rise in saving would cause a fall in interest rates, stimulating investment, but Keynes argued that neither saving nor investment was very responsive to interest rates so that large interest rate changes were needed to re-equate them after one changed. Further, it was the demand for and supplies of stocks of money that determined interest rates in the short run, thus, saving could exceed investment for significant amounts of time, causing a general glut and a recession. Within personal finance, the act of saving corresponds to nominal preservation of money for future use. A deposit account paying interest is used to hold money for future needs, i. e. an emergency fund
24.
Real versus nominal value (economics)
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In economics, a real value of a good or other entity has been adjusted for inflation, enabling comparison of quantities as if prices had not changed. Changes in real terms therefore exclude the effect of inflation, in contrast with a real value, a nominal value has not been adjusted for inflation, and so changes in nominal value reflect at least in part the effect of inflation. A representative collection of goods, or commodity bundle, is used for comparison purposes, to measure inflation. The nominal value of the commodity bundle in a year depends on prices current at the time, whereas the real value of the commodity bundle, if it is truly representative. A price index is calculated relative to a base year, indices are typically normalized at 100 in the base year. Starting from a year, a price index Pt represents the price of the commodity bundle over time t. In base year zero, P0 is set to 100, if for example the base year is 1992, real values are expressed in constant 1992 dollars, based at 100 for 1992. Also imagine for example, that the price of the commodity bundle has increased in the first year by 1%, the real value is the value expressed in terms of purchasing power in the base year. The index price divided by its base-year value P t / P0 gives the growth factor of the price index, Real values can be found by dividing the nominal value by the growth factor of a price index. The real growth rate r t is the change from one period to the next of a nominal quantity Q t in real terms and it measures by how much the buying power of the quantity has changed. So 1 + r t = =1 + g t − i t − g t i t + i t 2 + higher order terms. Hence as an approximation, r t = g t − i t The bundle of goods used to measure the Consumer Price Index is applicable to consumers. So for wage earners as consumers, a way to measure real wages is to divide the nominal wage by the growth factor in the CPI. Gross domestic product is a measure of aggregate output, nominal GDP in a particular period reflects prices which were current at the time, whereas real GDP compensates for inflation. Price indices and the U. S. National Income and Product Accounts are constructed from bundles of commodities, in the case of GDP, a suitable price index is the GDP price index. In the U. S. National Income and Product Accounts, nominal GDP is called GDP in current dollars, looking back into the past, the ex post real interest rate is approximately the historical nominal interest rate minus inflation. Looking forward into the future, the real interest rate is approximately the nominal interest rate minus the expected inflation rate. Not only time-series data, as above, but also data which depends on prices which may vary geographically for example
25.
Speculation
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Speculation is the purchase of an asset with the hope that it will become more valuable at a future date. Many speculators pay little attention to the value of a security. Speculation can in principle involve any tradable good or financial instrument, Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives. The number of shareholders increased, perhaps, from 4.4 million in 1900 to 26 million in 1932, the view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation is simply a higher form of investment. Others define speculation more narrowly as positions not characterized as hedging, the agency emphasizes that speculators serve important market functions, but defines excessive speculation as harmful to the proper functioning of futures markets. According to Ben Graham in The Intelligent Investor, the prototypical defensive investor is. one interested chiefly in safety plus freedom from bother, Speculation is condemned on ethical-moral grounds as creating money from money and thereby promoting the vices of avarice and gambling. When a harvest is too small to satisfy consumption at its rate, speculators come in. Their purchases raise the price, thereby checking consumption so that the supply will last longer. Producers encouraged by the price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant and this reduces prices, encouraging consumption and exports and helping to reduce the surplus. If any market, such as pork bellies, had no speculators, with fewer players in the market, there would be a larger spread between the current bid and ask price of pork bellies. By contrast, a commodity speculator may profit the difference in the spread and, in competition with other speculators, some schools of thought argue that speculators increase the liquidity in a market, and therefore promote an efficient market. This efficiency is difficult to achieve without speculators, a very beneficial by-product of speculation for the economy is price discovery. On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, Speculators also perform a very important risk bearing role that is beneficial to society. For example, a farmer might be considering planting corn on some unused farmland, however, he might not want to do so because he is concerned that the price might fall too far by harvest time. By selling his crop in advance at a price to a speculator, he is now able to hedge the price risk. Thus, speculators can actually increase production through their willingness to take on risk, hence, they make the prices better reflect the true quality of operation of the firms
26.
Warren Buffett
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Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is considered by some to be one of the most successful investors in the world and he attended New York Institute of Finance to specialize his economics background and soon after began various business partnerships, including one with Graham. After meeting Charlie Munger, Buffett created the Buffett Partnership and his firm would eventually acquire a textile manufacturing firm called Berkshire Hathaway and assume its name to create a diversified holding company. He is noted for his adherence to value investing and for his personal frugality despite his immense wealth, Buffett is a notable philanthropist, having pledged to give away 99 percent of his fortune to philanthropic causes, primarily via the Bill & Melinda Gates Foundation. Buffett was born in 1930 in Omaha, Nebraska and he was the second of three children and the only son of Leila and Congressman Howard Buffett, Buffett began his education at Rose Hill Elementary School. In 1942, his father was elected to the first of four terms in the United States Congress, after finishing high school and finding success with his side entrepreneurial and investment ventures, Buffett wanted to skip college to go directly into business, but was overruled by his father. Buffett displayed an interest in business and investing at a young age, much of Buffetts early childhood years were enlivened with entrepreneurial ventures. One of his first business ventures, Buffett sold chewing gum, Coca-Cola bottles and he worked in his grandfathers grocery store. While still in school, he made money delivering newspapers, selling golf balls and stamps. On his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle, in 1945, as a high school sophomore, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in three different barber shops across Omaha, the business was sold later in the year for $1,200 to a war veteran. Buffetts interest in the market and investing dated to schoolboy days he spent in the customers lounge of a regional stock brokerage near his fathers own brokerage office. On a trip to New York City at age ten, he made a point to visit the New York Stock Exchange, at 11, he bought three shares of Cities Service Preferred for himself, and three for his sister Doris Buffett. At the age of 15, Warren made more than $175 monthly delivering Washington Post newspapers, in high school, he invested in a business owned by his father and bought a 40-acre farm worked by a tenant farmer. He bought the land when he was 14 years old with $1,200 of his savings, by the time he finished college, Buffett had accumulated $9,800 in savings. In 1947, Buffett entered the Wharton School of the University of Pennsylvania and he would have preferred to focus on his business ventures, however, he enrolled due to pressure from his father. Warren studied there for two years and joined the Alpha Sigma Phi fraternity and he then transferred to the University of Nebraska–Lincoln where at 19, he graduated with a Bachelor of Science in Business Administration. After being rejected by Harvard Business School, Buffett enrolled at Columbia Business School of Columbia University upon learning that Benjamin Graham taught there and he earned a Master of Science in Economics from Columbia in 1951
27.
Forbes
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Forbes is an American business magazine. Published bi-weekly, it features articles on finance, industry, investing. Forbes also reports on related subjects such as technology, communications, science, politics and its headquarters is located in Jersey City, New Jersey. Primary competitors in the business magazine category include Fortune and Bloomberg Businessweek. The magazine is known for its lists and rankings, including its lists of the richest Americans. Another well-known list by the magazine is The Worlds Billionaires list, the motto of Forbes magazine is The Capitalist Tool. Its chairman and editor-in-chief is Steve Forbes, and its CEO is Mike Perlis, Forbes, a financial columnist for the Hearst papers, and his partner Walter Drey, the general manager of the Magazine of Wall Street, founded Forbes magazine on September 15,1917. Forbes provided the money and the name and Drey provided the publishing expertise, the original name of the magazine was Forbes, Devoted to Doers and Doings. Drey became vice-president of the B. C. Forbes Publishing Company, while B. C. Forbes became editor-in-chief, B. C. Forbes was assisted in his later years by his two eldest sons, Bruce Charles Forbes and Malcolm Stevenson Forbes. Bruce Forbes took over on his fathers death, and his strengths lay in streamlining operations, during his tenure, 1954–1964, the magazines circulation nearly doubled. On Malcolms death, his eldest son Malcolm Stevenson Steve Forbes Jr. became President and Chief Executive of Forbes, between 1961 and 1999 the magazine was edited by James Michaels. In 1993, under Michaels, Forbes was a finalist for the National Magazine Award. com, a 2009 New York Times report said,40 percent of the enterprise was sold. For a reported $300 million, setting the value of the enterprise at $750 million, according to Mark M. Edmiston of AdMedia Partners, Its probably not worth half of that now. The companys headquarters moved to the Newport section of downtown Jersey City. In November 2013, Forbes Media, which publishes Forbes magazine, was put up for sale and this was encouraged by Elevation Partners, of whom were minority shareholders. Sales documents prepared by Deutsche Bank revealed that the publishers 2012 EBITDA was $15 million, Forbes reportedly sought a price of $400 million. In July 2014, Forbes sold a majority of itself to Integrated Whale Media Investments, Steve Forbes and his magazines writers offer investment advice on the weekly Fox TV show Forbes on Fox and on Forbes On Radio. Other company groups include Forbes Conference Group, Forbes Investment Advisory Group, from the 2009 Times report, Steve Forbes recently returned from opening up a Forbes magazine in India, bringing the number of foreign editions to 10
28.
Due diligence
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Due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be an obligation, but the term will more commonly apply to voluntary investigations. A common example of due diligence in various industries is the process through which a potential acquirer evaluates a target company or its assets for an acquisition. The broker-dealer community quickly institutionalized, as a practice, the conducting of due diligence investigations of any stock offerings in which they involved themselves. Originally the term was limited to public offerings of equity investments, a reasonable investigation focusing on material future matters. An examination being achieved by asking certain key questions, including, how do we buy, how do we structure an acquisition, an investigation of current practices of process and policies. An examination aiming to make an acquisition decision via the principles of valuation, the due diligence process can be divided into nine distinct areas, It is essential that the concepts of valuations be linked into a due diligence process. This is in order to reduce the number of failed mergers, the relevant areas of concern may include the financial, legal, labor, tax, IT, environment and market/commercial situation of the company. Areas of focus in due diligence continue to develop with cybersecurity emerging as an area of concern for business acquirers, Due Diligence has emerged as a separate profession for accounting and auditing experts. With the number and size of penalties increasing, the Foreign Corrupt Practices Act is causing many U. S. institutions to look into how they all of their relationships overseas. This link could be perceived as leading to the bribing of the foreign officials and this process will be performed indefinitely as long as a relationship exists, and usually involves comparing the companies and executives to a database of foreign officials. This process should be performed on all relationships regardless of location and is part of a wider Integrity Management initiative. While financial institutions are among the most aggressive in defining FCPA best practices, manufacturing, retailing, passed on May 25,2011, the OECD member countries agreed to revise their guidelines promoting tougher standards of corporate behavior, including human rights. As part of this new definition, they utilized a new aspect of due diligence that requires a corporation to investigate third party partners for potential abuse of human rights, Human Rights Impact Assessment is a component of this. The UN formalized guidelines for Human Rights Due Diligence on June 16 with the endorsement of Ruggie’s Guiding Principles for Business, Due diligence in civil procedure is the idea that reasonable investigation is necessary before certain kinds of relief are requested. Due diligence is also a concept found in the civil litigation concept of a statute of limitations, in criminal law, due diligence is the only available defense to a crime that is one of strict liability. Once the criminal offence is proven, the defendant must prove on balance that they did everything possible to prevent the act from happening and it is not enough that they took the normal standard of care in their industry – they must show that they took every reasonable precaution. Due diligence is also used in law to describe the scope of the duty of a prosecutor, to take efforts to turn over potentially exculpatory evidence
29.
Edward O. Thorp
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He was a pioneer in modern applications of probability theory, including the harnessing of very small correlations for reliable financial gain. He is the author of Beat the Dealer, the first book to prove, in 1962. He also developed and applied effective hedge fund techniques in the financial markets, Thorp received his Ph. D. in mathematics from the University of California, Los Angeles in 1958, and worked at the Massachusetts Institute of Technology from 1959 to 1961. He learned Fortran in order to program the equations needed for his research model on the probabilities of winning at blackjack. Thorp subsequently decided to test his theory in practice in Reno, Lake Tahoe, Thorp started his applied research using $10,000, with Manny Kimmel, a wealthy professional gambler and one-time illegal bookie with mob connections, providing the venture capital. First they visited Reno and Lake Tahoe establishments where they tested Thorps theory at the blackjack tables. The experimental results proved successful and his theory was verified since he won $11,000 in a single weekend, casinos now shuffle well before the end of the deck as a countermeasure to his methods. During his Las Vegas casino visits Thorp frequently used such as wraparound glasses. In addition to the activities, Thorp had assembled a baccarat team which was also winning. News quickly spread throughout the community, which was eager for new methods of winning. X. Thorps blackjack research is one of the few examples where results from such research reached the public directly, completely bypassing the usual academic peer review process cycle. Moreover, Thorp became one of the very few applied mathematicians who risked physical harm in verifying a computer simulation and he has also stated that he considered the whole experiment an academic exercise. This also marked the first time in the history of computing that a computer was used as a gambling aid, the wearable computer was co-developed with Claude Shannon between 1960–61. The final operating version of the device was tested in Shannon’s home lab at his basement in June 1961 and his achievements have led him to become an inaugural member of the Blackjack Hall of Fame. He also devised the Thorp count, a method for calculating the likelihood of winning in certain positions in backgammon. Thorps first hedge fund was Princeton/Newport Partners and he is currently the President of Edward O. Thorp & Associates, based in Newport Beach, California. In May 1998, Thorp reported that his personal investments yielded an annualized 20 percent rate of return averaged over 28.5 years. Edward O. Thorp, A Man for All Markets, From Las Vegas to Wall Street, How I Beat the Dealer, the Quants, How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, Crown Business,352 pages,2010
30.
Hedge fund
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It is administered by a professional investment management firm, and often structured as a limited partnership, limited liability company, or similar vehicle. The name hedge fund originated from the long and short positions that the first of these funds used to hedge market risk. Over time, the types and nature of the hedging concepts expanded, today, hedge funds engage in a diverse range of markets and strategies and employ a wide variety of financial instruments and risk management techniques. Hedge funds are available only to certain accredited investors and cannot be offered or sold to the general public. Hedge funds have existed for decades, and became increasingly popular, growing to be a substantial fraction of asset management. Hedge funds are almost always open-ended and allow additions or withdrawals by their investors, the value of an investors holding is directly related to the fund net asset value. Many hedge fund investment strategies aim to achieve a return on investment regardless of whether markets are rising or falling. Hedge fund managers often invest money of their own in the fund they manage, a hedge fund typically pays its investment manager an annual management fee, and a performance fee. Both co-investment and performance fees serve to align the interests of managers with those of the investors in the fund, some hedge funds have several billion dollars of assets under management. The word hedge, meaning a line of bushes around a field, has long used as a metaphor for the placing of limits on risk. Early hedge funds sought to hedge specific investments against general market fluctuations by shorting the market, nowadays, however, many different investment strategies are used, many of which do not hedge risk. During the US bull market of the 1920s, there were numerous private investment vehicles available to wealthy investors. The sociologist Alfred W. Jones is credited with coining the phrase hedged fund and is credited with creating the first hedge fund structure in 1949, although this has been disputed. Jones referred to his fund as being hedged, a term commonly used on Wall Street to describe the management of investment risk due to changes in the financial markets. In the 1970s, hedge funds specialized in a single strategy, many hedge funds closed during the recession of 1969–70 and the 1973–1974 stock market crash due to heavy losses. They received renewed attention in the late 1980s, during the 1990s, the number of hedge funds increased significantly, funded with wealth created during the 1990s stock market rise. The increased interest was due to the aligned-interest compensation structure and the promise of high returns. Over the next decade hedge fund strategies expanded to include, credit arbitrage, distressed debt, fixed income, quantitative, US institutional investors such as pension and endowment funds began allocating greater portions of their portfolios to hedge funds
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Insurance
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Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, an entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder, the insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The amount of money charged by the insurer to the insured for the coverage set forth in the policy is called the premium. If the insured experiences a loss which is covered by the insurance policy. Methods for transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessels capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c.1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the guarantee to cancel the loan should the shipment be stolen. At some point in the 1st millennium BC, the inhabitants of Rhodes created the general average and this allowed groups of merchants to pay to insure their goods being shipped together. The collected premiums would be used to any merchant whose goods were jettisoned during transport. Separate insurance contracts were invented in Genoa in the 14th century, the first known insurance contract dates from Genoa in 1347, and in the next century maritime insurance developed widely and premiums were intuitively varied with risks. These new insurance contracts allowed insurance to be separated from investment, Insurance became far more sophisticated in Enlightenment era Europe, and specialized varieties developed. Property insurance as we know it today can be traced to the Great Fire of London, initially,5,000 homes were insured by his Insurance Office. At the same time, the first insurance schemes for the underwriting of business ventures became available, by the end of the seventeenth century, Londons growing importance as a center for trade was increasing demand for marine insurance. These informal beginnings led to the establishment of the insurance market Lloyds of London and several related shipping, the first life insurance policies were taken out in the early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706 by William Talbot, edward Rowe Mores established the Society for Equitable Assurances on Lives and Survivorship in 1762. In the late 19th century, accident insurance began to become available and this operated much like modern disability insurance. The first company to offer accident insurance was the Railway Passengers Assurance Company, by the late 19th century, governments began to initiate national insurance programs against sickness and old age
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Code of Hammurabi
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The Code of Hammurabi is a well-preserved Babylonian law code of ancient Mesopotamia, dating back to about 1754 BC. It is one of the oldest deciphered writings of significant length in the world, the sixth Babylonian king, Hammurabi, enacted the code, and partial copies exist on a seven and a half foot stone stele and various clay tablets. The code consists of 282 laws, with scaled punishments, adjusting an eye for an eye, nearly one-half of the code deals with matters of contract, establishing, for example, the wages to be paid to an ox driver or a surgeon. Other provisions set the terms of a transaction, establishing the liability of a builder for a house collapses, for example. A third of the code addresses issues concerning household and family such as inheritance, divorce, paternity. Only one provision appears to impose obligations on an official, this establishes that a judge who reaches an incorrect decision is to be fined and removed from the bench permanently. A few provisions address issues related to military service, the code was discovered by modern archaeologists in 1901, and its editio princeps translation published in 1902 by Jean-Vincent Scheil. This nearly complete example of the code is carved into a basalt stele in the shape of an index finger,2.25 m tall. The code is inscribed in the Akkadian language, using cuneiform script carved into the stele, Hammurabi ruled for nearly 42 years, from about 1792 to 1749 BC according to the Middle chronology. On the stone slab are 44 columns and 28 paragraphs that contained 282 laws, some of these laws follow along the rules of an eye for an eye. It had been taken as plunder by the Elamite king Shutruk-Nahhunte in the 12th century BC and was taken to Susa in Elam where it was no longer available to the Babylonian people. The Code of Hammurabi was one of several sets of laws in the ancient Near East, the code of laws was arranged in orderly groups, so that all who read the laws would know what was required of them. These codes come from similar cultures in a small geographical area. The Code of Hammurabi is the longest surviving text from the Old Babylonian period, the code has been seen as an early example of a fundamental law, regulating a government — i. e. a primitive constitution. The code is one of the earliest examples of the idea of presumption of innocence. However, its copying in subsequent generations indicates that it was used as a model of legal and judicial reasoning, the Code issues justice following the three classes of Babylonian society, property owners, freed men, and slaves. For example, if a doctor killed a patient, he would have his hands cut off. Various copies of portions of the Code of Hammurabi have been found on baked clay tablets, the Prologue of the Code of Hammurabi is on such a tablet, also at the Louvre
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Value investing
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Although value investing has taken many forms since its inception, it generally involves buying securities that appear underpriced by some form of fundamental analysis. High-profile proponents of value investing, including Berkshire Hathaway chairman Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value, the discount of the market price to the intrinsic value is what Benjamin Graham called the margin of safety. The intrinsic value is the value of all future distributions. However, the distributions and the appropriate discount rate can only be assumptions. Value investing was established by Benjamin Graham and David Dodd, both professors at Columbia Business School and teachers of many famous investors. In terms of picking stocks, he recommended defensive investment in stocks trading below their tangible book value as a safeguard to adverse future developments often encountered in the stock market, however, the concept of value has evolved significantly since the 1970s. Book value is most useful in industries where most assets are tangible, intangible assets such as patents, brands, or goodwill are difficult to quantify, and may not survive the break-up of a company. When an industry is going through fast technological advancements, the value of its assets is not easily estimated, sometimes, the production power of an asset can be significantly reduced due to competitive disruptive innovation and therefore its value can suffer permanent impairment. One good example of decreasing asset value is a personal computer, an example of where book value does not mean much is the service and retail sectors. One modern model of calculating value is the cash flow model. Value investing has proven to be an investment strategy. There are several ways to evaluate its success, one way is to examine the performance of simple value strategies, such as buying low PE ratio stocks, low price-to-cash-flow ratio stocks, or low price-to-book ratio stocks. Numerous academics have published studies investigating the effects of buying value stocks and these studies have consistently found that value stocks outperform growth stocks and the market as a whole. Simply examining the performance of the best known value investors would not be instructive, in this speech, Buffett examined the performance of those investors who worked at Graham-Newman Corporation and were thus most influenced by Benjamin Graham. Buffetts conclusion is identical to that of the research on simple value investing strategies—value investing is, on average. During about a 25-year period, published research and articles in leading journals of the value ilk were few, Warren Buffett once commented, You couldnt advance in a finance department in this country unless you thought that the world was flat. Benjamin Graham is regarded by many to be the father of value investing, along with David Dodd, he wrote Security Analysis, first published in 1934. Graham later wrote The Intelligent Investor, a book that brought value investing to individual investors
