Archive for the ‘Term Of The Day’ Category
Term of the day
August 6th, 2010
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Institutional Buyout - IBO
When an institutional investor, such as a private equity firm or a venture capitalist firm, acquires a controlling interest in a separate company. Institutional buyouts are the opposite of management buyouts (MBO), in which a business’s current management acquires a large part of the company. Typically, the investor in an IBO will look to dispose of its stake in the company within a certain time frame
Source: www.investopedia.com
Term Of The Day - Mint Ratio
July 22nd, 2010
Mukesh Dedhia
What Does it Mean?
1. The price of an ounce of gold divided by the price of an ounce of silver. The min ratio aims to examine the relationship between gold and silver prices.
2. A fixed rate of exchange for gold and silver.
Source: www.investopedia.com
Term Of The Day - Dutch Disease
July 12th, 2010
Mukesh Dedhia
What Does it Mean?
Negative consequences arising from large increases in a country’s income. Dutch disease is primarily associated with a natural resource discovery, but it can result from any large increase in foreign currency, including foreign direct investment, foreign aid or a substantial increase in natural resource prices.
Source: www.investopedia.com
Term Of The Day - Organic Growth
June 11th, 2010
Mukesh Dedhia
What Does it Mean?
The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic.
Source: www.investopedia.com
Term Of The Day - Double Entry
June 3rd, 2010
Mukesh Dedhia
What Does it Mean?
The fundamental concept underlying present-day bookkeeping and accounting. Double entry accounting is based on the fact that every financial transaction has equal and opposite effects in at least two different accounts. It is used to satisfy the equation Assets = Liabilities + Equity, whereby each entry is recorded so as to maintain the relationship.
Source: www.investopedia.com
Term Of The Day - Cost Of Carry
June 2nd, 2010
Mukesh Dedhia
What Does it Mean?
Costs incurred as a result of an investment position. These costs can include financial costs, such as the interest costs on bonds, interest expenses on margin accounts and interest on loans used to purchase a security, and economic costs, such as the opportunity costs associated with taking the initial position.
Source: www.investopedia.com
Term Of The Day - Crisis Management
June 2nd, 2010
Mukesh Dedhia
What Does it Mean?
The identification of threats to an organization and its stakeholders, and the methods used by the organization to deal with these threats. Due to the unpredictability of global events, organizations must be able to cope with the potential for drastic changes to the way they conduct business. Crisis management often requires decisions to be made within a short time frame, and often after an event has already taken place. In order to reduce uncertainty in the event of a crisis, organizations often create a crisis management plan.
Source: www.investopedia.com
Term Of The Day - Capitulation
May 26th, 2010
Mukesh Dedhia
What Does it Mean?
When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.
The term is a derived from a military term which refers to surrender.
Source: www.investopedia.com
Term Of The Day - Flight To Quality
May 26th, 2010
Mukesh Dedhia
What Does it Mean?
The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets.
Source: www.investopedia.com
Term Of The Day - Black Swan
May 12th, 2010
Mukesh Dedhia
What Does it Mean?
An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader.
Source : www.investopedia.com