We now embark upon the task actually identifying the value of a stock. How much is a stock worth? What techniques are available to determine the value of stock? In this session, we introduce the idea of stock valuation and then look at the price ratio models. As we will see, predicting the future price of a stock is anything but easy!

What is the difference between a broker and a dealer (a.k.a. market maker)? Brokers charge commissions and dealers (a.k.a. market makers) make money from the difference (a.k.a. the spread) between what they buy and sell the security. This video uses the Casas de Cambio (money exchange houses) along the San Diego / Tijuana border to demonstrate how brokers and dealers charge investors for their services.

This final Introduction to Stocks presentation discusses various stock investment strategies including buy and hold, income, growth, aggressive growth, contrarian, and a few others that are best left unspoken in polite company.

This next-to-last Introduction to Stocks presentation describes the major categories of stocks, including blue chip, income, growth, speculative, cyclical, defensive, turnaround, asset play, penny, and foreign stocks. We then turn our attention to market capitalization and the three major capitalization categories, large cap, mid cap, and small cap. Market capitalization is the fancy term we use for what investors believe a company is worth.

Our fifth presentation covers more stock characteristics including stock spin offs, stock splits, treasury stock, and stock classifications. We pay special attention to earnings and dividends and begin analyzing the various numeric measures that are used when valuing a stock. (We will discuss stock valuation in detail in the next chapter.)

After referring to them since the beginning of the semester, finally we define and discuss the major stock market averages and indexes that we use to measure the performance of various parts of the stock markets. As we saw in chapter 4 on mutual funds, market indexes have become very important because of the increasing number of index funds and ETFs (exchange traded funds), many of which make their way into employer sponsored retirement plans such as 401(k) and 403(b) plans.

This presentation covers stock transactions, commissions, and other transaction fees. Transaction costs have fallen dramatically but we as retail investors are often unaware of all the costs associated with stock transactions. We also take a look at various stock quote sources.

In this presentation, we discuss the major stock market exchanges including the New York Stock Exchange, the American Stock Exchange (now called the NYSE American), and the NASDAQ, as well as the less reputable over-the-counter markets such as the Bulletin Board and the Pink Sheets (now called the OTC Markets). What we will see is that technology and the urge to consolidate are changing the industry at breakneck speed.

Stocks are exciting! Stocks are sexy! Stocks are risky! We begin our in-depth study of stocks with an introduction to the basic concepts of common stock investing and the stock markets where stocks are traded. We look at the reasons investor choose stocks, historical returns, and their advantages and disadvantages.

This session covers just a few of the many dozens of mutual fund families. We take a quick look at some of the many convenient mutual fund services and some of the many mutual fund information resources. We end by looking a sample mutual fund and then look at many successful mutual funds, all of which have been in existence for more than 50 years and have returned close to 10% or more. Yes, 10% per year, even after 2008. Hard to believe, huh?

With over 12,000 mutual funds, how and where do you start the process of categorizing them all? This presentation discusses the most important mutual fund categories. We start with the most riskiest mutual funds and work our way through to the least riskiest. We end with discussions of lifestyle (a.k.a. target date) funds, index funds, ETFs (exchange-traded funds), and the some of the more off-beat and arcane mutual fund categories.

How do mutual funds earn their money? Many investors do not understand the ways that mutual charge for their services. After this presentation, you are going to understand how the mutual funds charge you. You may not like it but at least you will understand it. And since it is very likely that most all of us will be mutual funds investors at one time or another -- maybe most of our adult lives -- it is important for us to understand how the mutual funds are charging us.

In the future, if you are an employee in the United States, there is a strong probability that you will be presented with an employer-sponsored retirement plan such as a 401(k), 403(b), or some other similar program. The vast majority of these plans use mutual funds as their investment vehicles. For this reason, it is important for you to understand mutual funds, even if you hire someone to make your mutual fund choices. This session introduces the basics of mutual funds. In later sessions,...

Short-term investments are often simply referred to as cash. These instruments are very liquid and safe, often guaranteed. They should be used only when you need your money soon, within a year or so, maybe up to 2 or even 3 years for some people. Although they are usually thought of as risk-free, there are indeed risks when placing money in short-term investments. This session will help you learn when -- and when not -- to use short-term investments

Here it is! The entire semester in a nutshell. This session goes into detail about the relationship between risk and return. We cover the widely used, yet imperfect measurement for risk, standard deviation, and show how historically, the investments with the highest rates of return have demonstrated the greatest risk. Do you want to eat well or do you want to sleep well?

What are the major investment asset classes? What returns can we reasonably expect from each over the long term? What risks are involved with each investment type? This presentation will answer these preliminary questions about the major investment types from general perspective. (Relax. We will get into the details about each as the course progresses. For now, make sure you understand what is in the presentation.)

This initial presentation is a gentle introduction to the concept of investing. You do not need any prior investment experience. Forget everything that you have heard from the talking heads on television or the InfernalNet or your brother-in-law, the self-anointed financial wizard. We start from the very beginning with the simple question, "What is an investment?"

In this presentation, we start by looking at yield spreads and the yield curve and how the yield curve has been a very good indicator of the near-term future of the economy. We then turn our attention to the task of computing the value of a bond. The method should look very familiar since it is almost exactly the same as one of the methods we used for computing the value of stocks. The big difference is bonds are far more predictable than stocks so we can assign a much higher level of...

Bonds are not very ... well, they are more kinda' like ... uh, how shall we say it? Okay, let's not mince words: Bonds are boring! Stocks are exciting, sexy, and dangerous. Bonds are stodgy, reliable, and, yes, boring. In this first session, we introduce bonds and many of their characteristics and spend a great amount of time discussing the relationship of bonds and interest rates. Should you own bonds in your portfolio? Let's find out.

Can you beat the market? Many investors believe they can. Yet, the truth is that it is not an easy task. In this presentation, we discuss some of the research that led some academics to theorize that it is actually impossible to beat the market. It's too bad for them that there are many individuals and groups that have been able to do better than the market over long periods of time. We will take a look at some of them and also review some famous myths and stupid sayings.

Get out those financial statements and let's calculate some financial ratios. In the second part of the chapter 17 presentation, we compute the profitability, liquidity, activity, and leverage financial ratios for Ford, the popular car manufacturer. On your own, it would a great exercise to do the same for their major competitors such as GM, Honda, or Toyota.

All publicly-traded companies must supply financial statements every quarter. Analysts and investors use these documents to conduct financial ratio analysis. We have already discussed some of the important ratios. In this initial presentation of chapter 17, we will review those ratios as well as take a deeper look at the very popular Price-to-Earnings ratio (P/E). In the second presentation of chapter 17, we will introduce and discuss other important financial ratios using the financial...

The Discounted Cash Flow Model is the last Dividend Discount Model that we will study. It is also the most powerful. In addition, the previous Dividend Discount Models all expected the company to be paying dividends. But what if the company does not pay any dividends? We can also use the Discounted Cash Flow Model to assign a value to a stock that pays no dividends. Very cool! (In fact, we can use this model with any potential investment – stay tuned.) Lastly, all these models use future...

Welcome to the heart of our course! We are going to learn how to discount a future stream of dividend income. Huh? What that means is that we are going to learn how to assign a value to the stock on the basis of the cash flows that result from the dividends that the stock is paying. To do this, we will use the Dividend Discount Models. This is it, Dear Students! This is the heart of our course!