ARTHUR REIS

THE STOCK MARKET

WHAT IS A SHARE?

• A publicly traded company shares fractions of its ownership.

• Any investor can buy this SHARE OF STOCK at a Stock Exchange, becoming a business partner of the corporation.

• Advantages:For the owners: For the

investors:$ $

TYPES OF SHARES

• COMMON stock: Voting rights (business meetings) and dividend payments.Attract most individual investors (EUA).

eg: PETR3

• PREFERRED stock:Priority claim to company profits.Attract most minority shareholders (BRA).

eg: PETR4

SOME CONCEPTS

• RISK (systematic or not)• LIQUIDITY (blue chips)• APPRECIATION and DIVIDENDS• CORPORATE GOVERNANCE

(accountability)• Hedger x Speculator

WAYS OF QUICK PROFIT

• How to overcome the indexes?• LEVERAGE: the technique to multiply

GAIN and LOSSES.• OPTION: contract between two parties

for a future transaction on an asset at a reference price.

• FORWARD CONTRACT: contract between two parties to buy or sell an asset at a specified future time at a price agreed today.

STOCK EXCHANGES

http://en.wikipedia.org/wiki/Stock_exchanges

BM&FBOVESPA

• Formed in 2008 by the integration of “Bolsa de Valores de Sao Paulo” with “Bolsa de Mercadorias e Futuros”

• Are negotiated assets of almost 600 companies and some commodities.

STOCK MARKET INDEXES

STOCK MARKET INDEXES

https://www.agorainvest.com.br/cotacoes/default.asp

SCHOOLS OF INVESTMENT ANALYSIS

• FUNDAMENTAL analysis:involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets.

• TECHNICAL anaysis:security analysis discipline for forecasting the direction of prices through the study of past market price and volume.

TECHNICAL ANALYSIS

• Dow Theory: “the future repeat the past”• The Market Trends

BUY

HOLD

SELL

GRAPHS

J F M A M J J A S O N D0

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ARTU3

ARTU3

GRAPHS

GRAPHS

THE HOME BROKER

THANK YOU AND GOOD LUCK!

arthur.reis@engenharia.ufjf.br