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what is the plowback ratio | the plowback ratio is a fundamental analysis ratio that measures how much earnings are retained after dividends are paid out it is most often referred to as the retention ratio the opposite metric measuring how much in dividends are paid out as a percentage of earnings is known as the payout ratio the formula for the p... | |
what does the plowback ratio tell you | the plowback ratio is an indicator of how much profit is retained in a business rather than paid out to investors younger businesses tend to have higher plowback ratios these faster growing companies are more focused on business development more mature businesses are not as reliant on reinvesting profit to expand opera... | |
what is the plowback ratio | the plowback ratio is a fundamental analysis ratio that measures how much earnings are retained after dividends are paid out it is most often referred to as the retention ratio the opposite metric measuring how much in dividends are paid out as a percentage of earnings is known as the payout ratio the formula for the p... | |
what does the plowback ratio tell you | the plowback ratio is an indicator of how much profit is retained in a business rather than paid out to investors younger businesses tend to have higher plowback ratios these faster growing companies are more focused on business development more mature businesses are not as reliant on reinvesting profit to expand opera... | |
what is a point and figure p f chart | a point and figure chart plots price movements for stocks bonds commodities or futures without taking into consideration the passage of time contrary to some other types of charts like candlesticks which mark the degree of an asset s movement over set time periods p f charts utilize columns consisting of stacked x s or... | |
how to calculate point and figure p f charts | point and figure charts don t require calculation but they do require at least two variables to be set one variable is the box size the box size can be a specific dollar amount such as 1 a percentage such as 3 of the current price or it can be based on average true range atr which means the box size will fluctuate base... | |
what does a point and figure p f chart tell you | point and figure charts often provide technical analysts with different trade and trend signals relative to traditional candlestick or bar charts while some analysts rely more heavily on the point and figure charts others use these charts to confirm signals provided by traditional charts in an effort to avoid false bre... | |
what is a point of purchase pop | a point of purchase pop is a term used by marketers and retailers when planning the placement of consumer products such as product displays strategically placed in a grocery store aisle or advertised in a weekly flyer this term is similar to the point of sale pos which is the point at which a customer purchases and pay... | |
how do points of purchase pops exist | pops may be real as in the case of a brick and mortar store or virtual as in the case of an online retailer | |
how does point of purchase work in conjunction with point of sale pos | pop takes pos systems and experiences into account pos systems frequently use hardware or software tailored to a particular industry or business | |
what does the future hold for pop | pop display manufacturers focus on improving aesthetics and on creating innovative product designs competition in the retail industry and the resulting use of pop displays encourage retailers to demand different customized displays the bottom linemarketers and retailers use a point of purchase pop when they plan the pl... | |
what is a pos | a pos or point of sale is a device that enables merchants to process payments and log transactions it is essentially a computer based cash register with software capable of tallying up orders taking payments monitoring inventory and buying trends creating invoices and collecting marketing data pos technology includes c... | |
how a pos works | the chief job of the pos is to calculate the total cost of an order take payment and log the transaction the process starts by recording the items to be purchased in a supermarket for example this would involve entering the items into the pos with a barcode scanner the software will record all the data including the na... | |
what was the first point of sale pos system | the first point of sale pos system was the cash register which was invented in 1879 by james ritty a saloon owner in ohio users were able to record transactions on the register allowing for better bookkeeping and capital management ritty sold his invention to national cash register ncr corp five years later 4 | |
what are the advantages of a pos system | advantages of a pos system include | |
what are the disadvantages of a pos system | disadvantages of a pos system include the bottom linea point of sale pos device processes transactions by retail customers such a device may be physical in a brick and mortar store or virtual as a checkout point in an online store the software for pos devices allows retailers to monitor inventory and buying trends trac... | |
what is a poison pill | poison pills are a defense strategy used by the directors of a public company to prevent activist investors competitors or other would be acquirers from taking control of the company there are several types of poison pills the most common type is the flip in executed by issuing more shares to all shareholders except th... | |
how poison pills work | the poison pill is a tactic companies use to deter takeovers by unwanted companies often called a shareholder rights plan it is meant to frustrate creeping acquisitions of control in which the acquirer seeks to accumulate a controlling or dominant stake without negotiating with the board or offering the same deal to ev... | |
when announcing the poison pill s adoption the company stated | schnatter filed suit over some of the poison pill s provisions settling it the following year along with other litigation against the company 19 he reduced his stake to less than 4 by 2020 20in 2012 netflix nflx announced a poison pill days after billionaire investor carl icahn and affiliates disclosed a stake of nearl... | |
why are poison pills used | poison pills prevent an activist investor or a potential acquirer from gaining control of a publicly traded company without the consent of the company s board deals involving the board s consent to a change of control typically provide a significant premium over the market price for all shareholders in contrast to the ... | |
what are the disadvantages of poison pills | poison pills can help self serving incumbent managers and boards frustrate shareholder efforts to oust them to improve the company s performance as a result corporate governance advisors recommend companies limit their scope and duration ensure that such plans address a specific goal or threat and have a high triggerin... | |
what s the legal precedent for poison pills | in delaware where many large listed companies are incorporated the courts have held that corporate boards have broad discretion in preventing the accumulation of controlling stakes provided their response is proportional and based on a reasonable perception of a threat 25the bottom linepoison pills are provisions compa... | |
what is a poisson distribution | in statistics a poisson distribution is a discrete probability distribution that tells how many times an event is likely to occur over a specified period it is a count distribution the parameter of which is lambda the mean number of events in the specific interval as the poisson distribution is a discrete function the ... | |
when should the poisson distribution be used | the poisson distribution is best applied to statistical analysis when the variable in question is a count variable for instance how many times x occurs based on one or more explanatory variables for instance to estimate how many defective products will come off an assembly line given different inputs | |
what assumptions does the poisson distribution make | in order for the poisson distribution to be accurate all events are independent of each other the rate of events through time is constant and events cannot occur simultaneously moreover the mean and the variance will be equal to one another | |
is the poisson distribution discrete or continuous | because it measures discrete counts the poisson distribution is also a discrete distribution this can be contrasted with the normal distribution which is continuous the bottom linea poisson distribution is a probability distribution that is used to predict the amount of variation from an average rate of occurrence in a... | |
what is a political action committee pac | in the u s a political action committee pac is a political committee that pools campaign contributions from members and donates those funds to campaigns for or against candidates ballot initiatives or legislation pacs are typically formed to represent business labor or ideological interests by individuals who wish to p... | |
how a political action committee works | at the federal level an organization is considered a pac when it receives or spends more than 1 000 for the purpose of influencing a federal election there are many types of restrictions that guide how pacs are able to fundraise and to donate their contributions to political campaigns or causes they can contribute 5 00... | |
what is an example of a pac | there are plenty of examples of pacs in various sizes one of the biggest pacs in terms of contributions to candidates is the national association of realtors pac which was formed by the national association of realtors to promote the interests of its industry 4who can start a pac individuals and groups can set up nonco... | |
what are advantages of super pacs | unlike traditional pacs there are no limits to how much a super pac can fundraise from contributors including corporations individuals unions and others in addition while super pacs disclose their contributors contributors themselves can shield their identities such as through the use of shell corporations the bottom l... | |
what is political economy | political economy is an interdisciplinary branch of the social sciences it focuses on the interrelationships of individuals governments and public policy political economists study how economic theories such as capitalism socialism and communism work in the real world any economic theory is a means of directing the dis... | |
what does political economy mean | the term political economy refers to a branch of social sciences that focuses on relationships between individuals governments and public policy it is also used to describe the policies set by governments that affect their nations economies | |
what is the primary concern of political economy | the main concerns of political economy are the relationship between governments and individuals and how public policy affects society these are determined through the study of sociology politics and economics | |
what are the characteristics of political economy | some of the characteristics or themes of a political economy include the distribution of wealth how goods and services are produced who owns property and other resources who profits from production supply and demand and how public policy and government interaction impact society who coined the term political economy ad... | |
what is political risk | political risk is the risk an investment s returns could suffer as a result of political changes or instability in a country instability affecting investment returns could stem from a change in government legislative bodies other foreign policymakers or military control political risk is also known as geopolitical risk... | |
what is a ponzi scheme | a ponzi scheme is an investment scam that pays early investors with money taken from later investors to create an illusion of big profits a ponzi scheme promises a high rate of return with little risk to the investor it relies on word of mouth as new investors hear about the big returns earned by early investors inevit... | |
when the flow of new investment slows the scam artist doesn t have enough money to pay out those supposed profits that s when the ponzi scheme collapses | origins of the ponzi schemethe ponzi scheme gets its name from a swindler named charles ponzi who in 1920 became a millionaire by promoting a nonexistent investing opportunity 1ponzi wasn t the first to perpetrate this type of fraud earlier schemes were reported in the 19th century and charles dickens dramatized the me... | |
what is an example of a ponzi scheme | adam promises a 10 return on a 1 000 loan to his friend barry barry gives adam 1 000 with the expectation that he ll be paid 1 100 in one year next adam promises 10 returns to his friend christine christine gives adam 2 000 with 3 000 now on hand adam pays barry his 1 100 he spends the rest of the money confident that ... | |
what s the difference between a ponzi scheme and a pyramid scheme | both a ponzi scheme and a pyramid scheme rely on a steady stream of new investors who are motivated by reports of the big profits earned by early investors a ponzi scheme repays each investor using money deposited by new investors falsifying records of nonexistent transactions to characterize the money as profit a pyra... | |
why is it called a ponzi scheme | ponzi schemes are named after charles ponzi a businessman who successfully persuaded tens of thousands of clients to invest their money in a nonexistent venture for a guaranteed high profit ponzi s earliest clients got their money but it was paid out of money contributed by later investors ponzi made millions before hi... | |
how do you identify a ponzi scheme | the sec has identified a few traits that often signify a fraudulent financial scheme if an investment opportunity guarantees a specific high rate of return guarantees that return by a certain time and is not registered with the sec the sec advises caution 11 | |
what is the most famous ponzi scheme | the most famous modern ponzi scheme was orchestrated by bernie madoff his firm defrauded thousands of investors out of billions of dollars over decades the scheme unraveled when he was unable to meet an unexpectedly high level of withdrawals the bottom linethe con artists who create ponzi schemes aren t investing their... | |
what are pooled funds | pooled funds are funds in a portfolio from many individual investors that are aggregated for the purposes of investment mutual funds hedge funds exchange traded funds pension funds and unit investment trusts are all examples of professionally managed pooled funds investors in pooled funds benefit from economies of scal... | |
when investing in a professionally managed fund an investor gives up control to the money manager running it in addition he incurs additional costs in the form of management fees charged annually as a percentage of the assets under management aum fees reduce a fund s total return | some mutual funds also charge a load or sales charge funds will vary on when this fee is billed but most common are front end loads paid at the time of purchase and back end loads paid at the time of divesting an investor will file and pay taxes on fund distributed capital gains these profits are spread evenly among al... | |
what is population | population is a statistical term that designates the pool from which a sample is drawn for a study any selection grouped by a common feature can be considered a population a sample is a statistically significant portion of a population understanding populationsstatisticians scientists and analysts prefer to know the ch... | |
how to measure a population | the difficulty in measuring a population lies in whatever you re attempting to analyze and what you re trying to accomplish data must be collected through surveys measurements observation or other methods gathering the data on a large population generally isn t done because of the costs time and resources required to o... | |
what is a population mean | a population mean is the average of whatever value you re measuring in a given population 3 | |
what are two examples of population | an example of a population might be all green eyed children in the u s under age 12 another could be all the great white sharks in the ocean | |
what is the best example of a population | imagine you re a teacher trying to see how well your fifth grade math class did on a standardized test compared to all fifth graders in the u s the population would be all fifth grade math scores in the country the bottom linea population is the statistical pool being studied from which data is extracted populations ca... | |
what is pork barrel politics | pork barrel politics refers the legislative practice of slipping funding for a local project into a broader budget even when said project may have little or nothing to do with the larger bill often this funding may primarily benefit the legislator s home district serving to garner or preserve political support among co... | |
what does the pork barrel represent | prior the advent of refrigeration pork barrels were literal barrels made of wood which preserved salted pork today the term has become an emblem of wasteful government spending | |
what is an example of pork barrel | one of the most infamous and commonly cited examples of pork barrel spending is a proposed 400 million bridge which would have connected the town of ketchika alaska with gravina island where there was located an airport elected officials from alaska were vocal proponents of the proposal but it was held up as an egregio... | |
how much has been spent on pork barrel projects | it s challenging to estimate the amount that has been spent on pork barrel projects because the term isn t officially defined nor do all forms of wasteful spending get classified as pork barrel spending according to cagw the fiscal year 2022 saw 7 396 earmarks costing around 26 1 billion 6 this is just one organization... | |
what is the porter diamond model | the porter diamond theory of national advantage or the porter diamond model is a model that describes the competitive advantage that nations or groups possess based on factors available to them the theory explains how governments can act to improve a country s position in a globally competitive economic environment cre... | |
why does the porter diamond model consider factor conditions as most important | the porter diamond model purports that a country s economy can create skilled labor technological innovation infrastructure and capital and these factors outweigh naturally inherited factors such as land and natural resources | |
how have countries developed factor conditions to create a better economy | japan has developed a competitive global economic presence beyond the country s inherent resources by producing a large number of engineers that have helped drive technological innovation in japanese industries 2 | |
how can the porter diamond model help businesses improve | the theory helps businesses understand why certain industries are widespread in some nations companies can then analyze and compare their position in the market and implement strategies to compete | |
what is porter s five forces model | similar to the porter diamond model porter s five forces model of business strategy identifies and analyzes five competitive forces that shape every industry and help determine an industry s weaknesses and strengths the bottom linethe porter diamond model explains the factors that provide a competitive advantage for on... | |
what are porter s five forces | michael porter s five force strategic analysis model introduced in a 1979 article published in the harvard business review remains a fundamental tool for strategic analysts plotting the competitive landscape of an industry 1in a bid to mirror the complexity real strategists would face while keeping their strategic anal... | |
when customers have more strength they can exert pressure on businesses to provide better products or services at lower prices this force intensifies under certain conditions | porter chose the metaphor of forces because they aren t static so business must constantly adjust their strategies as forces in an industry change | |
when customers can find substitutes for a sector s services that s a major threat to the companies in that industry 2 | here are some ways that this threat can be magnified competitive measures | |
when published michael porter s framework marked a departure from the then dominant models of business strategy steeped in classic competition theory 4 | those models still echoed in economics 101 textbooks rested on several key if questionable assumptions markets as arenas for many small firms with no significant market power homogeneous products perfect information symmetry and no barriers to market entry or exit while helpful for learning basic principles this ideali... | |
how does porter s five forces differ from swot analysis | both are strategic planning tools but they serve different purposes the five force model analyzes the competitive environment of an industry looking at its intensity and the bargaining power of suppliers and customers swot analysis meanwhile is broader and assesses a company s internal strengths and weaknesses as well ... | |
how can porter s five forces address the effects of globalization on an industry | porter s model has been used to analyze how globalization affects industry competition for instance globalization lowers barriers to entry in specific industries intensifying the threat of new entrants from different regions 2it can also expand the pool of potential substitutes and alter the power dynamics with supplie... | |
how does porter s five forces model apply to the ai sector | using the model we would begin by looking at the competitive rivalry the ai sector is marked by high competition with key players ranging from tech giants to small startups rapid advances mean companies have to move quickly simply to maintain relevance we would then need to gauge the power of suppliers of data sets and... | |
what is a portfolio investment | a portfolio investment is ownership of a stock bond or other financial asset with the expectation that it will earn a return or grow in value over time or both it entails passive or hands off ownership of assets as opposed to direct investment which would involve an active management role portfolio investment may be di... | |
portfolio management is the art of selecting and overseeing a group of investments that meet the long term financial objectives and risk tolerance of a client a company or an institution | some individuals do their own investment portfolio management this requires an in depth understanding of the key elements of portfolio building and maintenance that make for success including asset allocation diversification and rebalancing understanding portfolio managementprofessional licensed portfolio managers work... | |
how do i determine my risk tolerance | determining your risk tolerance involves assessing your willingness and ability to endure market volatility and potential losses this can be influenced by your financial goals investment time horizon income and personal comfort with risk tools like risk tolerance questionnaires can help quantify your risk tolerance by ... | |
what is asset allocation | asset allocation involves spreading the investor s money among different asset classes so that risks are reduced and opportunities are maximized stocks bonds and cash are the three most common asset classes but others include real estate commodities currencies and crypto within each of these are subclasses that play in... | |
what should i do if my portfolio has significant losses | if this happens it s important to avoid panic selling and instead assess the situation calmly start by reviewing your investment strategy to ensure it still aligns with your long term goals and risk tolerance consider whether the losses are because of market volatility or fundamental changes in the assets you hold reba... | |
how do i evaluate how my portfolio is doing | evaluating the performance of your portfolio involves comparing its returns against benchmarks typically indexes that offer a mix like you re aiming for in your portfolio and considering your investment goals data to review include total return your risk adjusted return and the performance of individual assets relative... | |
what is a portfolio manager | the term portfolio manager refers to a financial professional who makes investment decisions for individual and or institutional investors portfolio managers develop and implement investment strategies and manage the day to day trading of a portfolio these professionals may be responsible for managing an individual inv... | |
what makes a good portfolio manager | regardless of the investment approach all portfolio managers need to have very specific qualities to be successful the first is ideation if the portfolio manager is active then the ability to have original investment insight is paramount if the manager takes a passive approach the originating insight comes in the form ... | |
how much do portfolio managers earn | a portfolio manager s salary depends entirely on several factors including the company they work for the city location where they work their experience and the type of portfolio they manage according to glassdoor the average base pay for a portfolio manager ranges from 88 000 to 149 000 per year their take home pay may... | |
how are portfolio managers compensated | portfolio managers often receive a base salary this figure depends on the company they work for the geographic location and their experience among other factors in some cases these professionals may also get additional compensation including bonuses commissions benefits and stock options | |
what skills do you need to become a portfolio manager | portfolio managers need a range of skills to be successful including communication research and analytical skills risk management portfolio construction and the ability to work independently and with others the bottom lineit s important for investors to do their research when it comes to making key decisions about thei... | |
a portfolio is a collection of financial investments like stocks bonds commodities cash and cash equivalents including closed end funds and exchange traded funds etfs | people generally believe that stocks bonds and cash comprise the core of a portfolio though this is often the case it does not need to be the rule a portfolio may contain a wide range of assets including real estate art and private investments you may choose to hold and manage your portfolio yourself or you may allow a... | |
how you choose to do it is up to you your goals for the future your appetite for risk and your personality are all factors in deciding how to build your portfolio | regardless of your portfolio s asset mix all portfolios should contain some degree of diversification and reflect the investor s tolerance for risk return objectives time horizon and other pertinent constraints including tax position liquidity needs legal situations and unique circumstances the word portfolio comes fro... | |
when you use a portfolio for investment purposes you expect that the stock bond or another financial asset will earn a return or grow in value over time or both a portfolio investment may be either strategic where you buy financial assets with the intention of holding onto those assets for a long time or tactical where... | aggressive equities focused portfoliothe underlying assets in an aggressive portfolio generally would assume great risks in search of great returns aggressive investors seek out companies that are in the early stages of their growth and have a unique value proposition most of them are not yet common household names def... | |
how do you create a financial portfolio | building an investment portfolio requires more effort than the passive index investing approach first you need to identify your goals risk tolerance and time horizon then research and select stocks or other investments that fit within those parameters regular monitoring and updating are often required along with entry ... | |
what does a good portfolio look like | a good portfolio will depend on your investment style goals risk tolerance and time horizon generally speaking a good degree of diversification is recommended regardless of the portfolio type in order to not hold all of your eggs in one basket | |
how do you measure a portfolio s risk | a portfolio s standard deviation of returns or variance is often used as a proxy of overall portfolio risk the standard deviation calculation is not merely a weighted average of the individual assets standard deviations it must also account for the co variance among the different holdings for a two asset portfolio the ... | |
what is portfolio runoff | portfolio runoff means assets with a finite term are not replaced as they mature | |
when the principal invested in a fixed income security with a set maturity is repaid the investor must decide whether to reinvest it when the proceeds from matured bonds are not reinvested a portfolio can be said to be in runoff | balance sheet runofffor a bank or lender portfolio runoff can occur if it can t make new loans quickly enough to replace the repaid ones it made previously runoff can also occur when early prepayments are allowed or as defaults occur banks can experience runoff when individuals and businesses withdraw capital to invest... | |
what is portfolio turnover | portfolio turnover is a measure of how frequently assets within a fund are bought and sold by the managers portfolio turnover is calculated by taking either the total amount of new securities purchased or the number of securities sold whichever is less over a particular period divided by the total net asset value nav o... | |
what is portfolio variance | portfolio variance is a measurement of risk of how the aggregate actual returns of a set of securities making up a portfolio fluctuate over time this portfolio variance statistic is calculated using the standard deviations of each security in the portfolio as well as the correlations of each security pair in the portfo... | |
where | the portfolio variance is equivalent to the portfolio standard deviation squared as the number of assets in the portfolio grows the terms in the formula for variance increase exponentially for example a three asset portfolio has six terms in the variance calculation while a five asset portfolio has 15 using software li... | |
what is portfolio variance | portfolio variance measures the risk in a given portfolio based on the variance of the individual assets that make up the portfolio the portfolio variance is equal to the portfolio s standard deviation squared | |
how is variance used in constructing a portfolio | most portfolio managers seek to minimize risk and maximize value along the lines of modern portfolio theory mpt the greater the variance in the portfolio indicates the greater the variance of the individual assets and hence the greater the risk portfolio managers thus seek to reduce risk by incorporating assets with lo... | |
where does standard deviation fit in | most portfolio analysts focus on the standard deviation of the portfolio as a whole to get the best picture of the range of outcomes in the portfolio standard deviation is the square root of the variance and provides a more realistic look at the level of risk of the portfolio the higher the standard deviation the more ... | |
what is a position trader | a position trader buys an investment for the long term in the expectation that it will appreciate in value this type of trader is less concerned with short term fluctuations in price and the news of the day unless they alter the trader s long term view of the position position traders might be seen as the opposite of d... | |
what is positive correlation | a positive correlation is a relationship between two variables that move in tandem that is in the same direction a positive correlation exists when one variable decreases as the other variable decreases or one variable increases while the other increases because these two different variables move in the same direction ... | |
when statistically analyzing positive correlation it is important to understand the dataset s p value p value is the statistical measurement of how statistically significant the findings are in general a higher p value indicates there is greater evidence that two data points are more strongly correlated 6 | positive correlation in financea simple example of positive correlation involves the use of an interest bearing savings account with a set interest rate the more money that is added to the account whether through new deposits or earned interest the more interest that can be accrued similarly a rise in the interest rate... | |
what is an example of positive correlation | one example of positive correlation is the relationship between employment and inflation high levels of employment require employers to offer higher salaries in order to attract new workers and higher prices for their products in order to fund those higher salaries conversely periods of high unemployment experience fal... | |
how do you determine a positive correlation | the most common way to determine a positive correlation is to calculate the correlation coefficient this statistical measurement calculates the strength of the relationship between two variables 12 | |
what does a correlation of 1 0 mean | a correlation coefficient of 1 0 means that two variables have perfectly positive correlation as one variable changes so does the other though this does not mean that one variable directly impacts the outcome or changes to the other both variables always move in tandem and are most likely highly related 3 | |
how do you know if a correlation is strong or weak | the correlation between two variables can be evaluated by determining the dataset s correlation coefficient and p value both measurements analyzed together demonstrate the strength of the relationship between the variables and the reliability of the data 6 | |
does correlation imply causation | correlation does not require causation and it is a common logical fallacy to believe otherwise when two variables are positively correlated that does not necessarily mean that one variable causes changes in the other both variables may be influenced by an unknown third factor or the apparent relationship between the va... | |
what is positive economics | positive economics refers to objective analysis in the study of economics most economists look at what has happened and what is currently happening in a given economy to form a basis for future predictions this process is known as positive economics positive economics is different from normative economics which is a fo... | |
is easily verifiable because it is based on objective data | gives policymakers more power to make decisionsallows individuals to make wiser choices with their economic and financial liveswe can t always separate our emotions from the factseconomics isn t an exact science so there are no fool proof solutions or conclusionspolicies and solutions that arise from positive economics... |
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