Presentation on theme: "Papa John’s Pizza In 1984, "Papa" John Schnatter knocked out a broom closet located in the back of his father's tavern (Mick's Lounge), sold his prized."— Presentation transcript:
Papa John’s Pizza In 1984, "Papa" John Schnatter knocked out a broom closet located in the back of his father's tavern (Mick's Lounge), sold his prized 1972 Z28 Camaro in order to purchase $1,600 worth of used restaurant equipment, and began selling his pizzas to the tavern's customers.
Investment Bankers Long term financial planning Marketing of security issues Arrangement of private loans Negotiation of mergers
Rights of Shareholders Receive a stock certificate Share in profits Voice in management (vote for Board Dir) Receive financial information Sell stock at anytime
Common vs. Preferred Stock Preferred has preference in claims to assets and dividends – must be paid before common. Preferred dividends – fixed Common dividends – fluctuate Preferred usually have no voting rights
Initial Public Offering (IPO) First time company offers stock to the public for cash. Can only have one. Also known as going public
Once hot, now not Share prices for these former highflyers have cooled from their IPO price. Company IPO date IPO price First Trade Current Price Change from IPO price Va Software (LNUX) 12/99 $30 $320 $1-97% TheGlobe (TGLO.OB) 11/98 $9 $90 1 cent -99% Foundry Networks (FDRY) 9/99 $25 $114 $15 -40% Microsoft 3/86 $.08 $.11 $18 22,500% Google (GOOG)8/04 $85 $101 $340 300% Yahoo (YHOO)4/96 $.50 $1.20 $12 2,300%
Prospectus Character of the business Bios on the officers Financial Statements Reasons for raising funds
SEC – Securities and Exchange Commission Government agency charged with enforcement of the nation’s securities laws and regulations. Police of the investment community Monitor insider trading Prevent fraud
Types of orders Market order – buy or sell ASAP at the going or market price. Limit order – buy or sell at a specific price and time limit. Good till canceled Good till canceled Good for the day Good for the day
Dow Jones Industrial Average Developed by Charles Dow in late 1800’s 30 stocks No longer a pure average due mainly to stock splits
Dow Jones Industrial Stocks 3M CO ALCOA INC ALTRIA GROUP INC AMER INTL GROUP AMERICAN EXPRESS BOEING CO CATERPILLAR INC CITIGROUP INC COCA-COLA CO DISNEY (WALT) CO DU PONT (EI) EXXON MOBIL CORP GENERAL ELECTRIC GENERAL MOTORS HEWLETT-PACKARD HOME DEPOT INC HONEYWELL INTL IBM INTEL CORP JOHNSON&JOHNSON JPMORGAN CHASE MCDONALDS CORP MERCK & CO MICROSOFT CORP PFIZER INC PROCTER & GAMBLE SBC COMMUNICATIO UNITED TECH CORP VERIZON COMMUNIC WAL-MART STORES
Berkshire Hathaway Berkshire Hathaway Is it expensive? Should it split the stock? Berkshire Hathaway
Warren Buffett’s view on splits Buffett believes that splitting the stock will attract shareholders who are more focused on the stock price than the business results at Berkshire. These types of shareholders, according to Buffett, tend to make emotional or irrational decisions about buying/selling the stock; hence leading to wild fluctuations in the stock price producing what Buffett refers to as “manic-depressive valuations.”
Blue chip Growth Stocks High P/E ratio High P/E ratio Pay little or no dividend – reinvest their profits Pay little or no dividend – reinvest their profits Income stocks Low P/E ratio Low P/E ratio Pay dividends regularly Pay dividends regularly Cyclical stocks Highly dependent on the economy Highly dependent on the economy Airlines and hotels are typical examples Airlines and hotels are typical examples Stock Classifications
Company Sizes Large-Cap Mid-Cap Small-Cap Cap = Market Capitalization = stock price X # shares outstanding Which is generally the safest investment? Which generally has the greatest growth potential? Which company has the largest market cap? largest market caplargest market cap
Making money with stocks Capital gain – the profit made on the sale of the stock. Dividends – portion of the company’s profit paid out to its shareholders. Dividend yield = dividend/stock price or expected dividend over next year/stock price
Stock Brokers A broker, originally, was a wine seller who “broke open” wine casks.
Roth IRA – Individual Ret. Acct. $5,000/yr contributions Distributions are not taxable Contributions can be made as long as you live
401k Plans A 401(k) is a type of retirement plan that allows employees to save and invest for their own retirement. Through a 401(k), you can authorize your employer to deduct a certain amount of money from your paycheck before taxes are calculated, and invest it in the 401(k) plan.
Why a 401k is a good idea See Fidelity’s website website
What affects your credit score? Your payment performance history (35%) Your current level of indebtedness (30%) The age of your credit history (15%) Your pursuit of new credit (10%) The type of accounts in your credit report (10%)
FICO score and mortgage payment 760 - 8505.93%$1,285 700 - 7596.15%$1,316 680 - 6996.33%$1,341 660 - 6796.54%$1,371 640 - 6596.97%$1,433 620 - 6397.52%$1,513 $216,000 mortgage for 30 years
Free Credit Report You are allowed to check your credit once a year for free. Your credit score (FICO) is available for a small fee. Go to www.annualcreditreport.com www.annualcreditreport.com