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Chapter 2 Sources of Investment Information CHAPTER 2 OUTLINE 2.1 Ways of Wall Street 2.2 Internet Revolution 2.3 Investment Information on the Internet 2.4 Financial Press 2.5 Wall Street Research 2.6 Investments as a Profession Chartist/Technician Head and Shoulders Stock Quotes

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chapter 2

Chapter 2

Sources of Investment Information

chapter 2 outline

2.1 Ways of Wall Street

2.2 Internet Revolution

2.3 Investment Information on the Internet

2.4 Financial Press

2.5 Wall Street Research

2.6 Investments as a Profession

key terms

Head and Shoulders

Stock Quotes

Real Time


Ticker Symbol

10Q Report

10K Report

Proxy Statements

SEC Form 144

Stock Message Board


Stock Broker

Security Analyst

Portfolio Managers

Certified Investment Planner

Investment Banker

ways of wall street
Ways of Wall Street
  • Caveat Emptor (Let the Buyer Beware)
  • “Where Are the Customers’ Yachts?”
  • Neither the Advice nor the Wisdom on Wall Street is free
what did they say wall street internet jargon
WHAT DID THEY SAY?? Wall Street & Internet Jargon
  • Trader Terms
  • Internet Terms
  • Technician’s Terms
  • Financial and Investing Glossaries on the Internet:
    • <>
    • <>
technicians or chartists
  • Pick stocks based on patterns of past price and volume data--e.g., “head and shoulders” formation--bearish indicator
    • Head and Shoulders: Chart formation resembling the head and shoulders outline of a person.
  • Technical trends can move markets in short term, but fundamentals count in longer term
  • Tend to look at day-to-day stock movements, often with 20/20 hindsight
internet revolution
Widespread dissemination of information

Two-way communication

Cheaper and more timely than print sources

Makes financial markets more democratic

Reduces information-gathering costs

Can be fertile space for stock price manipulation and fraud

Internet Revolution
the internet so powerful it brings down walls
THE INTERNETSo Powerful, It Brings Down Walls

With a click of the mouse:

  • consumer news
  • attitudes
  • impressions
  • ideas
  • variety of new products and services

Enemy of despots and dictators

e commerce and the internet
Tool for Consumers

Tool for Companies

E-commerce and the Internet

Ready information is enemy of high prices and high profit margins as consumers shop via the ‘net

  • Reduce prices
  • Get closer to customers
  • Find out how to meet and exceed customer needs
financial information on the internet


Financial Informationon the Internet
  • Stock Quotes in Real Time
  • Volume Information
  • Financial Data on:
    • Companies
    • Industries
    • U.S. Economy
    • World events
  • Quotes
  • Charts
  • News
  • SEC Filings
  • Stock Research Reports
  • Earnings Estimates
  • Fundamentals
who is edgar


  • Electronic retrieval analysis for SEC filings
  • Free website for gov. reports filed by individual companies
  • For-profit company that supplies investors with SEC reports and filings
  • Ticker symbol: unique 2,3,or 4 letter code for company
sec requires
10Q: Quarterly Accounting Information

10K: Annual Accounting Information

13D: 5% Ownership Positions

Form 144: Intention to Sell Restricted Stock

Proxy statement or annual meeting announcement

Members of top management

Board of directors

Large investors

Stock ownership positions by managers

Pay-for-performance incentives

real time quotes


  • Fast-moving markets
  • Up-to-the-minute quotes and news
  • Free quote information
mutual fund information


  • Morningstar—watchdog group for mutual fund industry
  • Comprehensive, timely information and analysis
  • Information on sector funds
stock message boards
  • Websites for anonymous individuals to post information about companies or investments
  • Timely information about what other investors are thinking
  • Can be manipulated via misinformation, rumor, and gossip


financial press
Financial Newspapers:

The Wall Street Journal (print & interactive versions)

Investor’s Business Daily

New York Times

San Francisco Chronicle

USA Today

Financial Periodicals:

Barron’s,Business Week






wall street research analyst opinion summaries
WALL STREET RESEARCHAnalyst Opinion Summaries
  • Wall Street trading firms’ opinions
  • Detailed information about:
    • Companies
    • Industries
    • Overall Economy
    • Global Stock and Bond Markets
  • Buy/sell recommendations
    • Bullish Consensus
    • Bearish Sentiment
wall street research company reports
  • Company Reports
  • Industry Reports
  • U.S. Market Outlook
  • Global Outlooks
investments as a profession financial job market overview
Investments As a ProfessionFinancial Job Market Overview
  • Employment opportunities in financial services expected to grow rapidly
  • Amount of financial sophistication demanded of finance specialists and nonspecialists expected to rise
    • Corporate Treasurers/CFOs
    • Personnel/Human Resources
  • Boundaries between investment and financial instruments continue to blur--> more account executives in
    • Commercial banks
    • savings institutions
    • insurance carriers
    • real estate companies
career opportunities stock brokers investment managers
CAREER OPPORTUNITIESStock Brokers & Investment Managers
  • Stock Brokerage: financial agents who act as go-betweens for individual buyers and sellers
  • Investment Management
    • Security Analysts: specialists who identify investment opportunities for individuals
    • Portfolio Managers: manage investments for individuals and institutions
career opportunities financial planners
  • Help individuals identify and meet financial goals
  • Certified Financial Planners: must pass challenging exams from College of Financial Planning--equivalent to CPA
    • financial plan processing and insurance
    • investment planning
    • income tax planning
    • retirement planning/employee benefits
    • estate planning
career opportunities investment banking
  • Help corporate clients meet financial needs, such as issuing stocks or bonds
  • Arrange to sell new securities to general public
  • Arrange mergers and acquisitions
review quiz
Review Quiz

T or F

Technical analysts generally consider a head and shoulders formation to be a very bullish indication.

T or F

EDGAR is a nonprofit company that specializes in providing investor access to SEC reports and filings.

T or F

SEC Form 144 filings must only be submitted by holders of restricted securities, sometimes called letter stock, after they have sold such shares to the general public.

review quiz24
Review Quiz

T or F

A bearish consensus means that Wall Street analysts expect a stock price to go down.

T or F

An initial 13D filing would typically be regarded as bearish.

T or F

Stock trading on the Internet is likely to reduce stock-market volatility.