Technical Analysis

Technical Analysis is when someone uses a set of tools to build charts that look like large institutional investors. Why? They think that it helps figuring out the psychology behind other investors.

So technical = psychology based. Kinda weird hh?

It uses stuff like trading volumn, japanese charts, some logs, so I guess it's the math behind all of this charting that makes it "technical". Critic says this is not all that predictive of stock prices.

Here are some important glossary for stocks:

Book value - asset of the company. How much it can be sold for. Sometimes referred to book value of 1 share.

Return of appreciation - how much the stock increased in value.

Dividend Yield -

If qt div = 25%, stock price is 10 bucks.

Dividend Yield =

Ann. Div. P rice

=

$0.25* 4 $ 10

= 0.10 = 10%

Earning per share - total earning/total shares.

Market Capitalization - total shares outstanding * price per share

P/E: the ratio of Price/EPS (for the year). It tells you how $$ the share is. Usually under 20 is pretty good.

Real Estate Investment Trust - You get to own a share of the real estate. Usually companies that investment in real estate have a pretty good dividend yield.

Relative Strength - performance of stock over performance of the market. Investor's business daily uses a pt system of 1-99. 95 means it performs better than 95% of the stocks out there.