The Truth About Bankrupt Stock Auction

Mar 31st, 2014 | By | Category: Debt

Are you bored with the 9 to 5 job? Want something in your life to change instantly? Want your dreams come true. Your dream of relaxing in a big house, and there’s a flow of money in the form of dividend cheque. Imagine yourself an owner of a business and watch your company grow.

Are you to do with a reputable company? How long has the auction house been trading? Check whether it has its own sale room or head office where you could ask for a refund.

Talking About Bankrupt Stock Auction..

In today’s fast moving world, stocks which was still the ball game of the rich and wealthy people, with the trading technologies expanding itself, the market has opened its doors to each and all who would like to own stock.

If you wish to multiply your money and want build wealth then owning stock is the thing for you.But before you take the plunge in this deep sea of stock market, its vital and important for you understand about the stocks and the way they trade. Most people have heard about stocks from friends or often have overheard a conversation, like ‘oh Mr. Shah, did wonders on the stock market and now is starting a new firm ‘or’ Mr. Patel lost…XYZ amount in the stock market. Though being a very popular topic of discussion in the majority of the places, there’s a lot of misconception about it. Everything in life isn’t free so even this money building financial tool also has risk factors in it.

New Century, a subprime lender that was once the second-largest in the industry, has filed for bankruptcy. The company is joining the ranks of many other subprime lenders to crash and burn in the housing market downturn. But as the housing market has slowed, and regulations have tightened, that support has quickly dried up. But in the mid-1990s, there was an explosion in mortgage-backed securities. Mortgages could now be repackaged as bond debt and sold to investors. Companies like Countrywide could …

To run a company or a business, you need funds. This capital can either be generated from within or one needs to be borrowed from outside. Borrowing the money can still be a very expensive option, what companies do is give a unit of ownership interest in a partnership or a financial asset. This is called a SHARE and the person possessing the share is called SHARE HOLDER.

It doesn’t mean that if a person is SHAREHOLDER he/she gets to make decisions in the day to day activities of the business. They get the equal share in the profits of the business in the form of dividends.

STOCK signifies the ownership on the company’s assets and earnings. So in totality SHARES and STOCKS in today’s financial market mean the same thing.

Normally a layman would buy certain shares and keep it just to earn dividends, where as few investors who wish to deal in the stock trading would buy and sell them. The prices of the shares keep on rising and falling, so you should d be willing to lose your investment anytime.

So what is most important before entering into the big well of stock market is to inform yourself properly and learn in which shares to invest which can give you big returns.

COMMON STOCK: A common stock also known as Voting share or an Ordinary share gives the right to the shareholder to vote on the corporate matters.policy and to elect the Board Members. Mostly the companies issue Common stocks. The dividend paid on these stocks isn’t fixed and would vary. The return on the Common stocks is much higher than in any other investment. However, this return are with cost as common stock involves maximum risks. If the company goes bankrupt or chooses to close down Common stock holders are only paid after the preferred shareholders, bondholders and the creditors are paid. The biggest benefit of a common stock is its can be converted in cash, that is can be liquidities very fast.

PREFERED STOCK: A Preferred stock is also referred to as known as Preference share or Preferred share, is a higher ranking stock then the Common stock, and its terms are negotiated between the company and the investor. Preferred stock generally doesn’t carry a voting rights but it does carry priority over the Common stock in payment of dividend and upon liquidation. A Preferred stock holder has option to convert his stock to common stock after predetermined dates. These are called CONVERTIBLE PREFERRED SHARES.

Stock prices are directly linked to the company’s earnings, but what exactly makes this prices move? There are no hard and fast rules to this. The news report of a specific company would make the investors have more stocks of it or the negative news can make the investors move out of those companies’ holdings by selling them.

The day traders are also discussed the major contributor for the ups and downs of the stocks, as they generally deal in huge numbers of stock which adversely affect the stock.

If the company’s are able to demonstrate that they have met or exceeded their profit margin, the stocks of the company will automatically go up, but if vice a versa.. If company falls short in meeting the profit margin the immediate reaction of the investors would be to sell the stock holdings of that company.

One company that is advertising heavily on Facebook at present is WLC Auctions. Wayne Cooper, the head of the firm, said around 60pc of its lots were bankrupt stock, while the others were from other companies, such as pawnbrokers and memorabilia dealers.

Where these names do came from? Remember bears are sluggish and bulls are forceful. The bull flairs its thorns up when tries to attack its prey and the bear swipes downs, this is metaphorically depicted in the stock market. When the market has trend is upwards it’s said to be a Bull market and Bear market when the trend hits the downward graph.

A bull market trend is associated with increasing trust of the investors, and anticipation of the future rise in the prices which would move the investors to purchase the stocks. India’s Mumbai Stock Exchange Index, SUNSEX, was in the Bull Run for about five years fro2003 to 2008.

A Bear market is a steady drop in the stock market over a period of time. It is accompanied by pessimistic approach made by the investors anticipating future down fall in the prices and hence starts selling the shares. No specific definition is available for the Bear market. But one generally accepted measure is a price decline of 15% over a two month period of time.

A stock market is a public for trading of the company stock at an agreed price. It is considered the fast way to obtain the money from an individual and give it to the company that needs it.

The concept of stock trading comes from way back in 1600, when the East India Company was launched, it needed money from the people for their voyages, without any guarantee of return.hence they approached the investors to whom they gave shares in return of the cash.

The idea was that the risk would be shared and distributed among the investors, no fixed returns would be given to them but if company progressed and did well then the investors will be benefited. The idea worked and the investors made profits and by the end of seventeenth century many more were entering the ball game of trade.

In 1801 the LSE (LONDON STOCK EXCHANGE) was formulated, the systems were formulated and then there was no looking back after that. LSE also runs AIM (Alternative investment Market) for the young companies as ‘starter market ‘

Today, along with Britain, LSE runs the biggest exchange with 1800 + companies. This is called the ‘main market’.

NYSE is first exchange of its kind and trades in the open outcry system. Each stock is traded by a specialist (who is the employee of NYSE) on a specific space on the trading floor. This specialist actually works as auctioneer between buyer and the vendor in particular stock. This type of trading makes NYSE different from other exchanges which are entirely dependent on electronic devices.

Today with changing times half of NYSE is also trading on electronic devices, and is get out of the Stone Age.

The NASDAQ (NATIONAL ASSOCIATION of SECURITIES DEALERS AUTOMATED QUOTATION) is the other type of exchange and the largest electronic screen based trading market of United States of America. The exchange doesn’t have central locations of specialist, neither do they floor trading. The entire trading is done through computers and telecommunications.

The third largest exchange of America is the AMEX (AMERICAN STOCK EXCHANGE). This has been taken over by NASD (parent company of NASDAQ) in 1998.

There are many other stock exchanges around the world. Almost all countries have stock exchanges, with Americas stock exchange being undoubtedly be the largest.

A stock market index is a way of measuring a portion of stock market. Statistical indicator used in measuring and reporting variations in the market value of group of stocks. Which will help the investors to make best investment by measuring the performance of a one company on the basis of performance of other companies under the same type of business.

GLOBAL market index includes all types of companies regardless of where they’re domiciled or traded. The 2 best examples of such index are MSCI WORLD and S&P GLOBAL 100.

CAPITALIZED WEIGHTED INDEX also known as market value weighted index, whose components are weighted according to the total market value of their outstanding shares. The impact of the component’s price change is proportionate to the issues overall market value.

In ancient days buying and selling stocks /shares was the privilege of the rich, who, with the assistance of certain share brokers use to buy and sell shares and among those few, the ones who had the inside information of the companies use to mint most money.

But the today’s internet age, the entire information is available to the common man, making him pretty much the part of this never ending market. As now much of the information is available on the internet, the stock brokers give their services with no frills attached, meaning you tell them which shares you want to purchase or sell and they would do precisely the same, no advice given.

There are big stocks brokers like Barclays, Brennan etc who charge for the service their certain amount of commission for each deal, and likewise few brokers charge you yearly and quarterly fee just to keep your account open and do the dealing on your behalf.

Investors buy shares only to the effects of income in forms of dividend. Then they should scrutinize properly and buy such shares that yield the most dividends.

Some investors aren’t interested in income but are more inclined towards capital growth, hence when the share price increases in anticipation that the company will yield more profits in future and which will affect the growth in the dividend payments … hence investors who’re interested in capital growth, should invest in share that are supposed to yield huge dividends in future.

Each individual who is the stock market and is intending to make money has to identify himself from the various trader types he falls into and has to utilize that strategy.

Most investors fall under this category, as they buy stocks and hold them for months and years expecting to get more profits out of it. Institutional investors, mutual funds and investment banks are interested in such stocks which yield profits in long term. They concentrate more on the financial power of the company and not in technicalities.

These are the traders who look around for the fast movement in the market. Fast buying and merchandising, and in this short term of holding shares these types of traders make lots of wins and losses.They have the fast profit making mentality, they have high risk to reward ratio.

The stock market moves up and down every day and these types of traders make the most and capture the big part of the move. He doesn’t believe in keeping the stocks for more period of time like position and swing traders. He uses the stock market as source of income and not investment.

IF you’re kind of optimistic investor, then this strategy is good for you. Here the investor foresees the growth of the company’s earnings and invests in it. This type of strategy is deemed to the best for beginners in the stock market.

Benjamin Graham and David Dodd both professors at Columbia Business School, and professors too many big investors, are known as FATHER of this strategy.

In this strategy, the investors tend to buy stocks whose price has recently fallen and are available at cheap prices. But you have to be careful, value investing doesn’t mean ‘JUNK’.Investors has to carry out their homework on the companies, and distinguish between the value company and the companies with declining prices. The company should have its fundamentals healthy to prove its worth.

In this strategy the investors, buys stocks which pay dividends regularly to them on quarterly or yearly basis… The choice of companies in this strategy should be sound and healthy. This strategy can only be the sexist strategy, however, in the long run, this time tested investment strategy would definitely yield returns.

If you want to build your wealth, keep your wealth and grow your wealth you is expected to have a solid Stock Trading Plan.A stock trading plan is a fixed set of rules and actions which formulate your trading strategy. Every trade you do should be guided by your trading plan.

Once you have taken a plan, mock run of the plan in the stock market which will enable you to know if your plan is effective or it needs amendments.

If you have opened an account with your broker then you have to get them money stating which and how many shares you wish to buy. They would charge you certain brokerage fees for their services. Also few of them charge trading fee, if there’s no activity for a certain period of time as inactivity fee.

You can always think and get back again. If the quote is acceptable to you u confirms it and in return you’ll get an email confirmation by the broker and the deal is done.

It is very important that you do proper research on the stock because the stock markets behave in weird ways and you should have proper knowledge to it. Never buy the stocks at random, as the market isn’t random and it works on lots of principles and attributes. If you want to be successful in the stock market you’ve got to do proper research. Either you do the research on your own or you can hire someone to call it for you.

Fundamentals about the company. How is the company doing, is it a profit making company and a sound company.

What is the price history of the stocks of that company, I.e. how much are the investors paying for the stocks.

Price target, too, is a vital factor; you have to find out how much the investors would be paid for the stocks in future.

So, to sum up we can state that it’s important that as an investor you should have understanding of wider markets trends, knowledge of individual sectors. Also you should be able to analyse the financial records. You shouldn’t be able to gain access to rumors and upcoming deals. Last but the most important is No emotional bias, generally this last point is overlooked.

Go through the TV SHOWS and the newspapers, they have all the particulars of the shares which are doing well.

Full service brokers also help to perform the research, they hire the stock analysts and they in turn find out which would represent the ideal stocks purchase for the client. They charge a specific fee for their services.

Interviews of the owners, CEO ‘S, directors etc also are helpful as they usually give the correct outline of their company.

In today’s world the internet technology has taken the things easier for the investors to the research on their fingertips, they can research on trading charts and platforms. Some of these charts are available for free and some have costs attached to it.

It is of very important that you get all relevant and correct information on time in such a way as to grow in the market and make maximum profits. You should be mindful of that in the stock trading wrong and unreliable information is very dangerous.

Most of the people track their stock trades in the business parts of the newspaper or on the internet. The information provided on the stock table is the more current data available.

Column 1 and 2 are the 52 WEEK High and Low – This is the highest and the lower price paid for the single stock over the past 52 weeks I.e. one year.

Column 3 is the Companies name and the Type of stock – This column lists the name of the company. If there are no special letters or numbers following the name it is deemed to be a common stock, but For example ‘pf’ is return then it means the preferred stock, different symbols imply different types of stocks.

Column 4 is the Ticker Symbol (SYM) – This is the unique alphabetic name which identifies the stock made by the firm. If you’re looking for the stocks quotes online you should look for the company by the Ticker Symbol.

Column 5 is the Dividend per Share – This indicated the annual dividend paid for each share. However, if the space is blank then the company isn’t paying any dividends.

Column 6 is the Dividend Yield –This is the percentage return on the dividend. Some companies don’t pay dividends regularly; the Board of Directors decides how much to pay on quarterly basis calculated on annual dividend of the share divided by the price per share.

Column 7 is the Price/ Earnings Ratio –Mostly commonly known as P/E, this is calculated the current stocks prices by earnings per share from the last 4 quarters. The higher the P/E, the more investors are paying for the company’s potential.

Column 11 is the Close – The close is the last trading price recorded at the end of the day, I.e. at market close.

Column is 12 is the Net Change – This is the dollar value change in the stock price then the last day’s closing price. If the + (positive) sign indicates rise and a-(negative) sign indicates a drop in the price.

We have already discussed this before, but just to refresh it further, in ancient days dealing in trade market was just the privilege of the rich people, but now it isn’t so a common man, too, is a part of the trade market.

Stock broking through bank, custom stock brokers over the telephone or on line trading through internet.

But, if you wish to deliver the entire thing to somebody else, then in that case you can go for DISCREATIONARY SERVICE, in this there is certain strategy between you and the broker which is agreed upon and the stock broker takes all the decisions of buying and selling on your behalf with your money. This type of service risk factor is more.

Discount brokers-these brokers will collect a certain amount of annual fee form you and will only carry out what has already been told to them, over the phone, in person either on the internet. They would give ZERO advice to you.

You should first decide whether you want a telephoning broker or he should serve as an online broker as well. Then next you should find the following factors.

STICK TO THE RULES-Always remember that the stock prices would go up and down, what is required is to stick to your strategy which you have planned. Swaying away from the rules would only bring losses.

DIVERSIFY – Do not invest all your eggs in one basket; invest in various sectors not just the one which is mining.

BUY SHARES THAT SUIT YOUR TRADING CYCLES – if you’re buying shares for a long term it definitely wont suit you if you’re short term trader and it goes other way also… Short term shares wont suit the long term trader as well.

KNOW YOUR RISK TOLERNACE – A speculative share has a different risk profile as to out of favor’ blue chip’.Allocate your capital according to your own risk tolerance and the risk profile of the trade.

DON’T RUSH IN – The market will be still there waiting for you when you’re ready to trade. Learn about the market before you start trading particularly the new investors. The best way to start is with the PAPER TRADE, so as to acquire the basics first.

DO NOT GET GREEDY – Don’t think that you’ll be a millionaire in a day, be practical and not over realistic. Don’t think it is very easy, as it is very easy to lose money also in the trade market.

ONKY INVEST WHAT YOU CAN AFFORD TO LOSE – if the shares are at the root of your worries then definitely either you have invested in the wrong ones, or you have far too much to handle, so SELL them, zero in the world d is more important than your peace of mind.

NEVER EVER CHASE SHARES – exercise patience, never run behind the shares and purchase beyond your limits, because the time will definitely come when you’ll be able to buy them within your limits.

KEEP ACCURATE UP TO DATE RECORDS-The most important of all, for penalties for not declaring your profits and not paying the capital gains are too much high. So stick to the rules.

If you want your money to grow, wealth to multiply then the first thing you need is a full proof and solid strategy plan. If your plan isn’t good then you would just end up fixing your errors.

Investment in shares isn’t a onetime game. You should keep on investing if you wish to yield good profits.

Frequent trading would definitely add up to costs. Certain fees are always there which you require to pay, but don’t indulge yourself into counterproductive things. These ultimately would make you use up your profits too. Best is to adhere to the basic low cost transactions.

Try to buy at a certain amount and a certain period of time, which will provide you advantaged of best prices. Hence if you wish to invest to don’t invest at a time, do it over a time frame of days, weeks or months.

It’s the most important and vital thing to diversify as it would help to reduce the risk. All the types of investment, goes thought the cycle of setbacks ups and downs… Hence you should diversify to earn profits in long term.

Before you decide to invest choose the right industry and in that choose the correct company. It would take a bit of time but, do your homework properly before investing because it’s finally your hard earned money you wish to invest for betterment.

The most basic thing of investment is, you got to keep emotions aside what it needs is cool, calm and balanced mind.

For the first time investors it is difficult to determine where to invest his money.which option to choose and when all the information appears to be confusing. In that the most common question asked is what the difference between STOCKS and SHARES is.

STOCKS mean ownership of certificates in multiple companies. You may not be only the stockholder but also the shareholder for each particular company as well.

SHARES mean ownership of certificates in a certain company. It makes the person the shareholder of that company.

The common misconception about stocks and shares is that they’re different things. In reality they’re the same thing but are referred to differently when talking about more than one company.

STOCK means ownership of certificates in multiple companies. The price to the stocks will actually depend upon the performance of the company. If company is doing well you’ll share the appreciation, but if the company has gone in loss, then u will equally be sharing the loss.

BONDS are ‘credit ‘given by the investor to the company. It’s a kind of loan given to the company to carry on their activities. The percentage the investor gets is fixed.

The shareholder would stick to the shares even in bad times and would expect that the company would do better in future. However, the bondholder is just concerned with his initial amount and the interest from the company.

It is possible that investor has invested in a little and a risky company and if the company shuts down then the bond holder has to lose his initial investment as well. However, this happens in a rear case.

Well. It depends on the person personal decisions and what is his risk tolerance. Though the ideal long term portfolio could be a blend of little bit of both.

It is always been a difficult and a confusing decision as to which stocks to buy. The financial analysts heavily depend to the Fundamental analysis at that time.

Technical analysis forecasts the future directions of the prices, through past data and market trend. It ‘ignores’ the actual financial status of the company, market currency, it just solely goes by the ‘charts ‘that is the price and volume information only. It is just not limited to charting but it also considers price trends.

Technical analysts believe that the investors collectively repeat the behaviors of the investors who preceded them. While it will take long time for the technical analyst to be picked as the one to manage your trade, but certain financial institutions and banks are using them as tools.

Stock market is a creature in and of itself. When will the bull market is going to change to bear market is anyone’s guess. Hence, we should hold the shares which are stable and are moving up. When you see the company’s shares you have taken are dropping, dipping continuously, then I guess it is time to leave the ship from those share, meaning it would be a good idea to sell those shares which are falling in price.

If they’re fewer the better it is good to be diversified, but you should hold that many share that you can manage, and handle on your own. What is the point of holding 1000 shares and If you cannot know them all … instead it is better to have 25-30 which are manageable.

Most of the brokers provide you with this facility where they give you an empty Isa wrapper. You have to fill it pound 7000 worth of shares and then trade tax free. All capital gains you make will be tax free.

There is no set accepted definition for the Penny Stock. Some define it as stock priced under 1$and some say 5$. They are actually type of stock that generally trades at very low value and market capitalization. They are highly speculative and have high risk due to the absence of liquidity. They are generally traded over the counter (OTC) and on pink sheets.

A risky technique where in you’re buying stocks with borrowed money from the broker. You can term it as a loan from the broker to purchase the stocks. In this it allows the investor to be paid the fractional amount and the other in borrowed from the broker. The broker sets a margin account with you and also charges you with brokerage on the loan and you’ve got to pay interest as well. They can also hold the shares as collateral against the loan you’ve taken and can take the stocks, if you become a defaulter.


Comments are closed.