My B'day Special 8th Dec. [Thoughts of great people]

HITLER : "If you win you need not explain. But if you lose you should not be there to explain"

BONNIE BLAIR : "Winning does'nt always mean being first.Winning means you are doing better than you have done before"

CHARLES : "Never break four things in your life-Trust, Promise, Relation and Heart. Because when they break they dont make noise but pains a lot"

LEO TOLSTOY : "Everyone thinks of changing the world, but no one thinks of changing himself"

MOTHER TERESA : "If you start judging people, you will be having no time to love them."
"If we cannot love the person whom we see, then how come we love god whom we cannot see"

SWAMI VIVEKANANDHA : "In a day when you dont come accross any problems, you can be sure that you are travelling in a wrong path"
Charles Beaudelaire: There is a certain cowardice, a certain weakness, rather, among respectable folk. Only brigands are convinced -- of what? That they must succeed. And so they do succeed.

C.W. Wendte: Success in life is a matter not so much of talent or opportunity as of concentration and perseverance.
M. Gandhi: First they ignore you, then they ridicule you, then they fight you, then you win.

William Shakespeare:
1.“Listen to many, speak to a few.”
2.“The love of heaven makes one heavenly.”
3.“When words are scarce they are seldom spent in vain”
4.“Pleasure and action make the hours seem short.”
5.Give thy thoughts no tongue.”

Albert Einstein: Try not to become a man of success but rather try to become a man of value.

Albert Schweitzer: Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.

Alex Noble: If I have been of service, if I have glimpsed more of the nature and essence of ultimate good, if I am inspired to reach wider horizons of thought and action, if I am at peace with myself, it has been a successful day.

Anna Pavlova: To follow without halt, one aim; there is the secret of success. And success? What is it? I do not find it in the applause of the theater; it lies rather in the satisfaction of accomplishment.

Arie de Gues: Your ability to learn faster than your competition is your only sustainable competitive advantage.

“ Make them Feel that they have missed you, Make your Life in such a way that every one need’s to be With You – Saleem “

50 Inspirational Positive Quotes That Make You Think

By Shiv Gagal

I’ve always have this penchant for inspirational positive quotes. It’s amazing what those mere strings of words can do. Seemingly simple. Yet interestingly profound.

If you’ve some time today, I invite you to join me in this self discovery journey as we go through this 50 wonderful inspirational positive quotes.

Indulge in the tranquil moment as you read with both your eyes and heart.

Remember, eyes may provide sight. But it’s the heart which gives insight.

Enjoy.

“Think like a man of action, and act like a man of thought.”
- Henri L. Bergson

“I am only one, but still I am one. I cannot do everything, but still I can do something. And because I cannot do everything I will not refuse to do the something that I can do.”
– Hellen Keller

“Half of the troubles of this life can be traced to saying yes too quickly and not saying no soon enough.”
- Josh Billings

“Even if you’re on the right track, you’ll get run over if you just sit there”
- Will Rogers

“Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I may end by really becoming incapable of doing it. On the contrary, if I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.”
- Mahatma Gandhi

“You can never cross the ocean unless you have the courage to lose sight of the shore.”
- Christopher Columbus

“To a brave man, good and bad luck are like his left and right hand. He uses both.”
- St Catherine of Siena

“When one door of happiness closes, another opens, but often we took so long at the closed door that we do not see the one that has been opened up for us”
- Helen Keller

“We don’t see the things the way they are. We see things the way WE are.”
- Talmund

“Every problem has in it the seeds of its own solution. If you don’t have any problems, you don’t get any seeds.”
- Norman Vincent Peale

“If you change the way you look at things, the things you look at change.”
- Dr Wayne Dyer

“The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem.”
- Theodore Rubin

“Pessimist : A person who says that O is the last letter of ZERO, instead of the first letter in word OPPORTUNITY.”
- Anonymous

“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
- Thomas A Edison

“Blessed are those who can give without remembering and take without forgetting”
- Elizabeth Bibesco

“Yesterday is history, tomorrow is a mystery. And today? Today is a gift. That’s why we call it the present.”
- B. Olatunji

“When you get to the end of the rope, tie a knot and hang on.”
- Franklin D Roosevelt

“Your attitude, not your aptitude, determines your altitude.”
- Zig Ziglar

“If you’re going through hell, keep going.”
- Winston Churchill

“The secret to success is to start from scratch and keep on scratching.”
- Dennis Green

“Champions aren’t made in gyms. Champions are made from something they have deep inside them a desire, a dream, a vision. They have to have the skill and the will. But the will must be stronger than the skill.”
- Muhammad Ali

“Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.”
- Dale Carnegie

“So many of our dreams at first seems impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable.”
- Christopher Reeve

“Hard work spotlights the character of people. Some turn up their sleeves. Some turn up their noses, and some don’t turn up at all.”
- Sam Ewing

“There are those who work all day. Those who dream all day. And those who spend an hour dreaming before setting to work to fulfill those dreams. Go into the third category because there’s virtually no competition.”
- Steven J Ross

“Our greatest glory is not in never falling, but in rising every time we fall.”
- Confucious

“Many of life’s failures are people who had not realized how close they were to success when they gave up.”
- Thomas A Edison

“The main thing is to keep the main thing the main thing.”
- Stephen Covey

“Efficiency is doing things right. Effectiveness is doing the right things.”
- Peter Drucker

“Do you know what happens when you give a procrastinator a good idea? Nothing!”
- Donald Gardner

“Success is what you attract by the person you become.”
- Jim Rohn

“You have to ‘Be’ before you can ‘Do’ and ‘Do’ before you can ‘Have’.
- Zig Ziglar

“You can have everything in life that you want if you will just help enough other people to get what they want.”
- Zig Ziglar

“The test we must set for ourselves is not to march alone but to march in such a way that others wish to join us.”
- Hubert Humphrey

“Lots of people want to ride with you in the limo, but what you want is someone who will take the bus when the limo breaks down.”
- Oprah Winfrey

“Formal education will make you a living. Self education will make you a fortune.”
- Jim Rohn

“It isn’t what the book costs. It’s what it will cost you if you don’t read it.”
- Jim Rohn

“You must be the change you want to see in the world.”
- Mahatma Gandhi

“The future has several names. For the weak, it is the impossible. For the fainthearted, it is the unknown. For the thoughtful and valiant, it is the ideal.”
- Victor Hugo

“There is nothing more genuine than breaking away from the chorus to learn the sound of your own voice.”
- Po Bronson

“Do not go where the path may lead, go instead where there is no path and leave a trail.”
- Waldo Emerson

“Use what talents you possess, the woods will be very silent if no birds sang there except those that sang best.”
- Henry van Dyke

“Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.”
- Bertrand Russell

“History will be kind to me, for I intend to write it.”
- Winston Churchill

“Life isn’t about finding yourself. Life’s about creating yourself.”
- George Bernard Shaw

“Live your life each day as you would climb a mountain. An occasional glance towards the summit keeps the goal in mind, but many beautiful scenes are to be observed from each new vintage point.”
- Harold B Melchart

“The tragedy of life doesn’t lie in not reaching your goal. The tragedy lies in having no goals to reach.”
- Benjamin Mays

“More often in life, we end up regretting the chances in life that we had, but didn’t take them, than those chances that we took and wished we hadn’t.”
- Anonymous

“An excuse is worse and more terrible than a lie, for an excuse is a lie guarded.”
- Pope John Paul I

“Don’t wish it were easier, wish you were better. Don’t wish for fewer problems, wish for more skills. Don’t wish for less challenges, wish for more wisdom.”
- Earl Shoaf

Thought of the Day

I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store;

For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.

I worked for a menial's hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have paid!

-Jessie Rittenhouse

Different Driving Styles

Different Driving Styles

One hand on steering wheel, one hand out of window. – Sydney

One hand on steering wheel, one hand on horn – Japan

One hand on steering wheel, one hand on newspaper, foot solidly on accelerator… – Boston

Both hands on steering wheel, eyes shut, both feet on brake, quivering in terror – New York

Both hands in air, gesturing, both feet on accelerator, head turned to talk to someone in back seat – Italy

One hand on horn, one hand on holding gear, one ear listening to loud music, one ear on cell phone, one foot on accelerator, one foot on clutch, nothing on break, eyes on females in next car, – Welcome to INDIA!

Thoughts

All that is gold does not glitter; not all those that wander are lost. — J.R.R. Tolkien (1892-1973)


It is better to know some of the questions than all of the answers. — James Thurber (1894-1961)

Funny how people despise platitudes, when they are usually the truest thing going. A thing has to be pretty true before it gets to be a platitude. — Katharine Fullerton Gerould (1879-1944)

Integrity needs no rules. — Albert Camus (1913-1960)

The price one pays for pursuing any profession, or calling, is an intimate knowledge of its ugly side. — James Baldwin (1924-1987)


Freedom breeds freedom. Nothing else does. — Anne Roe (1904-1991)






The people who think they are happy should rummage through their dreams. — Edward Dahlberg (1900-1977)






Le sens commun n'est pas si commun. (Common sense is not so common.) — François Marie Arouet de Voltaire (1694-1778)






Men tire themselves in pursuit of rest. — Laurence Sterne (1713-1768)






Perfect order is the forerunner of perfect horror. — Carlos Fuentes (1928- )






Our ignorance of history causes us to slander our own times. — Gustave Flaubert (1821-1880)






Children are God's spies. — Elizabeth Bowen (1899-1973)






One is easily fooled by that which one loves. — Jean Baptiste Poquelin Molière (1622-1673)






Americans are benevolently ignorant about Canada, while Canadians are malevolently well-informed about the United States. — J. Bartlet Brebner (1895-1957)






One of the few men who became great while remaining good. — Karl Marx (1818-1883) on Abraham Lincoln






Education is not the filling of a pail, but the lighting of a fire. — William Butler Yeats (1865-1939)






If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away. — Henry David Thoreau (1817-1862)






Statesmen think they make history; but history makes itself and drags the statesmen along. — Will Rogers (1879-1935)






Education is the ability to listen to almost anything without losing your temper or your self-confidence. — Robert Frost (1874-1963)






The willing contemplation of vice is vice. — Arabic proverb






My friends, there are no friends. — Coco Chanel (1883-1971)






The human heart dares not stay away too long from that which hurt it most. There is a return journey to anguish that few of us are released from making. — Lillian Smith, American writer and social critic (1897-1966)






One should respect public opinion insofar as is necessary to avoid starvation and to keep out of prison, but anything that goes beyond this is voluntary submission to an unnecessary tyranny, and is likely to interfere with happiness in all kinds of ways. — Bertrand Russell (1872-1970)






There are some things one can only achieve by a deliberate leap in the opposite direction. One has to go abroad in order to find the home one has lost. — Franz Kafka (1883-1924)






I know of no method to secure the repeal of bad or obnoxious laws so effective as their stringent execution. — Ulysses S. Grant (1822-1885)






It wasn't until quite late in life that I discovered how easy it is to say "I don't know." — W. Somerset Maugham (1874-1965)






History, n. An account, mostly false, of events, mostly unimportant, which are brought about by rulers, mostly knaves, and soldiers, mostly fools. — Ambrose Bierce (1842-1914?), The Cynic's Word Book






At every single moment of one's life one is what one is going to be no less than what one has been. — Oscar Wilde (1856-1900)






The greatest right any nation can afford its people is the right to be left alone. — Larry Flynt (1942- )






That government is best which governs the least, because its people discipline themselves. — Thomas Jefferson (1743-1826)






A man who does not lose his reason over certain things has none to lose. — Gotthold Ephraim Lessing (1729-1781)





New opinions are always suspected, and usually opposed, without any other reason but because they are not already common. — John Locke (1632-1704)






Only those ideas that are least truly ours can be adequately expressed in words. — Henri Bergson (1859-1941)






It is the characteristic of the most stringent censorships that they give credibility to the opinions they attack. — Voltaire






Seek not the favor of the multitude; it is seldom got by honest and lawful means. But seek the testimony of the few; and number not voices, but weigh them. — Immanuel Kant (1724-1804)






There are two kinds of people in one's life—people whom one keeps waiting—and the people for whom one waits. — Samuel Nathaniel Behrman (1893-1973)






How glorious it is—and also how painful—to be an exception. — Alfred de Musset, French author (1810-1857)






People who bite the hand that feeds them usually lick the boot that kicks them. — Eric Hoffer (1902-1983)






Proust has pointed out that the predisposition to love creates its own objects: Is this not true of fear? — Elizabeth Bowen (1899-1973)






. . . We are such stuff


As dreams are made on, and our little life


Is rounded with a sleep.


— William Shakespeare (1564-1616), The Tempest






Happiness is not a station you arrive at, but a manner of traveling. — Margaret Lee Runbeck (1905-1956)






To oppose something is to maintain it. — Ursula K. Le Guin (1929- )






Neither a lofty degree of intelligence nor imagination nor both together go to the making of genius. Love, love, love—that is the soul of genius. — Attributed to Wolfgang Amadeus Mozart (1756-1791)






Almost any man knows how to earn money, but not one in a million knows how to spend it. — Thoreau






Nothing recedes like success. — Walter Winchell (1897-1972)






Little progress can be made by merely attempting to repress what is evil. Our great hope lies in developing what is good. — Calvin Coolidge (1872-1933)






You can keep the things of bronze and stone and give me one man to remember me just once a year. — Damon Runyan (1884-1946)






When you are right, no one remembers; when you are wrong, no one forgets. — Irish proverb






The only thing we have to fear on this planet is man. — Carl Jung (1875-1961)






If you want to make enemies, try to change something. — Woodrow Wilson (1856-1924)






Our civilization is still in a middle stage, no longer wholly guided by instinct, not yet wholly guided by reason. — Theodore Dreiser (1871-1945)






The world is like a mirror; frown at it, and it frowns at you. Smile, and it smiles, too. — Herbert Samuel (1870-1963)






Fear is a disease that eats away at logic and makes man inhuman. — Marian Anderson (1902-1993)






Curses are like processions. They return to the place from which they came. — Giovanni Ruffini (1807-1881)






People love to talk but hate to listen. — Alice Duer Miller (1874-1942)






A nickname is the heaviest stone that the devil can throw at a man. — William Hazlitt (1778-1830)






Those who give have all things. Those who withhold have nothing. — Hindu proverb






In every real man a child is hidden that wants to play. — Friedrich Nietzsche (1844-1900)






Many people's tombstones should read, "Died at 30. Buried at 60." — Nicholas Murray Butler, American educator (1862-1947)






In much wisdom is much grief; and he that increaseth knowledge increaseth sorrow. — Ecclesiastes 1:18






Knowledge comes, but wisdom lingers. — Alfred, Lord Tennyson (1809-1892)






Happiness isn't something you experience; it's something you remember. — Oscar Levant (1906-1972)






The highest purpose is to have no purpose at all. — John Cage (1912-1992)






If men could foresee the future, they would still behave as they do now. — Russian proverb






News is what a chap who doesn't care much about anything wants to read. And it's only news until he's read it. After that it's dead. — Evelyn Waugh (1903-1966)






What experience and history teach is this: That people and governments have never learned anything from history. — Georg Wilhelm Friedrich Hegel (1770-1831)






El amor es fuego, pero con el no se cuece el puchero. (Love is a furnace, but it will not cook the stew.) — Spanish proverb






In most things success depends on knowing how long it takes to succeed. — Charles Louis de Montesquieu (1689-1755)






Think much, speak little, and write less. — Italian proverb






Life is 10 percent what you make it, and 90 percent how you take it. — Irving Berlin (1888-1989)






Ah, les bons vieux temps ou nous etions si malheureux! (Ah, the good old times when we were so unhappy!) — French saying






There is no man so good, who, were he to submit all his thoughts and actions to the laws, would not deserve hanging ten times in his life. — Michel de Montaigne (1533-1592)






We are effectively destroying ourselves by violence masquerading as love. — R.D. Laing (1927-1989)






Prophecy is the wit of a fool. — Vladimir Nabokov (1899-1977)






There is nothing more horrifying than stupidity in action. — Adlai E. Stevenson (1900-1965)






What we really are matters more than what other people think of us. — Jawaharlal Nehru (1889-1964)






When a friend speaks to me, whatever he says is interesting. — Jean Renoir (1894-1979)






No man has a right in America to treat any other man tolerantly, for tolerance is the assumption of superiority. — Wendell Willkie (1892-1944)






No man, for any considerable period, can wear one face to himself, and another to the multitude, without finally getting bewildered as to which may be the true. — Nathaniel Hawthorne (1804-1864), The Scarlet Letter






The worst sin toward our fellow creatures is not to hate them, but to be indifferent to them; that's the essence of inhumanity. — George Bernard Shaw (1856-1950)






There are no hopeless situations; there are only men who have grown helpless about them. — Clare Boothe Luce (1903-1987)






No man is happy without a delusion of some kind. Delusions are as necessary to our happiness as realities. — Christian Nestell Bovee






Politics are usually the executive expression of human immaturity. — Vera Brittain (1893-1970)






We fear things in proportion to our ignorance of them. — Livy, Roman historian (64 or 59 BC-17 AD)






In the republic of mediocrity, genius is dangerous. — Robert S. Ingersoll (1833-1899)






The heaviest baggage for a traveler is an empty purse. — German proverb






Christ's Beatitudes






Blessed are the poor in spirit: for theirs is the kingdom of heaven.


Blessed are they that mourn: for they shall be comforted.


Blessed are the meek: for they shall inherit the earth.


Blessed are they which do hunger and thirst after righteousness: for they shall be filled.


Blessed are the merciful: for they shall obtain mercy.


Blessed are the pure in heart: for they shall see God.


Blessed are the peacemakers: for they shall be called the children of God.


Blessed are they which are persecuted for righteousness' sake: for theirs is the kingdom of heaven.


Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.


Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you.






Matthew 5:1-12






The world has achieved brilliance without conscience. Ours is a world of nuclear giants and ethical infants. — General Omar N. Bradley (1893-1981)






All mankind is divided into three classes: Those that are immovable, those that are movable, and those that move. — Arab proverb






He who is learned is not wise; he who is wise is not learned. — Lao Tzu, Tao Te Ching






The price of justice is eternal publicity. — Arnold Bennett (1867-1931)






To have doubted one's own first principles, is the mark of a civilized man. — Oliver Wendell Holmes Jr. (1841-1935)






Ideas won't keep; something must be done about them. — Alfred North Whitehead (1861-1947)






He who confers a favor should at once forget it, if he is not to show a sordid, ungenerous spirit. — Demosthenes (384 B.C.-322 B.C.)






There is many a good man to be found under a shabby hat. — Chinese proverb






The world fears a new experience more than it fears anything. Because a new experience displaces so many old experiences. — D.H. Lawrence (1885-1930)






Your friend is the man who knows all about you, and still likes you. — Elbert Hubbard (1856-1915)






More tears are shed over answered prayers than unanswered ones. — St. Teresa of Avila (1515-1582)






Great wisdom is generous, petty wisdom is contentious. Great speech is impassioned, small speech cantankerous. — Chuang-Tzu (c 369-c 286 BC)






What you see is news, what you know is background, what you feel is opinion. — Lester Markel, American editor (1894-1977)






Only the vanquished remember history. — Marshall McLuhan (1911-1980)






Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it. — George Orwell (1903-1950)






The trouble with being poor is that it takes up all your time. — Willem de Kooning






He, who will not reason, is a bigot; he, who cannot, is a fool; and he, who dares not, is a slave. — William Drummond (1585-1649)






One today is worth two tomorrows. — Benjamin Franklin (1706-1790)






To fear love is to fear life, and those who fear life are already three parts dead. — Bertrand Russell






Any doctrine that will not bear investigation is not a fit tenant for the mind of an honest man. — Robert G. Ingersoll






I never think of the future. It comes soon enough. — Albert Einstein (1889-1955)






The opposite of love is not hate, it's indifference. The opposite of art is not ugliness, it's indifference. The opposite of faith is not heresy, it's indifference. And the opposite of life is not death, it's indifference. — Elie Wiesel (1928- )






I believe that man will not merely endure: he will prevail. — William Faulkner (1897-1962)






There is nothing so powerful as the truth, and nothing so strange. — Daniel Webster (1782-1852)






We fear something before we hate it. A child who fears noises becomes a man who hates noise. — Cyril Connolly (1903-1974)






It is easier to love humanity as a whole than to love one's neighbor. — Eric Hoffer






Nothing is really work unless you would rather be doing something else. — Sir James Barrie (1860-1937)






Men hate those to whom they have to lie. — Victor Hugo (1802-1885)






There is no such thing as conversation. It is an illusion. There are intersecting monologues, that is all. — Dame Rebecca West (1892-1983)






Trouble is only opportunity in work clothes. — Henry J. Kaiser (1882-1967)






Education is hanging around until you've caught on. — Robert Frost






When you shut one eye, you do not hear everything. — Swiss proverb






Most of the shadows of this life are caused by standing in our own sunshine. — Ralph Waldo Emerson (1803-1882)






A nation is a society united by a delusion about its ancestry and by a common hatred of its neighbours. — William Ralph Inge (1860-1954)






He who knows nothing, doubts nothing. — Italian proverb






I dislike arguments of any kind. They are always vulgar, and often convincing. — Oscar Wilde (1856-1900)






Governments exist to protect the rights of minorities. The loved and the rich need no protection—they have many friends and few enemies. — Wendell Phillips (1811-1884)






I venture to suggest that patriotism is not a short and frenzied outburst of emotion but the tranquil and steady dedication of a lifetime. — Adlai E. Stevenson (1900-1965)






After three days without reading, talk becomes flavorless. — Chinese proverb






The wise man is astonished by anything. — André Gide (1869-1951)






There are two statements about human beings that are true: That all human beings are alike, and that all are different. On those two facts all human wisdom is founded. — Mark Van Doren (1894-1972)






Ideas are one thing, and what happens is another. — John Cage






Life is never so bad at its worst that it is impossible to live; it is never so good at its best that it is easy to live. — Gabriel Heatter (1890-1972)






The most exhausting thing in life . . . is being insincere. — Anne Morrow Lindbergh (1906- )






First they ignore you, then they laugh at you, then they fight you, then you win. — Mohandas Karamchand Gandhi (1869-1948)






Never think that war, no matter how necessary, nor how justified, is not a crime. — Ernest Hemingway (1899-1961)






There are no warlike peoples—just warlike leaders. — Ralph Bunche (1904-1971)






This is the final test of a gentleman: His respect for those who can be of no possible service to him. — William Lyon Phelps, American educator (1865-1943)






Life is like a landscape. You live in the midst of it, but can describe it only from the vantage point of distance. — Charles A. Lindbergh (1902-1974)






The final lesson of history: 'Let's never go back there again!' — Nietzsche






When you look into a mirror you do not see your reflection—your reflection sees you. — Anonymous






Laziness is often mistaken for patience. — French proverb






I love criticism just so long as it's unqualified praise. — Sir Noel Coward (1899-1973)






If you are patient in one moment of anger, you will escape a hundred days of sorrow. — Chinese proverb






Of all forms of caution, caution in love is perhaps the most fatal to true happiness. — Bertrand Russell






We have enough religion to make us hate, but not enough to make us love one another. — Jonathan Swift (1667-1745)






Many of us spend half our time wishing for things we could have if we didn't spend half our time wishing. — Alexander Woollcott, American author and critic (1887-1943)






Judge a man by his questions rather than by his answers. — Voltaire






The wise make proverbs and fools repeat them. — Isaac D'Israeli (1766-1848)

Good Thoughts About Life

The most destructive habit	Worry
The greatest joy	Giving
The most endangered species	Dedicated leaders
Our greatest natural resource	Our youth
The greatest “shot in the arm”	Encouragement
The greatest problem to overcome	Fear
The most effective sleeping pill	Peace of mind
The most crippling disease	Excuses
The most powerful force in life	Love
The most destructive pariah	Gossip
The most incredible computer	The human brain
The worst thing to be without	Hope
The deadliest weapon	The tongue
The two most powerful words	Can do
The greatest asset	Faith
The most worthless emotion	Self-pity
The worst thing you can lose	Self-respect
The most satisfying work	Helping others
The ugliest personality trait	Selfishness
The most beautiful attire	A smile!
The most prized possession	Integrity
The most contageous spirit	Enthusiasm
The most powerful communication	Prayer

To the world, you may be just one person;
but to one person, you may be the world!

Measure wealth not by the things you have, but by the
things you have for which you would not take money.

If you bring macaroni and cheese to a covered dish supper,
don't expect to dine on lobster and filet mignon.

A coffee grinder on sale at a 90% discount is
not a great buy if you don't drink coffee.

A STUDY OF FINANCIAL MARKETS

A STUDY OF FINANCIAL MARKETS

SHIV GUPTA

MBA, B.Com.

24, MALE

9021892850

shivgagal@gmail.com

shivgagal@yahoo.co.in     

 

Content

1. Accounting Terms

1.1    Accounts Payable

1.2    Accounts Receivable

1.3    Balance Sheet

1.4    Bank Reconciliation

1.5    Difference between Journal & Ledger

1.6    Golden Rules of Accounting

2. Glossary Of Financial Terms

1.1    American Stock Exchange (AMEX)

1.2    Auction Market

1.3    Bear

1.4    Bear Market

1.5    Bull

1.6    Bid

1.7    Buy-and-Hold

1.8    Bond

1.9    Blue Chip Companies

1.10          Bonus Shares

1.11          Capital Markets

(a)  Primary Markets

(a)    Secondary Market

1.12          Custodian

1.13          Commodity

1.14          Common Stock

1.15          Call Option

1.16          Crash

1.17          Dividend

1.18          Debenture

1.19          Derivatives

1.20          Depository

1.21          Debt Instrument

1.22          Dematerialization

1.23          Equity Share

1.24          Earning Per Share (EPS)

1.25          Exchange Traded Fund (ETF)

1.26          Exchange

1.27          Futures

1.28          Fiscal Policy

1.29          Face Value of a Share/Debenture

1.30          Gross Domestic Product (GDP)

1.31          Hedging

1.32          Investment

1.33          Inflation

1.34          Issues

(a)                             Initial Public Offering (IPO)

(b)                             A Follow on Public Offering (Further Issue)

(c)                             Rights Issue

(d)                             A Preferential Issue

1.35          Issuer

1.36          Intraday Trading

1.37          Index

1.38          Investor

1.39          Liquidity

1.40          Lot

1.41          Leverage

1.42          Mutual Fund

1.43          NASDAQ

1.44          National Exchange For Automated Trading (NEAT)

1.45          National Stock Exchange (NSE)

1.46          Net Asset Value (NAV)

1.47          New York Stock Exchange (NYSE)

1.48          Option

1.49          Preference Shares

1.50          Put Option

1.51          Portfolio Management

1.52          Retained Earning

1.53          Securities and Exchange Board of India (SEBI)

1.54          Strike Price

1.55          Securities

1.56          Sub Prime

1.57          Stock Symbol Extension

1.58          Settlement

1.59          Transfer Agent

1.60          The complete lifecycle of a U.S equity trade

1.61          Underlying Security

1.62          Volatility

1.63          What is the difference between stocks and shares?

1.64          Yield

3. Cash Flow Statement

1.1    Meaning

1.2    Method

(a)    Operating Cash Flow

(b)   Financing Cash Flow

(c)    Investing Cash Flow

1.3    Analyzing the Cash Flow Statement

1.  Accounting Terms

 

1.1                            Accounts Payable - A/P is a form of credit that suppliers offer to their customers by allowing them to pay for a product or service after it has already been received.  This is a current liability. It’s shown in liabilities side of company balance sheet.

1.2                            Account Receivable - A/R is one of a series of accounting transactions dealing with the billing of a customer for goods and services they have ordered.A current asset resulting from selling goods or services on credit (on account)

1.3                            Balance Sheet - A listing of all assets and liabilities for an individual or a business. The surplus of assets over liabilities is the net worth, or what is owned free of debt. The Liabilities side of the balance sheets shows the sources of income into the business and the assets side shows how the income has been utilized.

1.5              Bank Reconciliation - is the process of comparing and matching figures from the accounting records against those shown on a bank statement. The result, any transactions in the accounting records not found on the bank statement or vice-versa are said to be outstanding.

                                    Reasons for Reconciliation:

1)      Cheques deposited into bank but not recorded in the bank book.

2)      Cheques issued but not presented in bank.

3)      Bank charges directly debited from bank account not mentioned in bank book.

4)      ECS, not mentioned in bank book.

5)      Interested credited into bank account not mentioned in bank book.

6)      Cheques deposited not cleared.

1.6              Difference between Journal & Ledger - Journal: A first recording of financial                transactions as they occur in time, so that they can be used for future reconciling and transfer to other official accounting records such as the general ledger. A journal will state the date of the transaction, which account(s) were affected and the amounts, usually in a double-entry bookkeeping method.

Ledger: A "book" containing accounts. For example, there is the general ledger that        contains the balance sheet and income statement accounts.

1.7                           Golden Rules of Accounting –

(1) Personal A/c: Debit the Receiver & Credit the Giver.

(2) Real A/c: Debit what is come in & Credit what is Goes out.

(3) Nominal A/c: Debit the Expenses or Losses & Credit the Income or Profit.

2.     Glossary of Financial Terms

 

1.1               American Stock Exchange (AMEX) - Abbreviated AMEX. A market located in New York City that handles approximately one-fifth of all securities trades within the United States.

1.2               Auction Market - A market in which buyers enter competitive bids, and sellers enter competitive offers simultaneously. The NYSE is an auction market.

1.3              Bear - An investor who acts on the belief that a security or the market is falling or is     expected to fall.

1.4                            Bear Market - A market in which prices of a certain group of securities are falling or are expected to fall.

1.5                            Bull - An investor who thinks the market or a specific security or industry will rise.

1.6                            Bid - An indication by an investor, a trader or a dealer of a willingness to buy a security or commodity. The price at which an investor can sell to a broker-dealer. The quoted bid is the price at which a Market Maker is willing to buy a stock.

1.7                            Buy-and-hold - A long-term investing strategy in which an investor’s stock portfolio is fully invested in the market all the time.

1.8                            Bond - A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer, unlike in the case of equities. A bond is a formal contract to repay borrowed money with interest at fixed intervals.

1.9                            Blue Chip Companies - A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. Most blue chip stocks pay regular dividends, even when business is faring worse than usual. They are valued by investors seeking relative safety and stability, though prices per share are usually high.

1.10                        Bonus Shares - The term bonus means an extra dividend paid to shareholders in a joint stock company from surplus profits. When a company has accumulated a large fund out of profits - much beyond its needs, the directors may decide to distribute a part of it amongst the shareholders in the form of bonus. Bonus can be paid either in cash or in the form of shares. Cash bonus is paid by the company when it has large accumulated profits as well as cash to pay dividend. Many a time, a company is not in a position to pay bonus in cash in spite of sufficient profits because of unsatisfactory cash position or because of its adverse effects on the working capital of the company. In such a position, the company pays a bonus to its shareholders in the form of shares; a free share thus issued is known as a bonus share.

1.11                        Capital Market - The capital market (securities markets) is the market for securities, where companies and the government can raise long-term funds. The capital market includes the stock market and the bond market. It is a place where investors come together to buy and sell shares.

(a) Primary Markets - The first opportunity that investors have to buy a newly-issued security occurs in the Primary Market. After the first purchases, subsequent trading is said to occur in the Secondary Market.

(b) Secondary Market - is the financial market for trading of securities that have already been issued in an initial private or public offering. An example is the New York Stock Exchange. All stock exchanges are part of the Secondary Market, where investors buy securities from other investors (as opposed to an issuing company).

1.12                       Custodian - A financial institution that has the legal responsibility for a customer’s securities. This implies management as well as safekeeping.

1.13                        Commodity - Any bulk good traded on an exchange or in the cash market. Examples include metals, grains, and meats.

1.14                        Common Stock - A class of stock in a company, normally with voting rights. Corporations may have several classes of common stock, as well as Preferred Stock, or they may have a single class of common stock. Common stockholders are on the bottom of the ladder in a corporation’s ownership structure, and have rights to a company’s assets only after bond holders, preferred shareholders and other debt holders have been satisfied.

1.15                        Call Option - An option contract that gives the holder the right to buy a certain quantity (usually 100 shares) of an underlying security from the writer of the option, at a specified price (the strike price) up to a specified date (the expiration date). Also called call.

1.16                        Crash - A sudden, severe, and widespread decline in stock prices, usually resulting from both economic influences and panic.

1.17                        Dividend - A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.

1.18                        Debenture - the term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note. A type of debt instrument that is not secured by physical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture.

1.19                        Derivatives - A derivative is a financial instrument or more simply, an agreement between two people or two parties - that have a value determined by the price of something else (called the underlying). It is a financial contract with a value linked to the expected future price movements of the asset it is linked to - such as a share or a currency. There are many kinds of derivatives, with the most notable being swaps, futures, and options.

Derivatives allow risk about the price of the underlying asset to be transferred from one party to another. For example, a wheat farmer and a miller could sign a futures contract to exchange a specified amount of cash for a specified amount of wheat in the future. Both parties have reduced a future risk: for the wheat farmer, the uncertainty of the price, and for the miller, the availability of wheat. However, there is still the risk that no wheat will be available because of events unspecified by the contract, like the weather, or that one party will renege on the contract. Although a third party, called a clearing house, insures a futures contract, not all derivatives are insured against counter-party risk.

From another perspective, the farmer and the miller both reduce a risk and acquire a risk when they sign the futures contract: The farmer reduces the risk that the price of wheat will fall below the price specified in the contract and acquires the risk that the price of wheat will rise above the price specified in the contract (thereby losing additional income that he could have earned). The miller, on the other hand, acquires the risk that the price of wheat will fall below the price specified in the contract (thereby paying more in the future than he otherwise would) and reduces the risk that the price of wheat will rise above the price specified in the contract. In this sense, one party is the insurer (risk taker) for one type of risk, and the counter-party is the insurer (risk taker) for another type of risk. http://www.vijaybharat.com/Understanding%20Derivatives.htm

1.20                        Depository – A Depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, Government, securities, units etc.) in electronic form.

1.21                        Debt Instrument - represents a contract whereby one party lends money to another on pre-determined terms with regards to rate and periodicity of interest, repayment of principal amount by the borrower to the lender.

In the Indian securities markets, the term bond’ is used for debt instruments issued by the Central and State governments and Public sector organizations and the term ‘debenture’ are used for instruments issued by private corporate sector.

1.22                        Dematerialization – is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investor’s account with his Depository Participant (DP).

1.23                        Equity Shares - The equity share basically represents ownership in the company. Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs. 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a share. Thus, the company then is said to have 20, 00,000 equity shares of Rs. 10 each. The holders of such shares are members of the company and have voting rights.

1.24                        Earning Per Share (EPS) – EPS measures the profit available to the equity shareholders per share, that is, the amount that they can get on every share held. It is calculated by dividing the profits available to the shareholders by number of outstanding shares. The profits available to the ordinary shareholders are arrived at as net profits after taxes minus preference dividend.

Net Profit Available To the Shareholder

EPS= ------------------------------------------------------------

                 Number of Ordinary Shares Outstanding

1.25                        Exchange Traded Fund (ETF) - Abbreviated ETS. An open-ended Mutual Fund that can be continuously traded throughout the day. ETFs attempt to replicate the changes of an index of a specific financial market, so active management is unnecessary.

1.26                        Exchange - A market where stocks are bought and sold. For example: New York Stock Exchange (NYSE), American Stock Exchange (AMEX), National Association of Securities Dealers Automated Quotations Stock Market (NASDAQ) and Over the Counter (OTC).

1.27                        Futures - Investment contracts which specify the quantity and price of a commodity to be purchased or sold at a later date. On contract date, the buyer must take physical possession or make delivery of the commodity, which can only be avoided by closing out the contract(s) before that date. Futures can be used for speculation or hedging.

1.28                        Fiscal Policy - The federal tax and spending policies set by Congress or the president. These policies affect tax rates, interest rates and government spending in an effort to control the economy.

1.29                        Face Value of a Share/Debenture – The nominal or stated amount (in Rs.) assigned to a security by the issuer. For shares, it is the original cost of the stock shown on the certificate; for bonds, it is the amount paid to the holder at maturity. Also known as par value or simply par. For an equity share, the face value is usually a very small amount (Rs. 5, Rs. 10) and does not have much bearing on the price of the share, which may quote higher in the market, at Rs. 100 or Rs. 1000 or any other price. For a debt security, face value is the amount repaid to the investor when the bond matures (usually, Government Securities and corporate bonds have a face value of Rs. 100). The price at which the security trades depends on the fluctuations in the interest rates in the economy.

1.30                        Gross Domestic Product (GDP) - A measure of output from Any Country factories and related consumption in the United States. It includes consumption, government purchases, investments, and exports minus imports. It does not include products made by U.S. companies in foreign markets.

1.31                        Hedging - An investment strategy of lowering risk by buying securities that have offsetting risk characteristics. A perfect hedge eliminates risk entirely. Hedging strategies lower return since there is a cost involved in hedging. For example, a portfolio manager could short a futures contract which will perfectly offset any decrease in the value of the portfolio. Options and short selling stock can also be used for hedging. Hedge funds are investment pools that are free to use any hedging techniques they desire and they often make large bets in a relatively small number of different holdings.

Hedging is a technique that attempts to reduce risk. Hedging also occurs when an individual or institution buys an asset (like a commodity, a bond that has coupon payments, a stock that pays dividends, and so on) and sells it using a futures contract.

1.32                        Investment – The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.

1.33                        Inflation - A wide spread rise in prices that exceeds that rate of increased purchasing power.

1.34                        Issues – Primarily, issues can be classified as a Public, Rights or Preferential issues (also known as private placements). While public and rights issues involve a detailed procedure, private placements or preferential issues are relatively simpler. The classification of issues is illustrated below:

(a)    Initial Public Offering (IPO): is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer’s securities.

(b)   A Follow on public offering (Further Issue): is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document.

(c)    Rights Issue:: is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ration to the number of securities held prior to the issue. The route is best suited for companies who would like to raise capital without diluting stake of its existing shareholders.

(d)   A Preferential Issue: is an issue of shares or of convertible securities by listed companies to a select group of persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue. This is a faster way for a company to raise equity capital. The issuer company has to comply with the companies Act and the requirements contained in

1.35                        Issuer - is a legal entity that develops, registers and sells securities for the purpose of financing its operations.

Issuers may be domestic or foreign governments, corporations or investment trusts. Issuers are legally responsible for the obligations of the issue and for reporting financial conditions, material developments and any other operational activities as required by the regulations of their jurisdictions.

1.36                        Intraday Trading - Intraday share trading refers to the buying and selling (or vice versa) of the same script in the same trading session (on the same day).

1.37                        Index – An Index shows how a specified portfolio of share prices is moving to order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.

1.38                        Investor - A person who seeks to minimize risk in the purchase of securities. Companies with good track records are preferred and purchase at fair value is important. Companies are held for the long-term (at least 3 to 5 years) rather than trying to time the market.

1.39                        Liquidity - The ability of a company to convert assets into cash or equivalents without significant loss. Good liquidity enables a company to earn discounts, maintain a good credit rating, meet obligations promptly, and take advantage of market opportunities.

This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding for large transactions to occur without a substantial change in price. Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and to a corporation's cash position, which is how much the value of the corporation's current assets exceeds current liabilities.

1.40                        Lot - A group of identical UNITS (for securities) or nearly identical units (for collectibles) of an investment that are traded at the same time and price. Open lots are the contents of open investments and can be long (buys) or short (short sell). Closed lots are the contents of closed investments and can be long (sell) or short (buy to cover).

1.41                        Leverage - The extent to which a company uses debt to finance expansion and growth. It is measured by the Debt to Equity and Debt to Capital Ratios. When comparing companies’ leverage ratios, do so within the same industry, to be fair.

1.42                        Mutual Fund - Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities. The sum of the collected amount is called ‘Corpus’. It is substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund Management Company based on the fund’s net asset value (NAV), which is determined at the end of each trading session, NAV is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual funds which are short term instruments.

1.43                        NASDAQ - An acronym for National Association of Security Dealers Automated Quotations System, which is a nationwide network of computers and other electronic equipment that connects dealers in the over-the-counter market across the U.S. The system provides the latest BID and ASKING PRICES quoted for any security by different dealers. This enables an investor to have his or her transaction done at the best price. Due to NASDAQ, the over-the-counter market in the U.S. is like a vast but convenient trading floor on which several thousand stocks are traded.

1.44                        National Exchange For Automated Trading (NEAT) – NSE is the first exchange in the world to use satellite communication technology for trading. Its trading system, called National Exchange for Automated Trading (NEAT), and is a state of-the-art client server based application. At the server end all trading information is stored in memory database to achieve minimum response time and maximum system availability for users. It has uptime record of 99.7 %. For all trades entered into NEAT system, there is uniform response time of less than one second.

1.45                        National Stock Exchange (NSE) - It is a nationwide screen-based trading network using computers, satellite link and electronic media that facilitate transactions in securities by investors across India. The idea of this model exchange (traced to the Pherwani Committee recommendations) was an answer to the deficiencies of the older stock exchanges as reflected in settlement delays, price rigging and a lack of transparency.

1.46                        Net Asset Value (NAV) - The per share price of a mutual fund. For a no-load fund, NAV is the price received by both buyers and sellers. For front loaded mutual funds, NAV is equivalent of the bid price (what shareholders can get for selling a share), while the offering price is the price buyers must pay per share (and includes front load). The NAV is usually calculated at the end of each trading day by taking the closing prices of all securities owned plus cash and equivalents and subtracting all liabilities then dividing by the number of shares outstanding, which for open-end funds, fluctuates depending on daily number of redemptions and purchases. Many new funds are issued at a NAV of $10. After a distribution, the NAV falls by the amount equal to the distribution.

1.47                        New York Stock Exchange (NYSE) - The largest stock exchange in the United States. It is a corporation, operated by a board of directors, and it is responsible for setting policy, supervising Exchange and member activities, listing securities, overseeing the transfer of members’ seats on the Exchange, and judging whether an applicant is qualified to be a specialist.

1.48                        Option - A security that represents the right to buy or sell a specified amount of an underlying stock, bond, futures contract, etc. at a specified price within a specified time. The purchaser acquires a right, and the seller assumes an obligation. A contract that gives the owner the right, if exercised, to buy or sell a security or basket of securities (index) at a specific price within a specific time limit. Usually, they are traded as securities themselves, with buyers and sellers trying to profit from price changes. They are generally available for 1 to 9 months, with some longer term options (called LEAPS) also available for selected securities. Stock option contracts are generally for the right to buy or sell 100 shares of the underlying stock (100 is the multiplier). Trading in options should only be undertaken by sophisticated investors.

1.49                        Preference Shares - are those shares which are given preference as regards to payment of dividend and repayment of capital. Preference shareholders are given preference over equity shareholders as in the case of winding up of the company, their capital is paid back first and then the equity shareholders are paid. Preference shareholders cannot exercise their voting rights on all the matters. They can vote only on the matters affecting their own interest.

Usually, non-voting capital stock that pays dividends at a specified rate and has preference over common stock in the payment of dividends and the liquidation of assets.

1.50                        Put Option - A put option gives the owner the right, but not the obligation, to sell the underlying stock at a given price (the strike price) by a given time (the expiration date). The owner is speculating that the option will go up in value and the underlying stock will go down in value. The purpose can be to either speculate with the option (hope it goes up and sell for a profit) or trade the underlying stock at a locked in price if the stock price goes down enough. For example, an AAA MAR 65 put would give the owner the right to sell 100 shares of AAA at $65 (strike price) per share between now and the third Friday in March (expiration date).

1.51                        Portfolio Management - Where assets are combined into a portfolio that fits the investor's preferences (i.e. level of risk) and needs (i.e. regular dividends).

The aim of Portfolio Management is to achieve the maximum return from a portfolio which has been delegated to be managed by an individual manager or financial institution. The manager has to balance the parameters which define a good investment (i.e. security, liquidity and return). The goal is to obtain the highest return for the client of the managed portfolio.

1.52                        Retained Earning - The earnings retained by a company after payment of all expenses and dividends. Retained earnings grow as they accumulate year after year. They are shown on the company’s books as a cumulative amount in the Balance Sheet section under Shareholder Equity.    

1.53                        Securities and Exchange Board of India (SEBI) – is the regulatory authority in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange Board of India (SEBI) with statutory powers for (a) protecting the interests of investors in securities (b) promoting the development of the securities market and (c) regulating the securities market. Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI has been obligated to perform the aforesaid functions by such measures as it thinks fit. In particular, it has powers for:

§  Regulating the business in stock exchanges and any other securities markets.

§  Registering and regulating the working of stock brokers, sub-brokers etc.

§  Promoting and regulating self-regulatory organizations.

§  Prohibiting fraudulent and unfair trade practices.

§  Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, intermediaries, self-regulatory organizations, mutual funds and other persons associated with the securities market.

1.54                        Strike Price - The price the owner of an option can purchase or sell the underlying security. The purchases and sales are also known as calls and puts.

1.55                         Securities – The definition of ‘Securities’ as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.

1.56                        Sub Prime - The term used for lending to borrowers at a higher rate than the prime rate as they have a higher risk of default. Subprime borrowers typically have low credit scores due to prior bankruptcy, missed loan payments, home repossession etc.

1.57                        Stock Symbol Extension - The character or characters that may follow the stock symbol to uniquely identify a listed security. It can be a single alphabetic character, two alphabetic characters, or a combination of two plus one characters with a maximum of eight characters for the stock symbol, extension and separator dots in between. For example, BMO.PR.U. Currently, they include:

§  A-B - class of shares

§  DB - debenture

§  E - equity dividend

§  H - NEX market

§  IR - installment receipts

§  NO, NS, NT - notes

§  P - Capital Pool Company

§  PR - preferred

§  R - subscription receipts

§  RT - rights

§  S - special U.S. terms

§  U, V - U.S. funds

§  UN - units

§  W - when issued

§  WT - warrants

1.58                        Settlement - The process whereby obligations arising under a derivative transaction are discharged through payment or delivery or both. In other words, “The process that follows a transaction when the seller delivers the security to the buyer and the buyer pays the seller for the security.”

1.59                        Transfer Agent - A trust company appointed by a listed company to keep a record of the names, addresses and number of shares held by its shareholders. Frequently, the transfer agent also distributes dividend cheques to the company's shareholders.

1.60                        The complete lifecycle of a U.S equity trade - Order Capture, its execution in the market, affirmation/confirmation, foreign exchange, clearing, settlement, and reporting.

1.61                        Underlying Security - The security that must be delivered when another security is exercised. For example, if a call option is exercised, then the underlying stock is delivered to the call owner. Warrants, rights, options, and convertible securities all have underlying securities. For futures options, futures are the underlying security.

1.62                        Volatility - The measure of the tendency of prices to fluctuate widely. Prices of small companies tend to be more volatile than those of large corporations. Beta is a measure of volatility.

1.63                        What is the difference between stocks and shares? - Answer: “Stock” is a general term used to describe the shares of any company and "shares" refers to a specific stock of a particular company. So, if investors say they own stocks, they are generally referring to their overall ownership in one or more companies. If investors say they own shares - the question then becomes - shares in what company?

Stocks: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

Shares: A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares.

1.64                        Yield - This is the measure of the return on an investment and is shown as a percentage. A stock yield is calculated by dividing the annual dividend by the stock's current market price. For example, a stock selling at $50 and with an annual dividend of $5 per share yields 10%. A bond yield is a more complicated calculation, involving annual interest payments, plus amortizing the difference between its current market price and par value over the life of the bond.

3.  Cash Flow Statement

 

1.1             Meaning - According to Institute of Cost & Work Accounts of India, “Cash Flow                     Statement setting out the flow of cash under different heads of sources and their utilizations to determine the requirements of cash during the given period and prepare for its adequate provisions.

                  A Cash Flow Statement is a statement showing inflows & outflows of cash. It can be called as a “Statement of changes in financial position-cash basis.”

                  Cash Flow Statement analysis the reason for changes in balance of cash in hand and at bank as on one date to a next date after a gap, usually the accounting period.

                  Conclusion by me, “Cash Flow Statement is a statement for study of changes in different items of Working Capital.”

1.2                          Methods –

(a)    Operating Cash Flow:

Inflows - Money received from customers for sales of products or services.
Outflows - Money paid to suppliers, employees, etc. for normal business expenses.

(b)   Financing Cash Flow:

Inflows - Money received from stockholders purchasing company stock, from bondholders for bonds payable, and money borrowed from banks and other creditors.
Outflows - Money paid to stockholders for dividends, to bondholders, banks and other creditors.

(c)    Investing Cash Flow:

Inflows - Money received from selling assets, including land, buildings equipment, stocks, bonds. Money received from loans made to others, such as Notes Receivable.
Outflows - Money paid to purchase assets; and money paid out to make loans to others.

1.3                          Analyzing the Cash Flow Statement - Analyzing cash flows is an important part of financial statement analysis. Here are some important things to look for:

(1.) There should be a net Increase in Cash from Operating Activities. If operations don't produce positive cash flows, the business will soon be in trouble. Without adequate operating cash flows, the company may have to dip into cash reserves or sell investments to meet regular payment of expenses.

(2.) If a company shows net Increase in Investing Cash Flows, it means they are selling off assets. That is generally not a good sign. I would also look to see if the company was posting losses and had negative cash flows from Operating activities. This might indicate that Management is selling off assets to pay bills. More analysis is needed in this case.