The most comprehensive educational resources for finance

How to Buy a DRIP Stock?

Dividend Reinvestment Plans (DRIPs) are an investment option offered by corporates to its shareholders under which the dividends due to the investors are directly reinvested in the new stocks issued by the corporation. Such a plan is beneficial for long-term investors, as the money gets reinvested immediately and the investor does not have to incur

A Value Investing Approach to Manage an Equity Portfolio

This presentation by Vincenzo Boin makes the case of a value investing approach to manage an equity portfolio. Such an approach is suitable for long term risk-averse investors. “We should remember that there is a large body of research stating that on average value stocks do outperform growth, the result is more pronounced with small

Closely Held Companies, Distressed Securities and Commodities

This video by Arif Irfanullah provides a very clear conceptual understanding of the alternative investments: closely-held companies and distressed securities as a part of the CFA Level 1 syllabus. This video talks about: Closely Held Companies Closely Held Company Valuation Distress Securities Investing Investing in Commodities Motivation and Investment Vehicles

Understanding Initial Public Offering with an Example

In the previous article we looked at the process of initial public offering. Let’s now take an example to understand how the maths and numbers in an IPO work. Let’s say that a fictitious company Sound Electronics comes out with an IPO in which it raises $300 million by selling 100 million ordinary shares at

What is Initial Public Offering (IPO)?

When a company wants to raise money from the public, it does so by approaching investors in the primary market. The process of raising money by issuing new securities to the investors in the primary market is known as Initial Public Offering. Once the security has been issued, investors can trade these securities (buy and

CFA Level 1 – Venture Capital and Hedge Funds

This video by Arif Irfanullah provides a very clear conceptual understanding of the alternative investments: venture capital and hedge funds as a part of the CFA Level 1 syllabus. This video talks about: Venture Capital Investing Venture Capital Investment Characteristics Venture Capital Valuation and Risk Hedge Funds Classification of Hedge Funds Fund of Funds Investing

CFA Level 1 – Real Estate Investments

This video by Arif Irfanullah provides a very clear conceptual understanding of the alternative investments: real estate as a part of the CFA Level 1 syllabus. This video talks about: Forms of Real Estate Investment Valuation Approaches Cost Approach Sales Comparison Approach Income Approach Discounted After-tax Cash Flow Approach

Lecture 20 – Professional Money Managers and Their Influence

Professor Shiller argues that institutional investors are fundamentally important to our economy and our society. Following his thoughts about societal changes in a modern and capitalist world, he turns his attention to the fiduciary duties of investment managers. He emphasizes the “prudent person rule,” and critically reflects on the limitations that these rules impose on

Lecture 19 – Overview of Investment Banking

Professor Shiller characterizes investment banking by contrasting it to consulting, commercial banking, and securities trading. Then, in order to see the essence of investment banking, he reviews some of the principles that John Whitehead, the former chairman of Goldman Sachs, has formulated. These principles are the basis for a discussion of the substantial power that

The Accounting Trick That Fooled Polly Peck’s Investors

Asil Nadir has been sentenced for his role in Polly Peck’s downfall. But the truth is investors should have bailed out long before his firm went bust. Tim Bennett explains. Asil went to jail for theft of company assets. However the amounts involved were small compared to the amount the company lost on unhedged forex