Educational articles Archives - Page 29 of 61

What is Modern Monetary Theory (MMT)?

September 10, 2020September 3, 2020 by Lauren Hua

Governments can try and stimulate the economy through various methods. One method used is monetary theory which involves increasing the money supply. Governments can adopt monetary policy by decreasing the interest rates, decreasing the reserves which banks are required to hold, or printing more money to increase the supply of money in the economy. However, there is another policy called Modern Monetary Policy which we discuss in this article and we include arguments for and against this theory. What is …

What are share buybacks and why do companies do it?

August 27, 2020 by Lauren Hua

Companies may find they have excess cash but see no opportunities for expansion. In this situation, they may want to participate in a buyback to use these funds which can increase their ownership. In this article we talk about what a share buyback is and why companies participate in them. What is a share buyback? Share buybacks occur when a company repurchases their own shares so they can gain back some ownership from shareholders. They do this by offering shareholders …

Differences between value investing and technical investing

August 20, 2020 by Lauren Hua

There are different types of strategies investors can use to trade on the stock market. Two common strategies are value investing and technical investing. Value investing is a strategy where the intrinsic value of a stock is evaluated and stocks are brought using fundamental analysis. Value investors like to buy stocks that are underpriced in the market. Technical investing looks more at the price action of the stock. By analysing price movements investors can weigh up the probabilities that a …

What is a stock split and why do they happen?

August 13, 2020 by Lauren Hua

Apple has recently announced they will be undertaking a stock split. In this article we discuss the definitions and the reasons behind this. What is a stock split? Stock Splits can come in many ratios but the most common is a 2 for 1 stock split. These corporate actions occur when the board of directors decide to increase the amount of shares outstanding. If a company had 50 million shares outstanding prior to the split, the corporate action will increase …

Important Financial Ratios

July 30, 2020 by Lauren Hua

Each Tuesday we produce a research document called “The Dynamic Investor” where we analyse various stocks fundamentally as well as technically. Each stock which is covered also has 5 fundamental metrics. Whilst there are many other important metrics that investors need to understand, these 5 are a good starting point. In this article we explain what each metric means and why they are important when analysing stocks. Market Cap A market cap (“market capitalisation” in full) of a stock is …