Activity 2 Using Stock Quotes

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In recent years, annual trading in stocks—necessarily creating, by reason of the transaction costs involved, negative value for traders—averaged some $33 trillion. But capital formation—that is, directing fresh investment capital to its highest and best uses, such as new businesses, new technology, medical breakthroughs, and modern plant and equipment for existing business—averaged some $250 billion. Put another way, speculation represented about 99.2 percent of the activities of our equity market system, with capital formation accounting for 0.8 percent.
John C. Bogle (The Clash of the Cultures: Investment vs. Speculation)
To fill this gap in the capital market, Davis and Rock set themselves up as a limited partnership, the same legal structure that had been used by a short-lived rival called Draper, Gaither & Anderson.[18] Rather than identifying startups and then seeking out corporate investors, they began by raising a fund that would render corporate investors unnecessary. As the two active, or “general,” partners, Davis and Rock each seeded the fund with $100,000 of their own capital. Then, ignoring the easy loans to be had from the fashionable SBIC structure, they raised just under $3.2 million from some thirty “limited” partners—rich individuals who served as passive investors.[19] The beauty of this size and structure was that the Davis & Rock partnership now had a war chest seven and a half times larger than an SBIC, and with it the ammunition to supply companies with enough capital to grow aggressively. At the same time, by keeping the number of passive investors under the legal threshold of one hundred, the partnership flew under the regulatory radar, avoiding the restrictions that ensnared the SBICs and Doriot’s ARD.[20] Sidestepping yet another weakness to be found in their competitors, Davis and Rock promised at the outset to liquidate their fund after seven years. The general partners had their own money in the fund, and thus a healthy incentive to invest with caution. At the same time, they could deploy the outside partners’ capital for a limited time only. Their caution would be balanced with deliberate aggression. Indeed, everything about the fund’s design was calculated to support an intelligent but forceful growth mentality. Unlike the SBICs, Davis & Rock raised money purely in the form of equity, not debt. The equity providers—that is, the outside limited partners—knew not to expect dividends, so Davis and Rock were free to invest in ambitious startups that used every dollar of capital to expand their business.[21] As general partners, Davis and Rock were personally incentivized to prioritize expansion: they took their compensation in the form of a 20 percent share of the fund’s capital appreciation. Meanwhile, Rock was at pains to extend this equity mentality to the employees of his portfolio companies. Having witnessed the effect of employee share ownership on the early culture of Fairchild, he believed in awarding managers, scientists, and salesmen with stock and stock options. In sum, everybody in the Davis & Rock orbit—the limited partners, the general partners, the entrepreneurs, their key employees—was compensated in the form of equity.
Sebastian Mallaby (The Power Law: Venture Capital and the Making of the New Future)
1. Give your toddler some large tubular pasta and a shoelace.  Show her how to thread the shoelace through the pasta. 2. Take an empty long wrapping paper tube and place one end on the edge of the sofa and the other end on the floor.  Give him a small ball such as a Ping Pong ball to roll down the tube.   3. Give her some individually wrapped toilet tissues, some boxes of facial tissue or some small tins of food such as tomato paste.  Then let her have fun stacking them.     4. Wrap a small toy and discuss what might be inside it.  Give it to him to unwrap. Then rewrap as he watches.  Have him unwrap it again.    5. Cut  such fruits as strawberries and bananas into chunks.  Show her how to slide the chunks onto a long plastic straw.  Then show her how you can take off one chunk at a time, dip it into some yogurt and eat it.   6. Place a paper towel over a water-filled glass.  Wrap a rubber band around the top of the glass to hold the towel in place.  Then place a penny on top of the paper towel in the centre of the glass.  Give your child a pencil to poke holes in the towel until the penny sinks to the bottom of the glass.   7. You will need a small sheet of coarse sandpaper and various lengths of chunky wool.  Show him how to place these lengths of wool on the sandpaper and how the strands stick to it.   8. Use a large photo or picture and laminate it or put it between the sheets of clear contact paper.  Cut it into several pieces to create a puzzle.   9. Give her two glasses, one empty and one filled with water.  Then show her how to use a large eyedropper in order to transfer some of the water into the empty glass.   10. Tie the ends/corners of several scarves together.  Stuff the scarf inside an empty baby wipes container and pull a small portion up through the lid and then close the lid.  Let your toddler enjoy pulling the scarf out of the container.   11. Give your child some magnets to put on a cookie sheet.  As your child puts the magnets on the cookie sheet and takes them off, talk about the magnets’ colours, sizes, etc.   12. Use two matching sets of stickers. Put a few in a line on a page and see if he can match the pattern.  Initially, you may need to lift an edge of the sticker off the page since that can be difficult to do.    13. You will need a piece of thin Styrofoam or craft foam and a few cookie cutters.  Cut out shapes in the Styrofoam with the cookie cutters and yet still keep the frame of the styrofoam intact.  See if your child can place the cookie cutters back into their appropriate holes.        14. Give her a collection of pompoms that vary in colour and size and see if she can sort them by colour or size into several small dishes. For younger toddlers, put a sample pompom colour in each dish.   15. Gather a selection of primary colour paint chips or cut squares of card stock or construction paper.  Make sure you have several of the same colour.  Choose primary colours.  See if he can match the colours.  Initially, he may be just content to play with the colored chips stacking them or making patterns with them.
Kristen Jervis Cacka (Busy Toddler, Happy Mom: Over 280 Activities to Engage your Toddler in Small Motor and Gross Motor Activities, Crafts, Language Development and Sensory Play)
This is an extreme example, but easy math. If a $20.00 stock declines by 50% to $10.00, you will need a 100% gain to break even. Why? 100 shares of a $20.00 stock are worth $2,000.00 dollars. After a 50% decline, your investment is now only $1,000.00. So, even if the stock rebounds 50% back to the original price on the following day, your $1,000.00 is now only $1,500.00. 75% down, you need 300% to get back to even. If you were wrong on a stock. Take a loss. It's tuition. Use what you have left to make better choices.
John Endris (Ten Proven Strategies that Will Increase Your Stock Market Returns: Trading Techniques for Active Investors (Smart Money Book 3))
Standard accounting practices might not factor the value of communities into the value of a firm, but stock markets do. Little by little, the accountants are catching up. A team of experts collaborating with the consulting and accounting firm of Deloitte published research that sorts companies into four broad categories based on their chief economic activity: asset builders, service providers, technology creators, and network orchestrators. Asset builders develop physical assets that they use to deliver physical goods; companies like Ford and Walmart are examples. Service providers employ workers who provide services to customers; companies like UnitedHealthcare and Accenture are examples. Technology creators develop and sell forms of intellectual property, such as software and biotechnology; Microsoft and Amgen are examples. And network orchestrators develop networks in which people and companies create value together—in effect, platform businesses. The research suggests that, of the four, network orchestrators are by far the most efficient value creators. On average, they enjoy a market multiplier (based on the relationship between a firm’s market valuation and its price-to-earnings ratio) of 8.2, as compared with 4.8 for technology creators, 2.6 for service providers, and 2.0 for asset builders.16 It’s only a slight simplification to say that that quantitative difference represents the value produced by network effects.
Geoffrey G. Parker (Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You: How Networked Markets Are Transforming the Economy―and How to Make Them Work for You)
In investing, everything begins with decisions. There’s a hall-of-mirrors quality to it as we are assessing the decisions of others. We’re dealing with the unknown future, and the facts are not in evidence. So, as social animals, we seek other opinions, which can be wrong, sometimes dramatically. As individuals, the best we can do is make decisions mindfully, using our System 2 (thinking slowly), aiming for fewer but better choices. Most directly, this means avoiding excessive turnover and trying to invest based on “What’s it worth?” rather than “What happens next?” It also means choosing a format for investing that works for you—whether stocks, index funds, actively managed funds, or something else altogether.
Joel Tillinghast (Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing (Columbia Business School Publishing))
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