Principles of Finance_Biederman_Date_022210

Principles of Finance_Biederman_Date_022210 - Friday...

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Friday continued - Important financial statements (terms & concepts) o Balance sheet, income statement, Cash flow, Stockholders Equity - MVA; money value added (what market says it is worth) - EVA; economic value added Any financial asset is valued on the books, MVA—recognizing that company is not shutting down today - Overview of omniture financials “Follow the money”—Cash flow is the most important from a financial standpoint Time, Value, and Money Example: Value of $24 invested at 8% compounded semi-annually for 38 years - $23,000,000,000,000 Trading-investing graph - Sell high, buy low Anomalies and Stocks - January—small stocks; behaves in a manner is should not but still does - Buffett/Lynch—what do they know that we don’t? - Mondays—weird - Democrats/Republicans—When/which is better for stocks? - Super bowl $10000 invested per year (40 years) Annual Rate Total Return 0% (social security) $400,000 2% (inflation) $604,020 5% (bonds) $1,208,000 10% (stocks) $4,425,920 Won’t be able to live on social security alone, need something else Mortgages: terms
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