Archive for the ‘Margin’ Category

Definition: Leveraged Buyout LBO

Defined: The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.   Read More

Equity Borrowing Surges

Margin debt (borrowing to buy stocks) climbed by $38.2 billion in September through November according to the NYSE. This was the biggest in 3 months since mid-2007. Overall though, equity debt is much below market peak levels. This could fuel equity markets and be a nice bullish sign for us. FULL ARTICLE Read More

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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.

The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.

The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.

Indexes are often used as a proxy for the stock market and cannot be invested in directly.