Stock Market Club

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Stock Market Club

• November 28, 2007

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Term of the Week

• Margin
• Margin buying-A risky technique involving the
  purchase of securities with borrowed money, using
  the shares themselves as collateral. Usually done
  using a margin account at a brokerage, and
  subject to fairly strict SEC buying on margin.
• Margin call-
• A call from a broker to a customer (called a
  maintenance margin call) or from a clearinghouse
  to a clearing member (called a variation margin
  call) demanding the deposit of cash or marginable
  securities to satisfy the Regulation T
  requirements and the house maintenance
  requirement for the purchase or short sale of
  securities or to cover an adverse price movement.

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Agenda

• Market Commentary
• Stock Picks
• Buying Power/Margin
• Short Selling

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Market Commentary

• DJIA 331.01 2.55
• NASDAQ 82.11 3.18
• SP 500 40.79 2.86
• Crude Oil Lost 3.80 today
• down to 90.62

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Dow Jones Industrials YTD
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NASDAQYTD
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SP 500YTD
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Market surge

• The DJIA was up 2.55 today
• Much needed rally as the markets have been
  deteriorating all week
• DJIA had lost almost all the gains it made for
  the year
• Donald Kohn Fed vice chairman hinted a fed cut at
  next meeting if needed

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DJIA 10 DAY
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Discussion

• Questions?
• Comments?

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Stock Picks/ Sector Picks
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Buying Power/Margin

• Margin is extra cash you dont have
• Collateralized on the stocks you own, by the bank
• You pay a percent premium
• Predetermined amount of margin you can take out

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Buying Power/ Margin

• Extremely Risky because it amplifies gains and
  losses
• Margin call obligation

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Short Selling Explained

• Short selling provides investors with the ability
  to profit from the decline in a stock's price,
• Taking a stance that a stock will decline in
  value
• The short seller will sell stock that they do not
  own

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Short Selling Explained cont.

• The buyer cannot differentiate whether the seller
  is a short seller or a long seller
• Covering your short position
• Unlimited Loss potential

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Portfolio Evaluation

• After break we will start to have portfolio
  evaluations
• Online discussion questions
• Stock and Sector picks and tips
• One more meeting before winter break