The plowback ratio is the percentage of earnings reinvested into the firm.  In other words, it is the amount of earnings the firm retains after it has issued dividends.

The size of the plowback ratio is important as the more money a firm retains the more growth a firm can sustain.  A new start-up company will (or should) have a higher plowback ratio as it is seeking to grow.  However, a company that is mature and a “cash cow” will have a lower plowback ratio as it has already passed its stages of large growth.

A new start-up company has many opportunities for new investments and with a solid business model those investments can have high returns.  On the other hand, a mature company will have less investment opportunities with high returns as it has already reached most of its potential.  For a mature company it is often a better idea to payout its earnings to investors so they can invest those earnings in investments with higher returns.

The plowback ratio is simply the inverse of the payout ratio (the percentage of earnings paid out to investors).

Plowback ratio = (earnings - payout)/earnings

The plowback ratio can be used to find the growth rate of a company (which is used in the dividend capitalization model) by multiplying it against the return on equity.

Exotic currency is currency that is not well established and used in the world.  Exotic currency is called that because it is unusual in the trading market, it is difficult to exchange due to its low demand which is due to its higher than average volatility and risk.  Examples of exotics currency are the Iraqi Dinari, Ethiopian Birr, Korean Won, Turkish Lira, Brazilian Cruzeiro and others.  These are expensive to trade due to their illiquidty, which ups their bid-ask spread, and risky because these countries’ economic future is usually very uncertain.

I am sure most of you have asked the question, “When do I buy stocks?”  There is no easy answer, but a good set of rules is as follows:

1. Buy stocks that are $10 or more
2. Do not be afraid to buy stocks with new highs
3. Buy on pull back days on a monster stock
4. Buy when above 50-day moving average

There are more rules than these, but this is a good set of foundations to help you look at why you are buying and when to buy. Make sure your buy is not emotional, make it factual and based on rules you set before you go into buying stocks. A major issue is people do not make rules and stick to them. You must be disciplened when working with the stock market.

Sell side are the retail brokers and research departments that sell securities and make recommendations for brokerage firms’ customers.

Don’t expect a lot creativity here, when it comes to investment ideas, these guys are usually with the pack.

A condition that triggers an investor to make a trade or take a specific action, either a purchase or a sale.

This could be anything, say a stock went to a certain price, or the CEO began to buy shares in the company, whatever it may be this is when the investor chooses to get in or get out of the investment.

I believe this is also the same as a cell trigger, but I am not for sure on that, can anyone enlighten me?