Warren Buffett
Buffett advises us to be this when other investors are are greedy.
What is fearful?
This greek letter represents the performance of a portfolio in comparison to a benchmark such as the SP500 Index.
What is alpha?
This measure helps lenders evaluate how likely someone is to repay a loan and is used in determining the interest rate they will be offered.
What is a personal credit score? (What is a FICO Score?)
This investing style involves researching individual investments and constantly monitoring economic conditions to identify profitable opportunities.
What is active investing?
What are dividends?
According to Buffett, "________ is a protection against ignorance."
What is diversification?
This metric tells us the price the market will pay for $1.00 of earnings.
What is price earnings ratio? (What is PE ratio?)
Anyone who has started earning income can open this type of account, which offers investors the chance to make post-tax contributions in return for tax-free withdrawals after retirement
What is a Roth IRA?
This investment style involves identifying early stage entrepreneurs and helping increase their chances for success with seed money, expertise, strategy, etc.
What is venture capital?
The Federal Reserve controls which sphere of policy that involves setting the risk free rate?
What is monetary policy?
This firm took Buffett's $1,000,000 bet that they could beat the SP500 Index over 10 years... and failed.
What is Protégé Partners?
This can be calculated to measure the risk or price volatility of an asset
What is the standard deviation / variance of returns?
This type of financial statement tells you a company's revenues and expenses, and subsequently it's net profit or net loss, allowing you to determine its profitability.
What is an income statement?
JP Morgan Chase is an example of this type of firm which creates capital for other entities through both debt and equity, and deals with mergers and acquisitions.
What is an investment bank?
This type of financing involves selling a portion of a company's ownership in return for capital, and is higher risk than simply taking on debt
What is equity financing?
According to Buffett, investing with this can help reduce risk
What is a margin of safety?
This four-letter acronym is a measure of the profitability a company can achieve for every $1 of capital it controls
What is ROIC (return on invested capital)?
Besides the balance sheet and income statement, this is a third primary financial statement
What is a cash flow statement?
This investment style involves finding established but struggling businesses and buying them for outright or majority ownership and helping them become successful again.
What is Private Equity?
This theory argues that stock prices reflect all available information, making them fairly valued as they are presently.
What is the efficient market hypothesis?
Buffett's valuation for whether a stock is over or under-priced is the ratio between these two measures.
What is total stock market capitalization and GDP?
What are Earnings Per Share (EPS) and Price Earnings Ratio (PE Ratio)?
A balance sheet comprises of these three main sections
What are Assets, Liabilities, and Shareholders' Equity?
This investment style involves buying corporate and government bonds to guarantee a continuous stream of income
What is Fixed Income?
Under the random walk model, this component determines asset prices over a long period of time.
What is drift?