Financial Glossary

Quarterly report that institutional investors with over $100M must file with the SEC, disclosing their equity holdings.

EBITDA modified to exclude one-time or non-recurring items, giving a cleaner picture of a company's ongoing operating profitability.

The excess return of an investment above a benchmark index, representing the value added by active management or stock selection.

A period when a major stock index falls 20% or more from its recent peak, typically accompanied by widespread pessimism.

A measure of a stock's volatility relative to the overall market, where 1.0 means the stock moves in line with the market.

Shares of a large, well-established, financially stable company with a long track record of reliable performance.

A fixed-income debt instrument where an investor loans money to a borrower (government or corporation) in exchange for regular interest payments and return of principal.

The net asset value of a company as recorded on its balance sheet — total assets minus total liabilities.

A prolonged period of rising stock prices, typically defined as a 20% or more rise from recent lows, fueled by optimism and strong economic fundamentals.

Compound Annual Growth Rate — the steady annual growth rate that would take an investment from its beginning value to its ending value over a given period.

The profit earned when you sell an asset for more than you paid for it.

Earning returns not just on your original investment, but also on all previously accumulated gains — making wealth grow exponentially over time.

A valuation method that estimates the intrinsic value of a company by projecting its future cash flows and discounting them back to today's dollars.

A portion of a company's earnings paid out to shareholders, usually quarterly, as a reward for holding the stock.

The annual dividend payment expressed as a percentage of the current stock price — showing how much income you earn relative to what you pay.

Investing a fixed amount of money at regular intervals regardless of market price, which reduces the impact of volatility over time.

A company's net profit divided by its number of outstanding shares — the most widely used measure of profitability on a per-share basis.

Earnings Before Interest, Taxes, Depreciation, and Amortization — a proxy for operating cash profitability that strips out financing and accounting choices.

The total value of a company — market cap plus net debt — representing what it would cost to buy the entire business outright.

A basket of securities — stocks, bonds, or commodities — that trades on an exchange like a single stock, offering instant diversification at low cost.

A valuation multiple comparing a company's total value (enterprise value) to its operating earnings — used to compare companies independent of capital structure.

The estimated intrinsic price of a stock based on fundamentals — what the business is actually worth, separate from its current market price.

A composite sentiment indicator measuring market emotions on a 0–100 scale, where 0 is Extreme Fear and 100 is Extreme Greed.

The cash a company generates after spending on capital expenditures needed to maintain or expand the business — the truest measure of financial health.

Evaluating a company's intrinsic value by studying its financial statements, business model, competitive position, and economic environment.

The percentage of revenue remaining after subtracting the direct costs of producing goods or services — a key measure of pricing power and business efficiency.

A private, actively managed investment partnership that uses advanced strategies — including leverage, short-selling, and derivatives — to generate returns regardless of market direction.

A passive investment fund that tracks a market index like the S&P 500, owning all (or most) of its components to match the index's performance at minimal cost.

The rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of money.

A large organization — pension fund, endowment, mutual fund, or hedge fund — that invests on behalf of many individuals and manages billions in assets.

The true underlying worth of a company based on its fundamentals — independent of its current market price or investor sentiment.

The first time a private company sells its shares to the public on a stock exchange, allowing it to raise capital and giving investors the ability to buy in.

Using borrowed money to amplify investment returns — increasing both potential gains and potential losses.

How quickly and easily an asset can be bought or sold without significantly affecting its price.

Buying a stock at a significant discount to its estimated intrinsic value — creating a buffer against errors in analysis and unforeseen risks.

The total market value of a company's outstanding shares — calculated as share price multiplied by total shares outstanding.

A decline of 10% to 19.9% in a stock index or individual stock from a recent peak — painful but historically a normal and healthy part of markets.

A sudden and severe drop in stock market prices — typically 20% or more in a very short period — driven by panic selling and loss of investor confidence.

The tendency of stocks that have recently performed well to continue outperforming, and stocks that have underperformed to continue lagging.

The average price of a security over a specific number of past periods, updated continuously to show trend direction while smoothing out short-term noise.

A company's total profit after all expenses — including cost of goods sold, operating expenses, interest, and taxes — have been subtracted from revenue.

The percentage of revenue that remains as profit after paying all operating costs but before interest and taxes — a key measure of core business profitability.

Financial contracts giving the buyer the right — but not the obligation — to buy or sell a stock at a specified price before a specific date.

Price-to-Earnings ratio — a stock's current price divided by its earnings per share, showing how much investors pay for each dollar of profit.

The collection of all investments held by an individual or institution — stocks, bonds, ETFs, cash, and other assets combined into one overall picture.

A valuation ratio comparing a company's market cap to its annual revenue, useful for companies with negative earnings or in early growth stages.

A central bank policy where the bank buys government bonds or other assets to inject money into the economy and lower long-term interest rates.

A significant, widespread, prolonged decline in economic activity — commonly defined as two consecutive quarters of negative GDP growth.

A momentum oscillator measuring the speed and magnitude of recent price changes, scaled from 0 to 100, to identify overbought or oversold conditions.

The U.S. federal agency responsible for regulating securities markets, enforcing securities laws, and requiring companies to disclose financial information.

Borrowing shares and selling them with the expectation the price will fall, allowing you to buy them back cheaper and pocket the difference.

Investments made by institutional investors, hedge funds, and legendary investors who are presumed to have superior information, resources, and analytical capabilities.

When a company uses its own cash to repurchase its shares from the open market, reducing shares outstanding and increasing earnings per share.

A corporate action that divides existing shares into multiple new shares, reducing the price per share proportionally while keeping total market cap unchanged.

Price levels where a stock historically struggles to fall below (support) or break above (resistance), reflecting concentrated buying or selling pressure.

Evaluating stocks and markets by studying historical price patterns, trading volume, and statistical indicators rather than underlying business fundamentals.

In a DCF model, the estimated value of a company's cash flows beyond the explicit forecast period — typically representing the majority of total calculated value.

The complete gain or loss on an investment including both price appreciation and dividends (or other income distributions), expressed as a percentage.

The total number of shares (or contracts) traded for a security during a given period — a key indicator of market interest and the strength behind a price move.

An investment strategy focused on buying stocks that trade at a discount to their intrinsic value, based on the belief that markets are occasionally irrational.

A stock that appears cheap based on valuation metrics like P/E or P/B, but where the business is genuinely in permanent decline — making it a losing investment despite the low price.

The degree of variation in a security's price over time — high volatility means large, frequent price swings; low volatility means stable, steady price movement.

The average rate a company must earn on its assets to satisfy both debt holders and equity investors — used as the discount rate in DCF valuations.

The income generated by an investment expressed as a percentage of its price — most commonly applied to bonds (bond yield) and dividend-paying stocks (dividend yield).