Best countries for junior gold explorers
Since most countries accurately report mine output, and several agencies catalog this information, we know where in the world gold is being produced. But where in the world are the juniors exploring for gold? Are they spinning their drills proportionate in geography to where the miners are operating? I hear questions like this all the…
How do you tell whether a share is undervalued or overvalued?
Typically when we refer to value in the stock market we’re talking about the value of the underlying company. This is different to terms like ‘overbought’ or ‘oversold’ which we often hear in technical analysis focusing purely on price movement. Today we’ll be focussing on the fundamental value of a company. PE Ratio…
What is the loan to value ratio of a share?
Question: What is the loan to value ratio of a share, and how does this change as the share price changes? Response: A loan to value ratio or Lending Value Ratio (LVR) is a percentage measurement of the amount that can be borrowed against a share or a managed fund, using a margin loan. For…
Who Picked the Top Stocks? Stock Pickers’ Showdown
Twelve months ago we asked four stock pickers to select a portfolio of 10 stocks to hold for one year. At the time the sharemarket was languishing at 3353 points – so with the market awash with value, each stock picker had ample opportunity to find the low-hanging fruit that would help deliver strong returns….
How to make extra income on your shares
Question: They tell me that I can earn extra income from dividends when buying warrants rather than shares, how does this work? Answer: Instalment warrants gives holders the ability to gain exposure to price movements in underlying shares by making an initial payment and an optional second payment on expiry. There are a number of…
Are You Investing Or Gambling?
Merriam-Webster dictionary defines gambling as: 1. a: to play a game for money or property b: to bet on an uncertain outcome 2. to stake something on a contingency : take a chance. When trading is looked at, gambling takes on a much more complex dynamic than what is presented in the definition. Many traders…
Protect your portfolio from market wobbles
Trading derivatives can conjure up images of overnight wealth or wealth destruction. A reason is leverage, where speculating on an asset class can quickly magnify profits and losses for a small up-front outlay. Contracts for difference, a popular financial instrument among speculators, are also an effective weapon in preserving wealth when acting as a hedge….
What happens if I hold a put option on a stock that’s suspended from trade?
Question: If I hold a put options contract on a stock that is suspended from trade on the ASX, and is subsequently wound up, do I receive any return? Response: The buyer of a put option has the right to sell the underlying stock at a particular price on or before a specified date. A…
Why is return on equity such an important measure for a company?
Why is return on equity such an important measure for a company? How does a good ROE help prove that the company is performing well? Response: One of the most important profitability metrics is Return on Equity, or ROE for short. ROE reveals how much profit a company earned in comparison to the total amount…
What happens to a CFD short position during a capital rising like a rights issue or placement?
We will use a hypothetical example to illustrate. Ronnie undertook research on the Australian market and following his research he took a negative view of XYZ Department Stores Ltd. He believed the future for XYZ was quite bleak because their buildings were run down, staff were currently striking due to a pay dispute, and to…
