Dividend imputation
Before 1 July 1987 corporate profits were subject to two lots of tax. Firstly, companies paid company tax on their earnings. Only the “after tax” earnings were then available for dividend declarations. Secondly, individual shareholders paid personal income tax on any dividends received by them, despite the fact that the companies paying them had already…
Efficient Market Hypothesis
For some share enthusiasts, the EMH is not a nice thought. The theory argues that careful share selection based on myriad factors, including analysing company financials, reading news and analyst opinions or charting historical share prices is pointless. The concept of analysing whether a company is under-or over-valued relative to its current market price is…
Inflation
Inflation is the true enemy of building wealth and investors should put measures in place to protect against inflation’s corrosive downside. “Inflation” can be defined as “the state of affairs when the value of money falls and the prices of goods and services increase, other things being equal”. Interest rates move up and down from…
Net Tangible Assets (NTA)
The “net tangible asset backing per ordinary share” figure, often abbreviated “NTA”, is one possible measure of the worth of a share, although its usefulness is subject to some reservations. It can be compared to the market value of the share. In an ongoing company the various measures related to income tend to be more…
The Scoreboard – Winning and Losing Stocks for 2008
The biggest dog in 2008 went to none other than beleaguered investment bank Babcock & Brown – its shares tanking by 99.4% to the year ending 17 December 2008. Anyone with $10,000 parked with the investment house in December last year, has less than the cost of a tank of petrol to show for it…
Winners of our Gold Giveaway
More than 22,000 investors and traders went into the draw to win the CompareShares gold giveaway – signing up to the CompareShares newsletter, the FatCat newsletter, or to the new social networking site MoneyConfessions. While investors can gain gold exposure via listed funds (one is aptly named GOLD and lists on the Australian Stock Exchange);…
Earnings
While it may seem like an obvious answer, the most important number in a company’s financial statements and the major reason why share prices go up is the company’s earnings. However many investors get confused as to what exactly “earnings” is and whether earnings relates to a company’s revenue or its profit. Company analysts at…
Top 5 technical indicators to trade commodities
What are the most popular technical indicators used to trade commodities over the short term (1-3 months), and do they differ depending upon the commodity traded? Response: The technical analyst will use a number of methods when reviewing commodity markets. These methods typically include such things as Price Action (pattern recognition, candle stick charts, Elliott…
The impact of commodities prices on mining companies
I have been reading that iron ore and coal export prices are due to be negotiated in the near future? Can you tell me how the process works and where I can find the results of the negotiations and final pricing outcome? Also what short term impact does this have on mining company’s share price?…
What factors determine how much we pay for petrol at the pump?
Petroleum pricing has become a factor of concern to consumers, refiners and producers across the world, and price determination has come under the microscope, especially as crude oil prices were reaching record highs earlier in 2008 and prices at the bowser were sky-rocketing. There is a lot of discussion surrounding petroleum pricing, and the primary…
