Stocks:

Common stocks: normal stock

Preferred stocks: preferred stock generally has a dividend that must be paid out before dividends to
common stockholders and the shares usually do not have voting rights.
- Disadvantage if company earnings grow exponentially because they have a fixed dividend rate
- Different features of preferred stocks:
1. Non-participating vs participating: Participating preferred stock allows for dividends greater
than the stated dividend. Non-participating preferred stockholders only receive their stated
dividends and nothing more.
2. Cumulative vs noncumulative: If a preferred stock is designated as cumulative, its holders must
receive any past dividends that had been omitted on the preferred stock and its current year
dividend, before common stockholders are paid any dividends. If a preferred stock is
noncumulative, its dividends will not be in arrears if a corporation omits dividends.
3. Callable: Assuming the market rates decline and the company wants to pay less dividend, they
can call in (retire) the preferred stock to introduce a new one with lower dividend. The call
price and it might be 110% of the par amount (par plus one year's dividend).
4. Convertible: can be converted into a stated number of common stock.

Authorized shares: total shares a company can issue given when they become incorporated
Issued shares: shares held by investors and shares rebought by the company
Outstanding shares: shares held by investors
Treasury shares: shares reacquired by the company that havent been retired
- Retired shares are permanently removed and decrease the authorized shares
- Companies buy back shares to drive the price of the stock back up (less stock out there -> more
demand).

Private placements: companies can issue private placements to raise capital. They sell shares at a fixed
price (lower than current stock price) and usually give warrants (options to buy the stock at a fixed price
in a few years).

Fully diluted shares: it is the total number of shares that would be outstanding if all possible sources of
conversion, such as convertible bonds and stock options (options to the directors and executives in the
company), were exercised.

SEC forms:
10Q: quarter report
10K: annual report
13D: they are filed with the SEC within 10 days of an entity's attaining a greater than 5% position in any
class of a company's securities. Subsequent changes in holdings or intentions must be reported in
amended filings.
Net-net stocks: those that sell below net working capital (working capital less all liabilities), essentially
buying the company for less than the value of the minerals in its corporate body.
In tech industry, it can be a stock trading at less than its net cash. You can find it only once in a
blue moon, and when you do, you can be sure that the stock is suffering from an extreme
aversion by its shareholders due to past management screw-ups, overoptimistic analysts who
have now turned super pessimistic, and, most likely, a cash bleed that looks as if it may soon
drain the company and lead it to bankruptcy

If looking to short stocks: search for any combination of words that indicates a brewing disaster or a
problem. Such word combinations could include Management denies that, left (resigned) for health
reasons, left to pursue other interests, lowered guidance to, reiterated that the rumours have
no basis, filed a lawsuit against short sellers, VP of sales/marketing left for personal reasons,
company hired a new VP of sales, management took issue with the analysts conclusion. These
word combinations indicate an insufficiency of sales not yet announced, messed-up financial statements
not yet admitted, or otherwise show management is sticking its metaphorical finger in the corporate
dike to prevent damaging information from leaking out. The limit to what you search for is bounded only
by your imagination.
You can either Google terms online, or if you or your broker has access to a Bloomberg terminal
or news service

If looking for long trades: screen for words that indicate that a perceived disaster is not as severe as
others think. Such word combinations might include debt reduction surpassed, cash grew faster
than..., settled a lawsuit, sold the plant/real estate/division,or any such statements that in your
past sleuthing proved significant. These are signs of subtle improvements (signs of deploying capital
more profitably).

BACKGROUND ON COMPANIES: Directors biographies: Reuters website