Investing basics
Where an account begins: the broker, the depository, the first trade, and what separates investing from speculation.
20 articles
Window dressing: why funds buy the winners ahead of the reporting dateWindow dressing is when a fund manager reshuffles the portfolio ahead of the reporting date so that the report looks better than the actual decisions made during the period.6 min
Revenue and profit: the path money takes from the customer to the shareholderRevenue is everything a company has earned from selling goods and services over a period, before any expenses are deducted.5 min
Real Estate Vacancy: Why Occupied Space Is Not the Same as Paid-For SpaceThe vacancy rate is the share of a property's or an entire market's lettable area that is not leased as of the calculation date.8 min
Swaption: the right to enter an interest rate swap at the strike rate, and how to value itA swaption is an option on an interest rate swap.7 min
Buffered structured note: where the protection ends and your loss beginsA buffered structured note is a debt security whose return is linked to an underlying asset: an index, a share or a basket of securities.8 min
Mean Absolute Deviation: Dispersion Measured in Absolute Terms, Not SquaresMean absolute deviation is the average distance between observations and their arithmetic mean, with each distance taken as an absolute value.7 min
Maintenance capex: what a business pays simply to avoid shrinkingMaintenance capital expenditure is the money a company spends on replacing worn-out equipment, repairing networks, upgrading servers and everything else without which its existing capacity would start to drop out of service.7 min
Abandoned baby: a reversal that rests on the gaps around a dojiThe abandoned baby is a candlestick reversal pattern in which a doji is cut off from the rest of the chart by gaps on both its left and its right.7 min
Accrued Expenses and Accounts Payable: Debt Before the Invoice and Debt on the InvoiceAccrued expenses and accounts payable are a company's obligations for what it has already received but has not yet paid for.6 min
Residual income model: book equity plus earnings above the cost of capitalThe residual income model values a share as the book value of equity plus the present value of future residual income.8 min
Custodial vs non-custodial wallets: whoever holds the key owns the coinsThere is only one difference, and everything else follows from it: who holds the private key.5 min
Cash Basis vs Accrual Basis: When a Transaction Becomes RevenueThe cash method recognises income at the moment money arrives in the account, and an expense when it leaves.5 min
Absorption costing: how overheads sit in inventory and shift reported profitAbsorption costing (full costing) is a method of calculating production cost in which products are charged not only with raw materials, direct labour and variable costs, but also with a share of fixed production overheads.7 min
Changes in accounting estimates: why profit moves without new transactionsA change in an accounting estimate is a revision of the judgement behind a figure in the financial statements: the useful life of equipment, the probability that a customer will not pay, the size of future warranty costs.5 min
IBAN: why a Russian account doesn't have one and what to give a foreign brokerIBAN is the international bank account number.7 min
FATCA: why a Russian broker asks about your US tax statusFATCA (Foreign Account Tax Compliance Act) is a US law that requires banks and brokers outside the United States to identify US taxpayers among their clients and report their accounts to the US tax authority, the Internal Revenue Service (IRS).6 min
Twin deficits: when a country's savings cannot cover both the budget and investmentTwin deficits describe a situation in which the government spends more than it collects and, at the same time, the country pays the rest of the world more than it receives: the budget is in deficit, and so is the current account of the balance of payments.7 min
Current account deficit: who pays when a country spends more than it earnsA current account deficit means that over a given period a country paid out more to the rest of the world than it received from it.7 min
Accounts Receivable Ageing Analysis: Where Revenue Stops Turning into CashAccounts receivable ageing analysis sorts customer debts by how old they are: what is still within the contractual payment terms, what is a few weeks overdue, and what has been outstanding for months.5 min
How Lease Accounting Turns Rent into Debt and Lifts EBITDA9 min