266 SubjectIndex
Random wal kmodel (Cont.):
trading rules and, 20–22
validity of, 24, 35
wea kform efficiency and, 23–25
Rate of return, 95
Ratio analysis, 119–132
current ratio, 121–122
debt-to-equity ratio, 123–124
inventory turns, 124–125
price/boo kratio, 147
price/earnings ratio, 95–96, 148–149
price/sales ratio, 147–148
profit margin, 95, 126–128
quic kratio, 122–123
receivable turns, 125–126
return on assets, 129–131
return on equity, 128
return on investment, 128–129
working capital, 120–121
Rebalancing, trader volatility and, 63, 64–
65, 66
Receivables turnover, 125–126
Research-and-development (R&D) expendi-
tures, 154–155
Reserve adjustments, 155, 158–159
Resistance, 118
Resource allocation, at Coca-Cola, 238–
239
Return:
capital asset pricing model and, 29–32
and modern portfolio theory, 28–29
Return on assets, 129–131
Return on equity, 128
Return on investment (ROI), 128–129
Revenue recognition, 155, 158
Revenues, matching expenses with, 93–94
Risk:
appetite for, 117
and modern portfolio theory, 28–29
ris kaversion, 27
risk-free rate of interest, 102, 141, 142
Rule of 72s, 101–102
Rumors, 27, 53–58, 82
Runs, 20
Sales per employee, 131
Salvage value, 99
Saving via stocks, 65–66
Scalping, 57
Scrap value, 99
Sector rotation, 5, 21–22
Sell-offs, 4
Semistrong-form efficiency, 23–25, 26
Shareholder primacy:
at Coca-Cola, 236
corporate governance and, 172–176, 180,
189–190, 194
Shareholder proposal rule, 202–204
Simplification philosophy, at General Elec-
tric, 225, 229
Six Sigma quality, at General Electric, 227–
228
Smoothing techniques, 153
Social responsibility, 176–179
Son-in-law standard, 193–195
Spamming, 55–56
Specialists, transaction volatility and, 59–63
Speculation, 5, 73, 79–80
market bubbles and, 8–10, 81–86
(See alsoDay trading)
Speed philosophy, at General Electric, 224,
227, 229
Stochastic systems, 37
Stoc kmutual funds, 74, 77
Stoc koptions, 208–212, 216–217
Stoc krepurchases, 52, 216–217
Stoc ksplits, 217
Stretch philosophy, at General Electric, 224–
225, 227, 229
Strong-form efficiency, 23–25
Succession, 201, 206–207
Superiority, 117, 118
Synergy meetings, at Disney, 230–231
Systematic risk, 29Takeovers, 178–180, 184–186, 214–215
Taxes:
impact on investments, 102–103
interest deductions on debt, 8
on mutual funds versus individual
stocks, 74
Three-body problem, 37
360 degree management appraisal, 226
Ticks:
market price, 5
Q fever and, 4–5
Time-series data, 19–20, 38–43, 45
Time value of money, 99, 100–102
Tips, 27
Trader volatility, 63–66
day trading and, 63–64, 66
rebalancing and, 63, 64–65, 66
saving via stocks and, 65–66
Trading rules, 20–22