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Investing

A Glossary Of Investing Terms

Here’s a glossary of acronyms used by investors. I’ll add to the list as I go, and explain each term in more depth later on. In the meantime this should give you enough to go on, so you can do a proper Google search on the term.

  • 10 Bagger – This is a term coined by famous fund manager Peter Lynch, and finds it’s roots in the game of marbles, in which a 10 bagger was a marble that had won 10 games (hence had been put back in the bag of marbles 10 times, and not lost as ante to the opponent. In investing terms, a 10 bagger is a stock that has increased in value by a multiple of 10.
  • ARR – Annual Recurring Revenue. This is company revenue derived from a repeating source. Typically a subscription from customers which is renewed at regular intervals.
  • ATH – All Time High: the highest price a stock has ever reached.
  • Black Swan – An unexpected thing or event that causes misfortune, such as COVID19, which caused an economic crash.
  • CAGR – Compound Annual Growth Rate.
  • Capitalized Cost – Instead of recording the total value of a purchased asset, the cost of it’s amortized value is recorded over a period of years instead.
  • CARR – Contracted Annual Recurring Revenue. This is company revenue derived from a repeating (contracted) source. Typically a subscription from customers contracted over X years.
  • COGS – Cost Of Goods Sold.
  • CR – Capital Raise.
  • DCA – Dollar Cost Averaging. Buying more shares at a different value to have an average cost per share instead of an absolute cost.
  • DCF – Discounted Cash Flow. A method used to value a business.
  • DPS – Dividend Per Share.
  • DRP – Dividend Reinvestment Plan.
  • Earnings Accreditive – An overall increase in profit, typically from an event or transaction (such as the purchase of a new business unit).
  • EBIT – Earnings Before Interest and Tax.
  • EBITDA – Earnings Before Interest, Tax, Depreciation and Amortization.
  • EPS – Earnings Per Share.
  • ETF – Exchange Traded Fund.
  • EV – Enterprise Value.
  • FMCG – Fast Moving Consumer Goods.
  • Helicopter Money – The idea of throwing money out of a helicopter (not literally) to stimulate an economy by increasing capacity for demand.
  • NPAT – Net Profit After Tax.
  • NPV – Net Present Value.
  • NTA – Net Tangible Assets.
  • PE – Price to Earnings ratio.
  • PEG – Price to Earnings Growth ratio.
  • PCP – Prior Comparable Period.
  • PIE – Portfolio Investment Entity.
  • QE – Quantitative Easing.
  • ROCE – Return On Capital Employed.
  • ROI – Return On Investment.
  • SP – Share Price.
  • SPP – Share Purchase Plan.
  • WACC – Weighted Average Cost of Capital.

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