Global Growth Glossary of Important Terms

Bid/Ask Spreads
Buy Below Price
Equally Weighted
Going to Cash
Limit Orders
Liquid
PortfolioGrader Pro
Quantitative Formula
Stop-Loss

Bid/Ask Spreads: The “bid price” represents the highest price that somebody will pay for a stock at a particular point in time. The “ask price” is the lowest price at which someone is willing to sell a stock. To compensate for the risk they undertake, investors seek to buy shares at lower prices and sell at higher prices. The bid-ask spread is intended to compensate market makers for the risk they take in dealing with the stock and keeping the markets liquid.

Buy Below Price: A stock is a good buy as long as you can purchase it under my Buy Below price. If a stock moves above the weekly Buy Below price, or moves “out of range,” then do not buy the stock until I give you a new Buy Below price in the next Briefing. Never chase a stock. If you can’t buy it under the Buy Below price, simply wave goodbye to it.

Equally Weighted: Equally weight your stock purchases by dollar amount to get smoother, steadier returns. For example, if you have $200,000 to invest and there are 25 stocks on the Global Growth Buy List, you would invest $8,000 in each position. As some stocks appreciate ahead of others, feel free to “trim” your holdings and take some profits to return to a more equally weighted portfolio.

Going to Cash: I always recommend that you remain fully-invested in our Global Growth Buy List. There are phenomenal opportunities that you will miss if you have your cash on the sidelines.

Limit Orders: A limit order is an order to buy a stock at a specific price. It helps you avoid buying a stock at a higher price than you want.

Liquid: Liquid literally means easily convertible to cash. When I say that a market is “liquid,” I’m referring to the high number of buyers and sellers. The more activity occurring in the market, the better our stocks generally perform.

PortfolioGrader Pro: PortfolioGrader Pro is my online stock-rating database. The database contains nearly 5,000 publicly traded stocks and each are rated on their various fundamental and quantitative factors. Stocks are rated A (Strong Buy), B (Buy), C (Hold), D (Sell) or F (Strong Sell).

Quantitative Grade: My exclusive quantitative formula measures the institutional buying pressure supporting a stock and then determines the quantitative grade. Like individual investors, large institutional investors, such as corporations, cities or school systems, invest in stocks for income. These large institutional clients buy chunks of a stock, often worth millions of dollars. Typically, the more attractive a stock currently is to institutional investors, the better the stock will perform in the near term.

Stop-Loss: A stop-loss is an order you place with your stockbroker instructing him or her to sell your stock automatically if the share price falls to a certain price. For Global Growth, I do not recommend stop-losses because our stocks are inherently more volatile, and thus we would end up needlessly selling our quality stocks in temporary downturns.

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Global Growth Glossary of Important Terms