GAFM GLOBAL ACADEMY OF FINANCE AND MANAGEMENT  ®

16.  Convertible Issues and Warrants  

A convertible issue is a financial instrument which can be converted into the common shares of its issuing entity at a contractually determined. time and price. Examples of convertible issues may include: convertible preferred shares, convertible bonds, debentures, stock warrants & stock rights.  

17.  Four Extremely Instructive Case Histories and more

Penn Central – Lesson: Fundamental Financial Analysis is always the 1st step.

Ling Temco – Lesson: Rapid Growth is good but can sometimes be a read flag related to maintaining momentum: debt, human capital, sales etc.

NVF Takeover – Lesson: Be careful of numbers that are too good to be true. Example: Some banks have recently gone bankrupt from cooking the books with tax credits. 

AAA Enterprises – Lesson: Speculation and herd mentality can be very dangerous. Everyone knows somebody who bought at the top or bough a mutual fund that did 100% last year, only to collapse a year later. 

18.  A Comparison of Companies

Graham’s chapter analyzes 16 companies that most don’t remember. It briefly examines the relative valuation of pairs of companies: Today, there is more focus on institutional buying, new products, innovation, human capital, and global sales.