Glossary

G

Gain:  An increase in value of an asset. This can include: stocks, properties, commodities, or bond.

Our take: Capital Gain tax needs to be paid once the gain is realized.

Gambling Income: Income that is earned through gambling activity.

Gambling Loss: Money that is lost from gambling activity such as wagering in horse racing, boxing, or playing slot machines, lottery and card.

Gazelle Company: Company that grows rapidly with annual revenue growth in excess of 20%.

GDP Price Deflator: An economic metric to measure GDP growth by using constant-dollar GDP.

General Ledger: Contains all the company's accounting records and statements.

General Motor Indicator: An economic theory stating that the performance of General Motor is an indication of future US economic performance.

Generally Accepted Accounting Principle (GAAP): The common set of rules, regulations and standards on how to compile a financial statement.

Our take: Spouses can give gift separately and can double the value of a gift they can give without incurring tax.

Our take: A risk-free bond issued by the US Government is called Treasury. Gilt has its name due to the gilded edges the Bond Certificate has.

Godfather Offer: A generous offer from an acquiring companies that is hard to refuse.

Going Concern: A company that has the resources to continue to operate.

Going Public: The process of selling a company's shares to the general public for the first time.

Our take: After a company goes public, it is required by the SEC to report its financial condition.

Gold Certificate: A certificate obtained as a result of buying gold. This certificate is given instead of carrying the gold bullion home.       

Our take:  Gold certificate allows investor to trade in and out of gold without the hassle of bringing the gold bullion.

Our take: London Gold Pools set the price of gold based on economic supply and demand.

Gold Standard: Currencies that are valued based on the amount of gold the central bank holds.

Our take: Industrialized nations have abandoned gold standard. The US abandoned it in 1971 while the British left the gold standard much earlier in 1931.

Golden Parachute: Lucrative payments given to company's executives should the company be acquired.

Our take: Golden Parachute gives current company's executives income in the event they loss their jobs due to a takeover. This will discourage potential acquirers.

Good Till Cancelled (GTC): A trade order that will not be cancelled unless stated otherwise by the account holder.

Our take: For example, an investor bought a particular stock at $20 and he plans to sell it at $30. He then can use a GTC sell order at $ 30. The stock will be sold when it reaches $30 unless specified otherwise by the investor. .

Good This Month (GTM): A limit order placed with the broker that will expire at the end of the month.

Our take: If the order is not executed at the end of the month, then the limit order will expire.

Goodwill: The premium given to an asset with respect to its fair market value.

Our take: If a building is worth $ 1 M in the market and an acquirer is buying it for $ 1.5 M, then the goodwill for this transaction is $ 0.5 M.

Gorilla: A company having a superior influence on an industry

Our take: Examples of Gorilla include: Intel in the PC industry and Microsoft in the software industry.

Government Security: Debt that is issued by a government.

Our take: It is backed by the taxing power of the country with little risk.

Greater Fool Theory: Buying an overvalued stock in the hope that someone else would be buying it at a higher price.

Our take: Buyers make the purchase not because of the quality of the investment but because they hope somebody else will buy later. Eventually, the buyer will run out and the bubble will burst.

Greenback: Refers to the US Dollar currency.

Our take: The nickname is derived from the color of the US dollar bills at the time.

Greenshoe Option: An option to sell additional shares to the public if the IPO (Initial Public Offering) is in great demand.

Our take: The name is invented because greenshoe company is the first entity to do so.

Grey Market: A market where the product is obtained outside the manufacturer's distribution channel.

Our take: An unauthorized dealer is an example of a seller in a grey market.

Gross Domestic Product (GDP): The monetary value of all goods and services produced at a given country in a particular year.

Our take: GDP is the best measurement of the health of an economy. US GDP data are normally published quarterly, though monthly figure is still available.

Gross Income: The dollar amount of income of an individual before taking into accounts taxes and deductions.

Our take: For companies, it is how much they make before subtracting taxes and fixed cost. In other word, how much is their gross profit.

Gross Sales: A measure of sales that exclude customer's returns, discounts and all operating expenses.

Our take: In the income statement, gross sales is normally on the first line. It simply referred to as 'Sales'

Growth Company: A company that can grow sales rapidly in the past and is expected to continue its growth for the foreseeable future.

Our take: A lot of times, the growth has already been priced in the company's stock price. The stock has already traded at fair value and it is difficult for investors to profit from growth company unless the growth ahead is even better than expected.

Growth Industry: An industry where the market for its products has a higher-than-average growth.

Our take: Even a struggling company in growth industry will show a solid results on its performance. 

Growth Investing: An Investing method where investors invest in a company with a higher-than-average growth rate.

Our take: On the other side of the equation is value investing.

Growth Rate: The compounded average annual growth for a company's sales, earnings or dividends.

Our take: High sales growth rate should also results in high earning growth rate if everything else remains equal.

Growth Stock: A company which is expected to post a higher-than-average profit growth.

Our take: A growth stock seldoms pay dividend because cash flow from operation is normally re-invested back into the main line of business.

Guarantor: A person who guarantees to pay the debt incurred by another individual.

Our take: Individual who needs guarantor is normally the one with poor credit. 

Guidance: Earning or Sales estimate provided by the company's management to the investing public.

Our take: The company's guidance will have an effect on the analyst's buy sell rating. This is because an analyst rating has a certain assumption built in it. When guidance changes, so are the assumptions used.

GunSlinger: A mutual fund manager who invests in extremely high-risk stocks in order to pursue high return.

Our take: When they are unlucky, they will make you a lot of money. More often than not, gunslingers took incredible risks and as a result, they deliver disappointing results.

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