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Date: Tuesday 13th 2008f May 2008 09:11:41 AM

Glossary
 

W
 

WACC Weighted Average Cost of Capital :  A calculation of average cost of capital for a firm

Our take: WACC is calculated by adding the cost of capital of various funding sources such as: cost of debt and cost of equity.

 

WTI: Stands for West Texas Intermediate, a common indicator for oil futures and contracts. WTI oil contract is traded in the New York Merchantile Exchange.

Our take: WTI oil is considered a sweet crude because it contains low sulphur content (0.24%). Oil with higher sulfur content will trade at a lower price than WTI.
 

Wall of Worry: A phrase used to describe a bull market that keeps on climbing, despite the negative uncertainties.
Our take: The market will always have some negative uncertainties no matter what kind of market we are in.
 

Wallpaper: A term describing to certificate of securities that has become worthless
Our take: A security is traded at such a low price (worthless) that you can practically cover your entire wall with these certificates.
 
War Bond: Debt securities issued by the government to finance the war
Our take: The spirit of patriotism may keep the interest rate of this bond lower than the market would have.
 
War Chest: The cash on a firm's balance sheet that can be used to endure hard economic times or acquisition if needs to.
Our take: War Chest can be built by selling off assets, issuing debt or running a profitable operation.
 
Warrant: An investment derivative that enables investor to buy a specific share of a company within a specific price and a certain time frame. .
Our take: Warrant is similar to call option but the difference lies in the issuer. Warrant is issued and guaranteed by the company. Further, the lifetime of a warrant can be measured in years. 
 
Warrant Premium: The premium paid for the right associated to own the warrant..
Our take: As with other derivatives, the value of a warrant can sometimes jump up in anticipation of higher economic value associated with owning the warrant.
 
Warren Buffet: The second richest man that made its fame by investing in stocks of public companies. Its investment vehicle is Berkshire Hathaway which invests in value stocks. 
Our take: This in essence makes Warren Buffet a value investor. His major holding is always a company with predictable cash flow and wide moat, which he would have held for decades if the business strength continues.
 
Wash Sales: Transaction where investors buy shares A at one broker while selling shares A at another.
Our take: Wash Sales is illegal and in many cases, investors try to claim the tax loss by selling shares A while not foregoing the probability of A going up. Recent rules has forbid investors to file for a tax loss of a specific position if he buys back the stock within 30 days of selling.
 
Weak Longs: Refer to a type of investors that hold a stock, and are quick to exit their positions in the first sign of weakness..
Our take: When the weak long had been shaken off, the stock can resume its uptrend as the selling pressures has subsided.
 
Weak Shorts: Opposite of weak long, weak short is  a collection of investors that hold a short position on a stock and will exit the position in the first sign of strength.
Our take: -
 
Weather Derivative: An investment tool that is used to protect investors from weather-related causes. 
Our take: Weather derivative is not the same as insurance as such weather derivative covered a more specific type of weather related such as a dryer than normal day as opposed to hurricane or storm.
 
Whipsaw: A condition when a security moves in one direction followed by a move in opposite direction quickly.
Our take: When stock price show whipsaw movement, volatility is said to be running high.
 
Whisper Number: The expected EPS number of a firm that is circulating among Wall Street professionals. It is not an official guidance from the company.
Our take: Many times, a firm beats its own guidance but disappoint on the whisper number, which may result in the stock price dropping despite announcing a good quarterly figure.
 
Whisper Stock: A stock that is rumored to be acquired or taken over
Our take: As this is an unofficial rumor, some of the whisper stock may be acquired, some may not. Just be careful when you invest based on whisper stock.
 
Whistle Blower: An individual who discovered an unethical behavior within the firm and report it to the public..
Our take: Becoming a Whistle Blower is a risky proposition as you are essentially reporting your boss' behavior. Your job may be on the line.
 
White Collar: A working class earning high salary and not doing manual labor.
Our take: White Collar workers may work long hours and stressed job due to the more management nature of the job
 
White Knight: A company that makes a friendly take over to the smaller company
Our take: This phrase is akin to the phrase Knight in Shining Armor
 
Wholesale Banking: Banking service performed between one financial institution with another institution
Our take: This is akin to business to business banking
 
Wholly Owned Subsidiaries: A subsidiary whose parent company owned 100% of the common stock
Our take: This means that there are no other shareholders that the parent company ought to be concerned about
 
Window Dressing: The strategy to buy up shares of our exiting portfolio in the open market with purpose of improving the appearance of the portfolio performance.
Our take: As a result of window dressing, securities that do well during the quarter or the year, will get bought and securities that do poorly will be dumped.
 
Wire Transfer: An electronic transfer of funds across network of hundreds of bank around the world
Our take: Wire Transfer makes money more mobile. It enables investors to shift their portfolio around the world without having to be physically present.
 
Withdrawal: Removing your fund from a particular account.
Our take: Withdrawal can done on your savings account, brokerage account or mutual fund account.
 
Withholding: Tax that is kept by tax authorities before the tax payers even receive the fund.
Our take: Withholding tax may include taxes on dividend payment of a common stock.
 
Work In Progress (WIP): Work that is in progress and has already incurred capital investment from the company
Our take: WIP is recorded as an asset on the balance sheet
 
Working Capital: Defined as current assets - current liabilities
Our take: Working Capital is interpreted as the abilities to pay for short term obligations.
 
Working Capital Turnover: Defined as Sales divided by Working Capital
Our take: Higher figure means that the company needs little working capital to generate the same number of sales. This is viewed as positive
 
Write Down: Reducing the asset value in the balance sheet that is deemed overvalued
Our take: Write Down will be viewed as an expense and therefore, reduce net income
 
Write Down Value: The net value of an asset, after accounting for depreciation and amortization
Our take: For conservative accounting, book value is written down as they become overvalued.
 
 
 
 
 
 
 
 
 

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