Jargon Glossary
A
- Ask Price
- The lowest price a seller will accept for a share.
- Heard in Ep 7: Trading Volume, Bid/Ask Spread & Liquidity Explained
B
- Bear Market
- A market where prices fall 20% or more from recent highs.
- Heard in Ep 2: Bull vs Bear Markets, Market Cap & Volatility Explained for South African Investors
- Beta
- Measures a stock’s volatility compared to the market. Beta > 1 = more volatile.
- Heard in Ep 9: Risky Business: Beta, Volatility and Defensive vs Cyclical Stocks
- Bid Ask Spread
- The gap between bid and ask prices, shows liquidity.
- Heard in Ep 7: Trading Volume, Bid/Ask Spread & Liquidity Explained
- Bid Price
- The highest price a buyer will pay for a share.
- Heard in Ep 7: Trading Volume, Bid/Ask Spread & Liquidity Explained
- Blue Chip Stocks
- Shares of large, stable companies with strong track records.
- Heard in Ep 10: Blue Chip Stocks, Growth vs Value, and CAGR Explained
- Bond
- A fixed income security where you lend money for interest.
- Heard in Ep 13: Bonds & REITs Explained: How They Fit in a JSE Portfolio
- Book Value
- Company’s assets minus liabilities on the balance sheet.
- Heard in Ep 5: PEG Ratio, NAV & Book Value: Are You Buying a Bargain or Just Broke?
- Bull Market
- A market trend where prices rise and optimism prevails.
- Heard in Ep 2: Bull vs Bear Markets, Market Cap & Volatility Explained for South African Investors
C
- CAGR (Compound Annual Growth Rate)
- Smoothed annual growth rate of an investment over time.
- Heard in Ep 10: Blue Chip Stocks, Growth vs Value, and CAGR Explained
- Capital Gain
- Profit from selling an investment at a higher price.
- Heard in Ep 11: Dividends vs Capital Gains – Which Should You Chase?
- Core Earnings
- Profit from a company’s main operations, excluding once off items.
- Heard in Ep 15: HEPS vs Core Earnings: Impairments Explained for JSE Investors
- Current Ratio
- Liquidity ratio: Current Assets ÷ Current Liabilities.
- Heard in Ep 17: Gearing Ratio, Current Ratio and Working Capital Explained
- Cyclical Stocks
- Companies whose earnings rise and fall with the economy.
- Heard in Ep 9: Risky Business: Beta, Volatility and Defensive vs Cyclical Stocks and Ep 12: Defensive vs Cyclical Stocks: When to Hold, When to Panic
D
- Debt to Equity Ratio
- Compares company debt to equity.
- Heard in Ep 4: ROE, ROA and Debt-to-Equity: Is This Company Actually Making You Money?
- Defensive Stocks
- Companies whose earnings stay stable in downturns.
- Heard in Ep 9: Risky Business: Beta, Volatility and Defensive vs Cyclical Stocks and Ep 12: Defensive vs Cyclical Stocks: When to Hold, When to Panic
- Delisting
- When a company removes its shares from an exchange.
- Heard in Ep 20: Rights Issues, Scrip Dividends and Share Buybacks Explained and Ep 24: JSE Suspensions and Delistings: What Happens to Your Shares
- Dividend
- Portion of profits paid to shareholders.
- Heard in Ep 11: Dividends vs Capital Gains – Which Should You Chase?
- Dividend Cover
- Times earnings cover dividends: Earnings ÷ Dividends.
- Heard in Ep 16: Dividend Cover, Forward Yield and Special Dividends Explained
- Dividend Payout Ratio
- Dividends ÷ Net Profit × 100%.
- Heard in Ep 6: Dividends Decoded: Ex Dates, Payout Ratios & Total Return Explained for SA Investors
- Dividend Yield
- Dividend per Share ÷ Share Price × 100%.
- Heard in Ep 1: P/E Ratio, EPS & Dividend Yield Explained Simply for SA Investors
- Dual Listing
- Company listed on two different stock exchanges.
- Heard in Ep 20: Rights Issues, Scrip Dividends and Share Buybacks Explained
E
- EBITDA
- Earnings before interest, taxes, depreciation, amortisation.
- Heard in Ep 3: EBITDA, Net Profit Margin & Free Cash Flow Explained for SA Investors
- Enterprise Value (EV)
- Market Cap + Debt − Cash.
- Heard in Ep 18: EV, EV/EBITDA and Price-to-Book Explained for JSE Investors
- ETF (Exchange Traded Fund)
- Basket of securities traded on an exchange, like a stock.
- Heard in Ep 8: ETF vs Unit Trusts, NAV & TER Explained – What Passive Investors Are Really Paying For
- EV/EBITDA
- Valuation metric comparing EV to EBITDA.
- Heard in Ep 18: EV, EV/EBITDA and Price-to-Book Explained for JSE Investors
- Ex Dividend Date
- Cut off date for dividend eligibility.
- Heard in Ep 6: Dividends Decoded: Ex Dates, Payout Ratios & Total Return Explained for SA Investors
F
- Forward Dividend Yield
- Projected future dividend yield.
- Heard in Ep 16: Dividend Cover, Forward Yield and Special Dividends Explained
- Free Cash Flow (FCF)
- Cash left after operations and capital spending.
- Heard in Ep 3: EBITDA, Net Profit Margin & Free Cash Flow Explained for SA Investors
- Free Float
- Shares available for public trading, excludes insiders.
- Heard in Ep 22: Market Breadth, Index Weighting and Free Float Explained
G
- Gearing Ratio
- How much of company capital comes from debt.
- Heard in Ep 17: Gearing Ratio, Current Ratio and Working Capital Explained
- Growth Stock
- Company prioritising reinvestment over dividends.
- Heard in Ep 10: Blue Chip Stocks, Growth vs Value, and CAGR Explained
H
I
- Impairments
- Write down of asset value.
- Heard in Ep 15: HEPS vs Core Earnings: Impairments Explained for JSE Investors
- Index Constituents
- The individual stocks that make up an index.
- Heard in Ep 23: JSE Index Changes and Rebalancing: How the Top 40 Is Picked
- Index Weighting
- How stocks are weighted in an index.
- Heard in Ep 22: Market Breadth, Index Weighting and Free Float Explained
J
- JSE Suspension
- Temporary halt of trading in a share.
- Heard in Ep 24: JSE Suspensions and Delistings: What Happens to Your Shares
L
- Liquidity
- Ease of buying or selling without affecting price.
- Heard in Ep 7: Trading Volume, Bid/Ask Spread & Liquidity Explained
M
- Market Breadth
- Ratio of advancing vs declining stocks.
- Heard in Ep 22: Market Breadth, Index Weighting and Free Float Explained
- Market Cap (Market Capitalisation)
- Share Price × Shares in issue.
- Heard in Ep 2: Bull vs Bear Markets, Market Cap & Volatility Explained for South African Investors
N
- Net Profit Margin
- Net Profit ÷ Revenue × 100%.
- Heard in Ep 3: EBITDA, Net Profit Margin & Free Cash Flow Explained for SA Investors
P
- P/E Ratio (Price to Earnings)
- Price ÷ Earnings per share. Shows valuation.
- Heard in Ep 1: P/E Ratio, EPS & Dividend Yield Explained Simply for SA Investors
- PEG Ratio
- P/E ÷ Earnings growth rate.
- Heard in Ep 5: PEG Ratio, NAV & Book Value: Are You Buying a Bargain or Just Broke?
- Price to Book Ratio (P/B)
- Price ÷ Book value per share.
- Heard in Ep 18: EV, EV/EBITDA and Price-to-Book Explained for JSE Investors
R
- Rebalancing
- Adjusting index holdings to maintain target weightings.
- Heard in Ep 23: JSE Index Changes and Rebalancing: How the Top 40 Is Picked
- REIT (Real Estate Investment Trust)
- Property investment that pays income as dividends.
- Heard in Ep 13: Bonds & REITs Explained: How They Fit in a JSE Portfolio
- Rights Issue
- Offer of new shares to raise capital.
- Heard in Ep 19: Why ETFs and REITs Trade Below NAV: Tracking Error Explained
- Risk Free Rate
- Return on a risk-free asset, usually RSA bonds.
- Heard in Ep 14: Rebalancing, Asset Allocation & Diversification Explained
- ROA (Return on Assets)
- Net Profit ÷ Total Assets × 100%.
- Heard in Ep 4: ROE, ROA and Debt-to-Equity: Is This Company Actually Making You Money?
- ROE (Return on Equity)
- Net Profit ÷ Shareholder Equity × 100%.
- Heard in Ep 4: ROE, ROA and Debt-to-Equity: Is This Company Actually Making You Money?
S
- Scrip Dividend
- Dividend paid in extra shares instead of cash.
- Heard in Ep 19: Why ETFs and REITs Trade Below NAV: Tracking Error Explained
- Sharpe Ratio
- (Portfolio Return − Risk Free Rate) ÷ Volatility.
- Heard in Ep 14: Rebalancing, Asset Allocation & Diversification Explained
- Special Dividend
- A one off dividend payout.
- Heard in Ep 16: Dividend Cover, Forward Yield and Special Dividends Explained
T
- TER (Total Expense Ratio)
- Annual cost of a fund as a percentage of assets.
- Heard in Ep 8: ETF vs Unit Trusts, NAV & TER Explained – What Passive Investors Are Really Paying For
- Total Return
- Capital gains plus dividends over time.
- Heard in Ep 6: Dividends Decoded: Ex Dates, Payout Ratios & Total Return Explained for SA Investors
U
- Unit Trust
- Managed fund priced daily, not like ETFs.
- Heard in Ep 8: ETF vs Unit Trusts, NAV & TER Explained – What Passive Investors Are Really Paying For
V
- Value Stock
- Company trading below perceived intrinsic value, often dividend paying.
- Heard in Ep 10: Blue Chip Stocks, Growth vs Value, and CAGR Explained
- Volatility
- Degree of price fluctuation.
- Heard in Ep 2: Bull vs Bear Markets, Market Cap & Volatility Explained for South African Investors and Ep 9: Risky Business: Beta, Volatility and Defensive vs Cyclical Stocks
W
- Weighting Methodologies
- Different approaches to weighting index stocks.
- Heard in Ep 23: JSE Index Changes and Rebalancing: How the Top 40 Is Picked
- Working Capital
- Current Assets − Current Liabilities.
- Heard in Ep 17: Gearing Ratio, Current Ratio and Working Capital Explained
The JSE stories worth knowing about, explained like a mate would at the braai. No hot tips, no spam.