![]() A bellwether leads its respective sector in that if its price rises, its sector follows suit, and if it falls in price, the sector declines as well. Bellwether stock: A trendsetting stock that is representative of its sector.Axe received information from a Mundia-Tel insider, Constantine, about the impending disaster before the bankruptcy was made public. Mundia-Tel was considered a bedrock until it filed for bankruptcy, causing a downward spiral in the telecommunications sector. Their growth spurt eventually slows down after years of growth, at which point they become income investments. Bedrock stocks are characterized by large market capitalizations and cash flow. Bedrocks: These are stocks poised to increase in value in the long term.Wendy convinces him to start bidding up those stocks in order to generate more buying momentum in them, and then sell to 'capture the alpha.' In episode three of season 4, Axe gets his hands on Taylor's holdings and stock positions. A negative alpha signifies underperformance. In simple terms, if a portfolio has an alpha of +5, it means that it outperformed the S&P index by 5%. Alpha is used to measure how well a fund manager performs. Alpha: The excess return that a hedge fund earns relative to the performance of a benchmark index or risk-free investment.For example, Bobby Axelrod buys a 4.9% ownership stake in YumTime Bakeries in order to force management to fire the incompetent CEO and to eliminate corporate inefficiencies which were costing shareholders for the past eight years, all while executive compensations had soared 300% over the same time period. By so doing, the activist investor can replace management or put pressure on it to significantly change its operational strategies with a view to driving the share price up. Activist investor: An individual or a group of individuals who purchase large quantities of a company’s stock in an attempt to gain control of a sizable number of the company’s voting seats. ![]()
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