Rescued Securities and Portfolio Shares

The rescued securities are known as portfolio shares because they form part of the portfolio of unregistered securities of the society as an added element to their assets.

Shares in a portfolio can become a two-edge weapon in the hands of an anonymous society management. On one hand, the program prepared by a company to rescue their own shares will determine the minimum price of the same, due that the company is probably the most important buyer and the most stranger financially at this moment. But, on the other hand, a program of this nature subtracts liquidity to the shares and inhibits any try of absorption, which will probably perpetuate the actual incompetent management.

When talking about ordinary shares the term flotation is frequently used. The flotation equals the total number of shares in circulation minus the number that are in the possession of company personnel, of institutional investors and of the own society, so, the flotation represents the number of participations that are available for trading on the public market.

I’m sure you would be surprised to know how small is the number of ordinary shares that a company hat at its disposal for trading. The calculation of the fluctuations and their personnel dominate and control the capital of the companies.

The flotation also tells you how hard or easy will be for you, as an investor, “to accumulate a position”, that is, to buy or sell a considerable number of ordinary shares of a society.

The reasons for investing in ordinary shares are as different as distinct are the classes of these type of securities. The investors preoccupied for preserving their capital and for collecting their fixed dividends, usually center their attention in the securities of companies of public services (gas, electricity, telephone, etc.) and the so-called blue chips (companies that have been growing during a long time and that have been paying un interrupted dividends).

Diametrically the opposite are those investors that, willing to run the risk of loosing the total of their investment, choose the possibility (even if it is remote) of finding a new IBM or Xerox, and direct their sight towards securities that are beyond the market and of new emissions.

Due to their diversity and liquidity, the ordinary shares are by far the most popular investment instruments.