Alex Berenson Investors Quotations

Publicly traded United States companies report sales and profits to investors every quarter.

On the New York Stock Exchange, all buy and sell orders are routed through a single 'specialist,' guaranteeing that most small trades can be matched directly. But most larger trades are delivered to the specialist on the floor of the exchange by human brokers, a system that big investors view as increasingly inefficient.

Enron had already collapsed and filed for bankruptcy protection by the beginning of 2002. But despite complaints from short sellers that corporations had used accounting gimmickry to inflate their profits, many investors thought the crisis at Enron was an isolated case.

Fannie Mae is owned by shareholders but operates under a federal charter that exempts it from paying state or local taxes. As a result, many professional investors think the government would repay the debt that Fannie Mae had issued if the company could not, although Fannie Mae explicitly says that its bonds do not carry a federal guarantee.

For investors who do want to speculate in high-yield bonds, one alternative may be a junk bond mutual fund, which can offer investors the relative safety of diversification.

In general, investors prefer companies to reward executives for producing recurring income, not one-time gains.

Electronic communications networks match trades between investors directly, without using a market maker or specialist as an intermediary.

Traditionally, companies have made major announcements before or after the close of trading so that all interested investors and analysts are apprised of the news before trading resumes in their stocks.

At the end of 2000, most investors were optimistic that a return to quick gains could not be far off.

Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced.

It's no secret that big institutional investors have a lot of advantages on Wall Street. They get the first chance to buy hot initial public offerings. They get to meet in person with companies' managements.

In a Ponzi scheme, a promoter pays back his initial investors with money he has raised from new investors. Eventually, the promoter can no longer find enough new investors to pay off the people who have already put up money, and the scheme collapses.

Robert M. Morgenthau, the Manhattan district attorney, has seen a few financial schemes in his time. As the lead local prosecutor in the world's financial capital, he has battled frauds like the Bank of Credit and Commerce International, which stole billions of dollars from investors worldwide.

The lower spreads mean lower costs for investors, because Nasdaq investors generally do not trade directly with one another. Instead, they usually buy and sell from market-makers, brokerage firms that flip shares between buyers and sellers and keep the spread for themselves.

From 1983 to 2000, William Goren stole more than $30 million from investors on Long Island and in Queens. His favorite targets were widows and retired couples, like Helga and Simon Novack, Holocaust survivors who gave Mr. Goren their life savings.