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Stock (share)

A title of ownership of a fraction of a listed company. Holding one gives a right to a share of profits (dividends) and, often, a voting right.

Order book

The list of pending buy and sell orders on a security, by price level. Its depth gives a direct reading of liquidity.

Analyst consensus

The average of published analyst forecasts, notably for earnings per share. The gap with the actual result is called the surprise.

Leverage

Exposure larger than the capital committed, through borrowing or derivatives. It amplifies gains and losses alike. The journal excludes leveraged positions.

ETF (tracker)

An exchange-traded fund that replicates an index, a sector or a theme. It gives diversified exposure in a single holding.

Fear & Greed

A market-sentiment index running from 0 (extreme fear) to 100 (euphoria). Extremes have often preceded a reversal.

Brokerage fees

The commission charged by the broker on each executed order. On small amounts invested often, they weigh heavily on net returns.

Benchmark index

A basket of securities used as a comparison point for performance, such as the CAC 40 or the S&P 500.

Crash / correction

A correction is a decline of around 10 % from a peak; a crash is an abrupt, rapid fall, generally beyond 20 %.

Liquidity

How easily a security can be bought or sold without moving its price. It shows in the traded volume and the size of the spread.

Limit order

An order carrying a maximum price to pay when buying, or a minimum to accept when selling. The price is controlled; execution is not guaranteed.

Market order

An order executed immediately at the best available price. Execution is certain; the price obtained is not.

Stop order

An order triggered when the price crosses a threshold set in advance. It is used to cap a loss or protect an unrealised gain.

Currency risk

The effect of exchange-rate moves on an investment denominated in a foreign currency. Currency is part of the result, upwards and downwards.

Sector rotation

The shift of capital from one sector to another along the economic cycle. Read by comparing sector performance with the index.

Slippage

The gap between the price expected when an order is sent and the price actually obtained. It widens on illiquid securities and in volatile sessions.

Spread

Gap between the best buying price and the best selling price at a given moment. It is an implicit round-trip cost and widens on thinly traded securities.

Earnings surprise

The gap between reported earnings and the analyst consensus. A marked surprise often triggers a swift price reaction.

Small / mid / large cap

Classification of companies by market-capitalisation size. Smaller caps are generally more volatile and less liquid than large ones.

Short selling

Selling a borrowed security to buy it back later. The gain comes from a fall and the loss is theoretically unlimited. The Earnnest journal does not model these positions.

EPS

Earnings per share: net income divided by the number of shares. Building block of the P/E and of fair value.

Market capitalisation

The market value of all a company's shares: share price multiplied by the number of shares outstanding.

DCF

Discounted Cash Flow: valuation by discounting future cash flows. The result is highly sensitive to the assumptions used.

Discount / premium

The gap between the current price and the estimated fair value. It states a gap; it is not a buy or sell signal.

EV/EBITDA

Enterprise value (market cap + net debt) divided by EBITDA. A valuation multiple that neutralises the financing structure.

Fair value

A methodological estimate of a stock's value (here: median multiple × EPS). A factual, non-personalised reference, neither advice nor a price target.

Median multiple

The median valuation multiple over the security's history, used as a reference for what is normal. A building block of Earnnest's fair-value calculation.

P/B

Price / Book: share price relative to shareholders' equity per share. Compares the price paid with the company's book value.

P/E ratio

Price / Earnings: share price divided by earnings per share. Measures how many years of earnings you “pay” for the stock. A high P/E reflects strong growth expectations.

Forward P/E

P/E computed with expected earnings per share (analyst forecast) rather than past earnings.

PEG

P/E relative to the earnings growth rate. A PEG near 1 suggests a valuation consistent with growth.

P/S

Price / Sales: market capitalisation relative to revenue. Useful when the company is not yet profitable.

Enterprise value (EV)

Market capitalisation plus net debt. Approximates what acquiring the business would cost, financing included.

WACC

Weighted Average Cost of Capital: the rate used to discount future cash flows in a DCF. The higher it is, the more conservative the valuation.

Revenue growth

The rise in sales from one period to the next. It is the primary driver of earnings growth over time.

EBIT

Operating income (before interest and taxes). Measures the profitability of core operations.

EBITDA

Earnings before interest, taxes, depreciation and amortisation. Approximates the cash generation of the business.

Free Cash Flow (FCF)

Cash flow available after investments. The cash actually generatable, distributable or reinvestable.

FCF yield

Free cash flow relative to market capitalisation. Yield of generated cash versus the price paid.

Gross margin

Revenue minus cost of goods sold, relative to revenue. Reflects pricing power.

Net margin

Net income relative to revenue. The share of every euro of sales that becomes final profit.

Operating margin

Operating income relative to revenue. Measures the profitability of the business before financing and tax.

Moat (competitive advantage)

A durable barrier that protects a company's profits (brand, costs, network effect, patents). A wide moat sustains high profitability over time.

ROA

Return on Assets: net income relative to total assets. Measures how efficiently the company uses all the resources it deploys.

ROCE

Return on Capital Employed: operating income relative to capital employed. Measures how efficiently invested capital works.

ROE

Return on Equity: net income relative to shareholders' equity. Return for the shareholder. Above 15–20% is generally considered solid.

Current ratio

Current assets divided by current liabilities. Measures the ability to meet short-term debts (above 1 = comfortable).

Net debt

Total debt minus available cash. Negative net debt means more cash than debt.

Net debt / EBITDA

Number of years of EBITDA needed to repay net debt. Beyond 3–4×, leverage becomes a point of caution.

Beta

A stock's sensitivity to market moves. A beta of 1 moves with the market; above 1 = more volatile; below 1 = more defensive.

Concentration

The share of the portfolio taken by its largest holdings. High concentration makes the outcome depend on a few securities.

Correlation

A measure (between −1 and +1) of how much two stocks move together. Low correlation between your holdings improves diversification.

Current drawdown

The present gap between the portfolio's value and its all-time high. A zero drawdown means it is at its peak.

Max drawdown

The worst decline recorded between a peak and the following trough. Measures the maximum loss historically suffered.

Sharpe ratio

Excess return (above the risk-free rate) per unit of volatility. The higher it is, the better the risk/return trade-off. Above 1 is good.

Sortino ratio

A variant of the Sharpe ratio that penalises downside volatility only. More relevant when returns are asymmetric.

Risk-free rate

The return on an investment deemed free of default, typically a short government bond. It is the starting point of the Sharpe ratio.

Tracking error

Standard deviation of the return difference between a portfolio and its benchmark. Measures how far the management strays from it.

VaR (Value at Risk)

The loss a portfolio should not exceed over a given horizon, at a given confidence level — 95 % for instance.

Volatility

The magnitude of price variations, often annualised. The higher it is, the riskier the stock or portfolio.

Alpha

Out-performance (or under-performance) of a portfolio relative to its benchmark.

CAGR

Compound annual growth rate. Smooths a multi-year performance into a single annual pace.

Expectancy

The average gain expected per trade, factoring in the size of wins and losses. Computed on the journal's closed history.

MAE / MFE

Maximum Adverse / Favourable Excursion: the worst and best level reached by a trade before it closes. Useful to calibrate stops and targets.

Profit factor

Total gains divided by total losses. Above 1, cumulative gains exceed cumulative losses.

R multiple

A trade's gain or loss expressed in multiples of the risk initially committed. Makes trades of different sizes comparable.

Win rate

The share of closed trades that ended in profit. It is not enough on its own: it ignores the size of gains and losses.

TWR

Time-Weighted Return: a return that neutralises the effect of deposits and withdrawals, to measure pure management performance.

ADX

Average Directional Index: measures the strength of a trend (without its direction). Above 25 = marked trend.

ATR

Average True Range: the mean amplitude of daily moves. Used to size a stop in units of volatility.

Bollinger bands

An envelope drawn a number of standard deviations around a moving average. It narrows when volatility falls.

EMA

Exponential Moving Average: a moving average weighting recent sessions more heavily. It reacts faster than a simple average.

Fibonacci retracements

Levels derived from a mathematical sequence (23.6 %, 38.2 %, 61.8 %), used as pullback markers within a trend.

Ichimoku

A set of Japanese indicators drawing a cloud around the price, summarising trend, support and resistance on a single chart.

MACD

Moving Average Convergence Divergence: a trend and momentum indicator based on the gap between two moving averages.

Moving average

The average price over a rolling window, often 50 or 200 sessions. It smooths variations to bring out the trend.

OHLCV

Open, High, Low, Close, Volume: the five values describing a trading session and forming a chart candle.

RSI

Relative Strength Index: a momentum oscillator (0–100). Above 70 = overbought zone, below 30 = oversold.

Stochastic

A momentum oscillator placing the closing price within the range of recent sessions, on a 0 to 100 scale.

Support / resistance

Price levels where falls or rises have historically paused. They are reading marks, not barriers.

Volume

The number of securities traded over a period. A price move backed by heavy volume is considered more meaningful.

Dividend aristocrat

A company that has raised its dividend every year for at least 25 years. The past does not bind the future.

Payment date

The date on which the dividend is actually credited, usually a few weeks after the ex-date.

Dividend

A share of profit paid to shareholders. The dividend yield relates this payment to the share price.

DRIP

Dividend Reinvestment Plan: automatic reinvestment of the dividend into new shares rather than cash.

Ex-dividend date

The date from which buying the stock no longer entitles you to the next dividend.

Payout ratio

The share of earnings paid out as dividends. Above 100 %, the company distributes more than it earns over the period.

Yield on cost

Annual dividend relative to your purchase price (not the current price). Measures the real yield of your position.

Breakout

The price crossing above a resistance level, often accompanied by a rise in traded volume.

Conviction

The certainty declared when entering a position, from 1 to 5. It lets you check afterwards whether your best trades were also your most assured.

Pullback

A temporary retreat of the price towards a support level or a moving average, after an upward move.

R:R ratio (risk/reward)

The ratio between the targeted gain and the accepted loss on a trade. An R:R of 3 means a target worth three times the risk taken.

Setup

The chart or technical configuration that prompted the entry, recorded in the journal so you can review afterwards what works.

Stop loss

A price, set in advance, at which the position is closed at a loss. It caps the risk of a trade and marks the invalidation of the original thesis.

Take profit

The target price at which gains are taken. Together with the stop loss, it sets the trade's risk/reward ratio.

Timeframe

The time unit of the candles analysed. D1 means daily candles, H4 means four-hour candles.

Allocation

The target split of a portfolio across asset classes, sectors or geographical regions.

DCA (regular investing)

Dollar Cost Averaging: investing a fixed amount at regular intervals, whatever the price. It smooths the entry price over time.

Diversification

Spreading a portfolio across several securities, sectors and regions, so that no single event determines the overall result.

Inflation

The general rise in prices, which erodes the purchasing power of capital. A return must exceed it for real wealth to grow.

Compound interest

The mechanism by which gains themselves produce gains. Its effect stays modest in the early years and becomes decisive over time.

Rebalancing

Bringing a portfolio back to its target allocation, by trimming what has risen most in favour of the rest.

Holding-period allowance

A base reduction available under the progressive-scale option, limited to securities acquired before 1 January 2018: 50 % from 2 to 8 years, 65 % beyond.

CTO

Ordinary securities account: an investment account with no specific tax advantage, but no cap or geographic restriction.

FIFO

First In, First Out: the securities sold are deemed the oldest bought. Earnnest uses it for the portfolio, never for the tax base — the law requires the weighted average cost.

IFU

The annual tax statement issued by the French account holder. It is the authoritative document; Earnnest's summary does not replace it.

Carry-forward loss

A loss not offset in the year it arises, which can be set against gains of the next 10 years (article 150-0 D, 11).

PEA

Plan d'Épargne en Actions: a French tax wrapper. After 5 years of holding, gains are exempt from income tax (excluding social levies).

PFU (French flat tax)

France's single flat levy on capital income: 31.4 % since 1 January 2026, made up of 12.8 % income tax and 18.6 % social levies.

Capital gain

The difference between the sale price and the cost basis, fees included. The taxable event is the sale, not the rise in price.

Weighted average cost

The cost-basis rule set by article 150-0 D, 3 of the French tax code: each purchase recomputes an average unit price across all holdings of the same security.

Social levies

French social contributions on investment income: 18.6 % since 1 January 2026 (LFSS 2026), against 17.2 % up to 2025.

Tax-loss harvesting

Deliberately realising losses to offset gains and reduce the year's tax.

Smart alert

A notification triggered by a threshold being crossed or a signal changing on a security you follow.

Backtest

A simulation of a strategy on past data. Past performance does not predict future performance.

Confidence

The model's certainty at the time of the analysis, from 1 to 10. High confidence reflects a clearer signal, not a likelier outcome.

Discovery

A narrowed selection built from predefined criteria, so you start from a short list rather than a whole universe.

Digest

A periodic email summary covering the moves and signals of the period just passed.

Referral

A programme crediting extra analyses to both referrer and referee when an account is created from a referral link.

Community pulse

An aggregate indicator of the securities most viewed and followed across all users, without ever exposing individual data.

Composite score

A [0–100] score combining the technical score and the sentiment drawn from the analysis, each source weighted by its reliability.

Earnnest score

A summary score out of 100 aggregating fundamentals, valuation and momentum. A factual, non-personalised marker — neither advice nor a price target.

Fundamental score

A [0–10] score combining revenue growth, net margin, ROE, free cash flow quality and debt level. Above 7 counts as solid.

Model score

A probability estimated by a statistical model trained on historical data. A probability drawn from the past guarantees no future outcome.

Technical score

Trend score [0–100]: continuation of the trend over weeks to months, computed from EMA 50/200, MACD and ADX.

Timing score

A [0–100] score: is the stock stretched in the short term, regardless of the underlying trend? Computed from RSI, Bollinger and Stochastic RSI.

Screener

A multi-criteria filter over the tracked universe of securities, keeping only those meeting the thresholds you set.

Sentiment

A qualitative reading drawn from news and company filings, produced by an advanced model. It complements the technical score rather than replacing it.

Earnnest signal

The market polarity shown for a security: bullish, neutral or bearish. It states a factual condition, identical for everyone, and is not a recommendation.

Overfitting

The flaw of a model that memorised the past instead of deriving a rule from it. It shines on history and collapses on new data.

Track record

The public, timestamped history of published analyses, kept so it can be checked after the fact.

Out-of-sample validation

Testing a model on periods it never saw during training. Without it, a measured performance proves nothing.

Watchlist

A list of securities followed without being held, so you receive their signals without mixing them into your portfolio.