Blue Chip
A company that is nationally acclaimed, well founded, and financially secure is a blue chip company. A blue chip company that issues shares provides blue chip stock.
Blue chip companies sell products and services that are bought by a very large number of people. They are characterized by deep balance sheets with a large amount of assets. Blue chips tend to succeed, or at least consistently bring in revenue, even in times of economic downturn. Coca Cola (KO), McDonald’s (MCD), and IBM (IBM) are some examples of blue chip companies that provide blue chip stock.
The term was coined by workers on Wall Street who compared the stocks seen on tickers to blue chips in casinos. Blue chips have the highest value in casinos. Analysts and common investors alike analyze the actions of blue chips and their stocks to estimate the general trends of the markets. So, the next time you here someone talk about a “blue chip stock”, just know that is even more simple than it sounds.
-Matt Schwartz
College Trillionaire
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