What are Stocks?! By: Kandyse P Mrs. Eckelman Business Math T:/peckelman/business Math/What is a Stock Kandise — Eckelman Presentation 1
Why Invest in The Market? History shows that overall, the Market provides a return of 10-13% on the average. Savings accounts (vary per bank/credit union) .25% interest, Money Markets/CD’s (vary— low risk, limited dollar investment per purchase) Even with the Markets “ups” and “downs” it can provide one of the best ways to invest your money. Retirement investments, short-term, long-term and low, medium, high-risk options. Mutual Funds (diversification) The Stock Market is legalized Gambling (game of chance — with little to no guarantees). 2
Ways to Measure The Market — Known as Indexes The DOW — 30 big company stocks (list can change) and reports. (Companies like Boeing Co. Ticker Symbol — BA, Coca-Cola Co. Ticker Symbol KO) S&P 500 — lists 500 companies and reports. Lists a wider variety of companies including tech, financial, and health-care companies. For this reason, lots of investors prefer it to the Dow. Newpapers, websites, company websites (required by law to post reports). http://www.thestreet.com/madmoney/index.html 3
How To Measure Market Indicators? The Dow's highest closing record is 26, 828.29 set on Oct 3, 2018, msn money. We are on a 10 year Bull Market! 4 https://www.msn.com/en-us/money/indexdetails/fi- 30.10.%21DJI.30.%24INDU
Stock Market NYSE (New York Stock Exchange) Open Weekdays (9:30 a.m. to 4:00 p.m.) New York Time. More than 3,000 shared traded and more than 3,000 people work there on Wall Street in New York City. Thousands of companies trade off Wall Street, and all together, they’re valued at nearly $24 Trillion Dollars! NASDAQ (National Association of Securities Dealers Automated Quotation) Computerized system of trading stock around 3,000 different stocks are traded including technology stock and stock from smaller companies. 5
Bezo’s free preschools come as rich get richer and more generous https://komonews.com/news/nation-world/bezos-free-preschools- come-as-rich-get-richer-and-more-generous Bill and Melinda Gates Foundation https://www.gatesfoundation.org/ What is Jeff Bezo’s Net Worth? How did these people make so much money? What is Bill Gates Net Worth? https://www.businessinsider.com/billionaire-bill-gates-net-worth- 6 spending-2018-8
What is a Stock/Ticker Symbol? A stock is when you own part All stocks are given ticker of a company. symbols. All stock in a company is divided into many “shares”. Using the ticker symbol is If the company is making the easiest way to find profit, then so will you. info. about a company on Ex: if you own Disneyland stock, when you walk into the internet. Disneyland a little piece of Disneyland belongs to you! Ticker symbols are usually 1 to 5 letters long and usually have something in common with the company name. 7
Ticker Symbols Starbucks SBUX Nordstroms JWN Martha Stewart MSO (Martha Stewart was found guilty of perjury instead of insider trading) Target TGT Gap/Old Navy GPS Southwest Airlines LUV Microsoft MSFT Crocs CROX Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones Barbeque & Grill and Seasons 52 (Parent Co’s ) Co’s Owned by: Darden Restaurants Inc. DRI Hansen Natural (Monster Drinks) HANS 8
Ticker symbols are part of the Wall Street's history, dating back to the 1800's and the telegraph. The original stock tickers are unique for each company, regardless of the stock market or exchange on which they trade. If you see a company with a one or two letter stock symbol, that company is trading on the NYSE. That's because the NYSE is the oldest stock exchange in America and one and two letter symbols were the first to be assigned to companies. Ford, Ticker Symbol: F, NYSE MSN Money Link for Ford 9
If you see three letters, then that company trades on either the NYSE or the AMEX. If the stock symbol is greater than three letters, then the company trades on the NASDAQ. Microsoft, Ticker Symbol, MSFT Sold on NASDAQ MSN Money Microsoft GOOGL, Google Alphabet GOOG, Google 10
Mutual funds are always assigned four letters plus an "X" at the end so they are quickly identified by traders. Another symbol that you should be aware of is the notorious "E," which means the company has been delinquent in their filing with the Security and Exchange Commission - not a good sign. (Groups of stocks — low, medium and high risk) Example of a Mutual Fund: Nationwide Inv Dest Agrsv Svc (NDASX) Oppenheimer JohnHancock 11
What is a Stock Certificate? What is the difference between stock and money? A proof of purchase of ownership In a lot of ways, your share of in the company/official document stock certificate is like a dollar you should be careful with. bill; they are both valuable, Stock certificates have information specially printed. Some ways about the owner, the number of they are different is money is shares you own, and the date the printed by the U.S. stock was purchased. government, and stock is not, If you ever want to sell the stock, and money only comes in a you will need to give the certificate few values while stocks comes to the new owner. in many values. Their similarities include, the Stocks are signatures of leaders, and that harder to they are both printed on counterfeit special paper. vs. money 12
History Dutch East India Co issued the first stock ever in 1602. U.S. Stock Market, March 8, 1817 Why Do Co’s Sell Stock? Increase Capital (Cash Flow)$$$$$$$ Do All Co’s Sell Public Stock? No, For example Oprah’s Co (HARPO) doesn’t sell stock. All profits go to Oprah! IKEA, private co. 13
Highest Valued Stock Per Share in History for US? Warren Buffet, Berkshire Hathaway (BRK.A) stock $330,390 per share (12/3/18) 14
Starbucks Investor Information: Companies that offer stock must supply their financial information to the public. How do you find it? Look for investor relations or investor link www.sbux.com Financial website: msn money 15
How can I Purchase Stock? How old Must I Be? This may be over the phone, If your buying more than or using the internet. one share of stock, you When buying a stock keep in need to work with a mind the best investment. broker. Remember to pick companies If you are under 18, you that make products that you will need a parent to help already use, find out how the company has done earning you purchase a stock. money over time, and where the world is going. Charles Schwab Etrade Scotttrade.com 16 AmeriTrade.com
What Makes Ownership Special? When you own stocks you now have a say in how the company is run. You will receive an annual report and an invitation to the annual meeting, and you get to vote on important issues that affect the company. Companies will also send small tokens of appreciation with annual reports. 17
How Does Stock Work and How Can You Make Money? When you understand how a Microsoft Dividends .39 per stock works, it’s possible to make share more money investing in stock Starbucks Dividends .25 per than with other types of share investments. If the company grows, then the money you invested will grow! *Most Dividends are issued This is how you make money. quarterly (4 times a year) When a company pays out profits to the shareholders, those A stock split is a corporate action that payments are called dividends. increases the number of the corporation's outstanding shares by dividing each share, Stock Splits which in turn diminishes its price. The Dividends are divided among stock's market capitalization, however, shareholders accorded to how remains the same, just like the value of many shares they own. the $100 bill does not change if it is exchanged for two $50s You can take dividends in cash, or you can decide to reinvest them by buying more of the stock. “It’s far better to buy a wonderful company at a fair price than a fair 18 company at a wonderful price.” - Warren Buffet
Really, One/few Stock(s)? Why Safeco Story: Lyndall Scott Russell (Video) Invested in 15 shares and spent $315 in 1950 in Safeco and placed stock certificates in a shoe box and “forgot about them”. To date, this company had 9 splits and steady streams of dividends (sharing profit in co) since 1950 and turned this into 17,280 shares worth $1.15 million today :0) See Page 37! Example: Wal-Mart if purchased 1 share in 1975 (original value $20) now worth $67,000! 19
How can One share Be Worth Your Time? A share can go up in price, and it can also be split into more than one share as the price rises. If the company does well, your one share can turn into a bunch of shares and be worth a lot more than you first invested. EX: 1965 one share of McDonalds for $22.50 would be worth $25,000 in 2006. 20
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