What are Stocks?! By: Kandyse P Mrs. Eckelman Business Math - - PowerPoint PPT Presentation

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What are Stocks?!

By: Kandyse P

• Mrs. Eckelman

Business Math

T:/peckelman/business Math/What is a Stock Kandise—Eckelman Presentation

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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

• f chance—with little to no guarantees).

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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

How To Measure Market Indicators?

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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! https://www.msn.com/en-us/money/indexdetails/fi- 30.10.%21DJI.30.%24INDU

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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.

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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- spending-2018-8

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What is a Stock/Ticker Symbol?

 A stock is when you own part

• f a company.

 All stock in a company is

divided into many “shares”.

 If the company is making

profit, then so will you.

 Ex: if you own Disneyland

stock, when you walk into Disneyland a little piece of Disneyland belongs to you!

 All stocks are given ticker

symbols.

 Using the ticker symbol is

the easiest way to find

• info. about a company on

the internet.

 Ticker symbols are

usually 1 to 5 letters long and usually have something in common with the company name.

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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

 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

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 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

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 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)

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Example of a Mutual Fund: Nationwide Inv Dest Agrsv Svc (NDASX) Oppenheimer JohnHancock

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What is a Stock Certificate? What is the difference between stock and money?



A proof of purchase of ownership in the company/official document you should be careful with.



Stock certificates have information about the owner, the number of shares you own, and the date the stock was purchased.



If you ever want to sell the stock, you will need to give the certificate to the new owner.

 In a lot of ways, your share of

stock certificate is like a dollar bill; they are both valuable, specially printed. Some ways they are different is money is printed by the U.S. government, and stock is not, and money only comes in a few values while stocks comes in many values. Their similarities include, the signatures of leaders, and that they are both printed on special paper.

Stocks are harder to counterfeit

• vs. money

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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.

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Highest Valued Stock Per Share in History for US?

 Warren Buffet, Berkshire Hathaway

(BRK.A) stock $330,390 per share (12/3/18)

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

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How can I Purchase Stock? How old Must I Be?

 If your buying more than

• ne share of stock, you

need to work with a broker.

 If you are under 18, you

will need a parent to help you purchase a stock.

 This may be over the phone,

• r using the internet.

 When buying a stock keep in

mind the best investment.

 Remember to pick companies

that make products that you already use, find out how the company has done earning money over time, and where the world is going. Charles Schwab Etrade Scotttrade.com AmeriTrade.com

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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.

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How Does Stock Work and How Can You Make Money?



When you understand how a stock works, it’s possible to make more money investing in stock than with other types of investments.



If the company grows, then the money you invested will grow! This is how you make money.



When a company pays out profits to the shareholders, those payments are called dividends.



Stock Splits



Dividends are divided among shareholders accorded to how many shares they own.



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 company at a wonderful price.”- Warren Buffet

 Microsoft Dividends .39 per

share

 Starbucks Dividends .25 per

share *Most Dividends are issued quarterly (4 times a year)

A stock split is a corporate action that increases the number of the corporation's

• utstanding shares by dividing each share,

which in turn diminishes its price. The stock's market capitalization, however, remains the same, just like the value of the $100 bill does not change if it is exchanged for two $50s

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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!

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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.

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How Do Stock Prices Go Up Or Down?

 The more popular a stock is the more people

want to buy it, so the prices go up. In a nutshell it’s a popularity contest.

 A few factors of what makes prices go up and

down are supply & demand, laws, world events, trends, expectations, rumors, publicity, competition, stock analysis, co buyouts, etc.

 BP Oil (BP) The Deepwater Horizon oil spill (also referred to as the BP oil spill, the Gulf of

Mexico oil spill, the BP oil disaster or the Macondo blowout) is an oil spill in the Gulf of Mexico which flowed for three months in 2010. The impact of the spill continues since the well was capped. It is the largest accidental marine oil spill in the history of the petroleum industry.



Chart (Look at 2010)

 Arthur Anderson was one of the top 5 major accounting firms and

folded over the Enron stock scandal.

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Thinking of Ways To Invest



The main reason you want to own stock is to invest in,

• r own, part of a company that you will grow bigger and

provide people with good service or a good product.

 Some ideas that will help you make a good decisions

about how you invest in stock are: diversification (Tech, retail, financial etc), short-term vs. long-term investment, and stock compared to other types of investments.

 Mutual Funds: Stock ownership in multiple companies

(low, medium and high risk types)

 Other investments vs. Market: Money Markets, CD’s,

Bank Savings Accounts.

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What Are the Risks?

 Gain Money  Don’t lose/Don’t gain  Lose $ (investment) ie) ENRON (Energy

Company—CEO’s charged with Fraud lost value of stock “overnight”!

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Things That Can Happen To Your Stock

 Stock Splits- when a company’s stock keeps going up or

• down. Usually , this means that one share of stock will

be split into two shares. This is to keep the prices from getting so high that people can’t afford to buy even one single share.

 Mergers & Acquisitions- when two different companies

decide they want to get together and make one new

• company. Companies decide to do this when they

believe they will be bigger and better by joining forces. This does affects the stocks.

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The World of Stock

 Bulls and Bears  When things are going

well with the stock market, everyone calls it a Bull market.

 When the opposite is

happening, and everyone is grumpy because their stocks are losing money, people call it a Bear market.

 Are we currently in a

bear or bull market? Answer:

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World of Stock

 Other countries have their own stock

• exchanges. The big ones are in England,

Japan, Germany, India, and China.

Interesting Stocks

 F, Ford  CROX, Crox  TSLA, Tesla  DECK, Ugg shoes  JCP, JCPenny  PG, Proctor and Gamble  TM, Toyota  NFLX, Netflix  AMZN, Amazon

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My Chosen Stocks

 I personally invested in

Coach, Tiffany & CO, Starbucks, T-Mobile, and Coca-Cola.

 I chose these places to

invest in because, I usually shop at all these companies, and I am a supporter of almost all 5 companies on a daily basis.

 Although all these

companies I have invested in have put me in the hole, daily.

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Three Famous American businessmen



Bill Gates- the richest man in the world today. He is famous for starting Microsoft. By the time he was 30, he earned his first billion dollars, all from selling stock in his

• company. He is worth $60 billion.



John Jacob Astor- A peddler saved enough money to start buying and selling furs. With the money he made, he bought land in New York City and became America’s first

• millionaire. He is worth $85 billion

today.



Cornelius Vanderbilt- One of the first business men to see that steamships and railroads were going to be very important. He invested in a new industry and at

• ne point controlled 16 railroad
• companies. Due to inflation, his

fortune is close to $100 billion.



Bill gates

John Jacob Astor



Cornelius Vanderbilt

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Stock Facts

 In 2006, 19,000 people came to the Disneyland annual

• meeting. There was so many people that they held the

meeting in a hockey stadium-the Anaheim Pond!

 One share of GE bought in 1925, after splits, would now

be equal to 4,608 shares!

 225 companies started selling stock for the first time in

2005.

 There are over 6000 companies, each with their ticker

symbol, on the top US stock exchanges!

 In 2006, Bill Gates owned 977,499,336 shares of

Microsoft, giving him 977,499,336 votes!

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total stock owned

10% 38% 31% 16% 5%

apple dreamworks microsoft coca-cola Ebay

Percentage of Shares Purchased with $5,000

32 $186.16 186.28 $31.19 31.13 $30.90 36.84 $59.75 60.49 $35.94 34 $- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00 $200.00 dollar amount (hundreds) apple dreamworks microsoft coca-cola Ebay

companies initial share price

• riginal purchase price
• Nov. 5, 2007 price

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Bar Chart

$36.49 34.27 $41.43 40.23 $85.25 49.6 $63.13 60.61 $26.14 25.03 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00

Dollar Amount

coach AT&T tiffany & co. Coca cola starbucks

Company Names Initial Purchase Price vs. Nov. 5,2007 Prices Original Purcahse Pric Nov 5, 2007 Price

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Reading Stock

 www.morningstar.com  www.moneycentral.msn.com (click on

investing and stock)

 www.oneshare.com