Learn Stock markets....

Ok here i just thought to kinda explain what happens in the stock market.

I want this to be somewhat a tutorial if someone find anymistakes please do correct them.


the stock market is like your local grocery store. Stock Market is the place where many corps sell there stock. You don't have to sell stock to the new york stock exchange.

When you start a company you are offered based on you assets stock shares.

Now The reason you want shares is because if you want to start a company like an airline you need alot of funds at startup like more than a million dollars. If you don't have the cash you can have people invest in you.

So when you get these shares they will ask you what price do you want. You can choose. The is then the default market price at startup. Usally you want a low price as possible because noone would buy your shares at a highprice unless your well known.

So when you issue this with your broker which works with the New york stock exchange they will issue it.

Now this in accounting because shareholders equity meaning you got a certain amont of money from shareholders this then goes into the company and then more assets are in the company meaning now you can issue new shares if you wanted to since now the assests gained.

If you want to figure out what's going to be tommaro if the stock is going up or down it deals with netprofits of that specific quater.

The net profits is what drives the market price of the share.

So if you sell and buy and sell short term you see these numbers go up and down ect .

Now the rule is when you have your company you need 51% shares to stay in control of your company if you have 50% or less you have a possiblity to lose the control of the company.

This is where others can buyout the company or liquidfy meaning sell all assets.

The reason why 51% because every shareholder has a right to vote on issues of the company. the more shares you posses the mores votes you get.

so if you can vote for 51% of the company you have more then half the votes causing whatever you decide will be the decision.

So there is more too it. It's more about demand and supply.

But the stock market gives you a good front row picture of what our economy looks like.

It dosen't look good so far. GM stock price is at it's lowest in so many years.

Alot of people were surprised seeing 45 bucks a share drop to 10 bucks a share.

Now again this is based on net profits. GM has problems in sales this has an imapact on the net profit.

If you know accounting and take a accounting class you can see a better picture since the companies are supposed to provide a finical statment which you can see where the money is going but with todays economy don't expect no company will try and play accounting fraud...


hope this helps. If anyone has anything to add or more questions post here.

I will try to answer them the best I can and would like also others that have experience in here to join in to help others understand Stock markets more better.

Thanks for your time.

Here is a more official explaination. I mostly explained in terms of accounting but there is alot to do with the Stocks.

hopefully this will will click here: Click Here for a video that explains New york stock exchange a little bit better.

The easiest way to put it is that when you buy a share of stock from a company, you are LENDING them money to increase their operations a grow. They are working for you and trying to please their shareholders with a return. It is a long term relationship in a lot of good companies' eyes.

The best way to invest is not to think of quick day trading or worry about the little ups and downs or "divits" on the graphs. Think long term and where you want your money to be and what company will use it the best.

I recommend to friends some things I learned from Warren Buffet speeches:

1. Invest in things you know and understand. If you have a hobby or love certain brands or products, maybe do some reading about them and their competitors. Also read about the industry some- And see if their are any widespread public opinions relating to your interests.

2. Invest simple and with a plan. Anything from 3-5 years is a good start.

3. Diversify. Obviously you should get a lot of safer things like bonds to curb the risk of your stocks. But, when you choose stock, don't go wild and choose a ton of crazy things. Pick 3,5, or 10 stocks that are all GREAT ideas.

4. If is sounds to good to be true, it probably is. Invest safe and conservative and you will be succeessful. Daytraders are not as successful as longterm traders. Also remember taxes, there is a short-term (less than 1 yr) capital gains tax which is much worse to pay than the long term capital gains tax.

5. If we're all getting chipped, invest in verichip (CHIP). They might be the ones to do it and we'll all hit it big! (HAHA I'm totally joking)

Also, when a company is up and coming and decides to go public, that is whne they require investors to raise a lot of capital. This is a Public Trade Offering (PTO) and generally the investors get it at a good price and it rises right when it becomes tradeable.

Don't be shy to do some of your own trading to learn some things, I use scottrade which allows me to trade in US and Canada, It is very user friendly and they always get your money to you quickly.

I Hope any of this rant might help.

Originally posted by vapedson
The easiest way to put it is that when you buy a share of stock from a company, you are LENDING them money to increase their operations a grow. They are working for you and trying to please their shareholders with a return. It is a long term relationship in a lot of good companies' eyes.

I've no problem with the rest of your post but the part about buying stock being lending. Aren't you really BUYING a piece of the ownership of that company. When you buy a companies bonds you aren't you LENDING them money? This is a really important difference between the two simplest of instruments. Basically stockholders = Owners, Bondholders= Creditors. When a company goes bankrupt guess who gets made whole out of assetts first.

Otherwise great info .

reply to post by jefwane



Ya it's lending and also ownership.

what you are doing is giving a big some of money to a company well corp.

They then use this money to pay for items or anything to deals with the company operations.

what you get in return is shares which are legal papers that say you own a certain portion of the company.

However in reality who ever has the 51% of shares has control they baiscly own the company since they have majority.

you owing 1 or 5% of the company is now owning the compnay but you can look at owning a small peice of it. I just don't think of it that way.

It's more like buying assests of a company and then selling them.


like the post above explain that it's lending is a true view of it becuase when we think owning something you should have control of what you own so ledning is a better picture of it it's like you give someone money but make them pay interest on that loan.

You do own a portion of the company but trust me that is how they want you to think of it so you go out and buy stock feeling good.

The realiaty it's good for businesses if the corp has a LLC meaning limited liability corpaeration they don't have to pay off expenses or liabilites if they file bankrupted.

When filing bankrupped the court will decide what you have to pay to the shareholders it depends on stuff that the corp owed before the applied brankruppted.

so anything after they declare bankruppet dosen't require the company to pay those liabilites so lets say a company have a 100,000 phone bill but the bill was to be at the end of the month and yet the 1st of the month they declared bankruppet they will not have to pay the bill since the billing agreement is at the end of the month.

The court will decide which liability will have to be paid to what.


The Stock market is most ways to get the funds of a company or a business.

If you want to start a business learn accounting and stockmarket before starting a corperation .

Acocounting will teach more about business aspects.

I am currently majoring in accounting. I am currently in school and so far have one year in accounting.

I am glad I didn't get flammed starting this topic.

I also notice the college I attend don't care if I learned or not. I currently didn't have teachers teaching me, I had to just read the books do hw and take the tests.

The teacher didn't teach much to me and I learnd more when talking to current accountants and learning from people that are currently involved.

Hope this helps.

yes you are right : Basically stockholders = Owners, Bondholders= Creditors.

So yes this is true.


I created this post to start a fourm to educate ourselfs more and better on the Stock market.

If anyone has anything to add to a better explaination of this subject please do tell.


So far in just one year of accounting course, well accounting plus fed tax and also economics ect.

I never got details stuff about the Stock Market only know how to book thos earnings from stocks or stockholder equity which is a business book keeping of the equity.

reply to post by computerwiz32




most of your stuff is OK
the only thing i have a problem with is the GM explainations you gave.

i suggest one should factor in the unrightious stealing that GM did to the tens of thousands of career workers who werte promised an adequate retirement and medical benefits package after they put up with the GM BS for 30-40 years of productive life.
the elite executives actually stole (albiet Legally) the promised benefits/retirement packages the lifetime workers were promised...but have since Not received !

through a 20 year series of windangle and financial slight-of-hand, the GM execs plundered the several billion $$ of pension fund monies , into the empty shell it is now. the legal bamboozlement was to sway the expectant pensioneers to sell out for the swindle called 'Defined Pension Benefits' on something like 25 cents on the dollar and the suspension or reamed out medical clauses that 'vacated' that portion of the retirees pension
(unless one was an upper eschelon 'Elite' executive)

the treasury of GM was ransacked... the corporation is esentially bankrupt, because the elites awarded themselves outrageous bonuses over the last 20 years.
its not so much that GM is suddenly 'un-profitable'---- that response is the cover story, no more.....


thanks

reply to post by St Udio


Thanks for the reply. I want to start off first saying I like your icon, i love family guy lol.

Yes I understood what you said, just woundering are you in that situation???

my dad worked for GM for a long time and last 2 to 3 years he retired and just a couple weeks ago he got a letter from gm saying about the medical benifits my dad knew that was coming.

My dad is retired and is currently working at a steel factory he has an eletrical engineering bach degree and was not able to find any jobs.

My dad told me that thank god he still has is electrician technician certificate/ licenses. This is how he got the job at the steel factory.

My dad complains alot about the area he works at. It's dirty and dangerious, I saw a story on our local news one time it was breaking news that a furnace blew up and one died and 3 were injured.

My dad told me that every month somthing happens becuase the factory is old and many people that work there are old and are pressured by the managers to keep working and working. My dad told me that one time he saw a guy working overtime the guy worked day shift and so the manager got a call from a guy that said he can't make it to work for the night shift so the manager offered the day shift worker overtime to work on the night shift so the guy agreed and the guy is old and my dad saw him the next day at work tired he saw him after lunch going to a corner room taking a nap but he never woke up he found out the guy had a heart attack.

These stories my dad told me are true and yet dosen't go on the local news they keep it hush hush.

ya GM is stealing stuff. I hope you know the suprem court made a new desicion and got a new law passed ect about businesses not having to fullfill a contract that claims benifits of medical coverage ect.

Which this new law thing this allowed GM to sock it you the retiress.

Also hope you know that I have heard rumors don't know how true though but I have heard GM is controlling the stocks price, I have heard they been moving assests to other countries using loop holes which they would write down on the books it was sold but in reailty they have the assets in another country ect.

In other words Gm is not truelly bankrupped they have operations outside the U.S where this allows them to hide alot of stuff like cash and much more.

The stuff you hear about GM is just for the U.S this is another way to rob the people that worked for GM and also shareholders of their stock.

Did you hear about the predictions on sep 30th of this year we will have a economic meltdown.



I create this post to help us learn the True stock market. I notice in college they brain wash you to a point.

Like my economics class they show you where to find the GDP this GDP source link is from the U.S gov and I question what if the GOV desides to fake the numbers to prevent riots ect . The college class never showed us how we can test those GDP values that the gov gave us. So we have to just plain out bealive and trust the gov on their figures.

I also hope you know that the GDP values are based on estimated values.

They do a servey on companies randomly and then there is a formula they follow which would create this estimated GDP which is what the gov gives.


So I decided to make a post to hopefully help US ATS members really look at the Stock market and really help teach all of us what it really is.

I mean the stuff I learned from college is only half true.

I was told in economics that the gov will insure every person that has a bank account and that bank goes under they will insure you 100,000 or less.

My dads friend works in a bank and also said yes this is true and truely bealives this.

then when I saw on ATS and also I think fox news saying about beady mac bank goes under.

They said well the insurancy agency that suuposed to insure your account that is 100,000 or less, they don't do this magicly.

They take the assets of the bank and then sell them, now this this economy who is going to buy a bank or at least the assets of a bank when people are trying to just pay the bills ect.

So if they can't sell the bank to liquidfy it then you will not get insured, they have some rules on how much they can still insure people.

I have heard on ATS that , that exact same insurance company dosen't even have enought money to even pay their liabilities so how can they insure americans bank accounts.

the bank business is nothing but taking your money investing it in stocks or bonds ect.

they by law have to have about 20% on hand so let's say you put in 100 bucks in your bank account and that is your total.

So they by law the bank will have to have 20 bucks on hand just in case you come in and want to take some money out .

So 80 bucks is what the bank can invest to make money on.

The federal gov sets the %, and 20% is an example I don't know the current one.

Hope you got the concept of the banking business they make money by using your money for investment this is why they have to pay you interest for having money in the account.

Now if those investments were bad then there goes your money. This was somewhat what happend with andy mac the bank they made bad loans/ investments. This caused the breakdown of the bank.

I you take an economic class in college they will teach you all this about how the bank works and also how the federal reserves work.

ON ATS I learned the federal reserves is a private organization yet in college they tell us it's a gov organization.

but in reaility it's a private organization that has a deal with the U.S gov that would give them the power to run the U.S economy.

The Federal reserves are the one that set's those % of what the banks have to have on hand at the bank.

Hope this gives an insight on how banks work.


Hope this helped somewhat.


Thanks for talking about GM lol, I live in Michigan and some retirees plan to sue GM and some want to go to detroit to smash the windows of the head quaters in detroit style.