YouTube transcript (T37YvxMTofc) — Transcript

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1. 0:00Stock represent ownership in a company.
2. 0:03Each unit of a stock is called a share.
3. 0:05If you own 50% of YouTube stock, you own
4. 0:07half of YouTube. Shareholder. Someone
5. 0:10who owns a stock. Stock exchange. Place
6. 0:13where investors can buy or sell stocks.
7. 0:15Public company. Company whose ownership
8. 0:18is organized via shares of stock that
9. 0:20are intended to be freely traded on a
10. 0:22stock exchange. Bull market. Bare
11. 0:24market. A bull market means that prices
12. 0:26are rising. A bare market means that
13. 0:28prices are falling. They are named after
14. 0:30each animals attack style. Volatility,
15. 0:34how fast the stock price moves up and
16. 0:36down. Volume, number of shares of a
17. 0:39company traded each day. Capital, broad
18. 0:42term that can describe anything that
19. 0:43gives value to its owners. It usually
20. 0:45refers to money, but it can also
21. 0:46describe machinery, patents, etc.
22. 0:49Liquidity, how easily you can get into
23. 0:51and out of a stock. It increases with
24. 0:53volume. Bubble. Bubbles occur when
25. 0:56prices for a particular item rise far
26. 0:58above the item's real value due to too
27. 1:00much optimism. Sooner or later, the high
28. 1:02prices become unsustainable and they
29. 1:04fall dramatically until the item is
30. 1:06valued at or even below its true worth.
31. 1:09IPO. Initial price offering happens when
32. 1:12a private company becomes publicly
33. 1:14traded in order to raise money.
34. 1:16Dividends portion of a company's
35. 1:18earnings that is paid to people who own
36. 1:20the stock. Not every company pays
37. 1:21dividends. Blue chip stocks. Stock that
38. 1:24comes from a well-known established
39. 1:26company. They have a strong history of
40. 1:28performance and often pay dividends.
41. 1:30Forex foreign exchange involves trading
42. 1:33different currencies. Portfolio.
43. 1:35Collection of investments owned by an
44. 1:37investor. Holdings. Contents of a
45. 1:39portfolio. Interests. When you get or
46. 1:42give a loan, the one who is lending the
47. 1:44cash usually wants more cash than what
48. 1:46he initially lent. The extra cash that
49. 1:48has to be given is called interest.
50. 1:50Bond. When an investor gives a loan to a
51. 1:52company or a government, the investor
52. 1:54earns through interest. Security.
53. 1:56Tradable financial instruments such as
54. 1:58stocks and bonds. Broker. Since you
55. 2:01can't directly go to the stock exchanges
56. 2:02to buy stocks, someone will do it for
57. 2:04you, usually for a fee. This is called a
58. 2:06broker. Nowadays, they are mostly online
59. 2:08platforms. Going long. Betting that a
60. 2:11company's stock's price will [music]
61. 2:12increase so that you can buy low and
62. 2:14sell high. Asset resource with economic
63. 2:16value that someone owns or controls with
64. 2:19the expectation that it will provide a
65. 2:20future benefit. Commodity basic goods
66. 2:23interchangeable between producers such
67. 2:25as grains, gold, beef, oil, and natural
68. 2:28gas. It usually refers to raw materials.
69. 2:31Yield, it's what you earned from an
70. 2:33investment. P ratio. The price
71. 2:35toearnings ratio is one of the most
72. 2:37widely used tools that investors and
73. 2:39analysts use to determine a stock's
74. 2:41valuation. It's one indicator of whether
75. 2:42a stock is overvalued or undervalued.
76. 2:45However, the PE ratio can mislead
77. 2:47investors because past earnings do not
78. 2:49guarantee future earnings will be the
79. 2:50same. Likewise, projected earnings may
80. 2:53not actually happen. Index. It's a
81. 2:55method to track the performance of a
82. 2:57group of assets. Indexes typically
83. 2:59measure the performance of a basket of
84. 3:00stocks intended to replicate a certain
85. 3:02area of the market. The most famous
86. 3:04index is the SNP500, which tracks the
87. 3:07500 largest US companies. Futures
88. 3:11contracts that obligate parties to buy
89. 3:13or sell an asset at a predetermined
90. 3:15future date and price. The buyer must
91. 3:17purchase or the seller must sell the
92. 3:19underlying asset at the set price
93. 3:21regardless of the current market price
94. 3:22at the expiration date. Options. Options
95. 3:25contracts give buyers the right but not
96. 3:28the obligation to buy or sell depending
97. 3:30on the type of contract and underlying
98. 3:32asset at an agreed upon price and date.
99. 3:34Call options allow the holder to buy the
100. 3:36asset at a stated price within [music] a
101. 3:38specific time frame. Put options, on the
102. 3:40other hand, allow the holder to sell the
103. 3:42asset at a stated price within a
104. 3:44specific time frame. ETFs, baskets of
105. 3:47stocks that trade like regular stocks.
106. 3:49They can be passively or actively
107. 3:51managed. Passively managed ETFs just try
108. 3:53to match the underlying stocks. Actively
109. 3:55managed ETFs have a manager or team
110. 3:58making decisions on what stocks to put
111. 3:59in the basket, IRA. It stands for
112. 4:02individual retirement account and it's a
113. 4:04long-term savings account that
114. 4:06individuals with earned income can use
115. 4:07to save for the future while enjoying
116. 4:09certain tax advantages. Liability,
117. 4:12something a person or company owes.
118. 4:14[music] Penny stocks, shares valued at
119. 4:16less than $5. They are usually
120. 4:18considered highly risky. Market cap, it
121. 4:21refers to how much a company is worth as
122. 4:23determined by the stock market.
123. 4:24Leverage. It refers to using borrowed
124. 4:26money from a lender to invest. It's done
125. 4:28to increase the potential return of an
126. 4:30investment. It also greatly increases
127. 4:32risks. Balance sheet. Financial
128. 4:34statement that reports a company's
129. 4:36assets, liabilities, and shareholder
130. 4:38equity at a specific point in time. It
131. 4:40provides a list of what a company owns
132. 4:42and owes as well as the amount invested
133. 4:44by shareholders. Inflation, a rise in
134. 4:47prices, which can be translated as the
135. 4:49decline of purchasing power over time.
136. 4:50Basically, money becomes less valuable.
137. 4:53Bid, the highest price at which a buyer
138. 4:55is willing to pay. Ask, the lowest price
139. 4:57at which a seller is willing to sell.
140. 4:59Bid ask spread the amount by which the
141. 5:01ask price exceeds [music] the bid price.
142. 5:03It has to be resolved before the
143. 5:05transaction can take place. Black swan.
144. 5:07It's slang for a completely unforeseen
145. 5:09and unexpected event. Dead cat bounce.
146. 5:12It's slang for a temporary short-lived
147. 5:14recovery of a stock price from a
148. 5:16prolonged decline that is followed by
149. 5:18even more decline. Wales. It's slang for
150. 5:21investors or corporations with such
151. 5:23large capital that their buys and sells
152. 5:25make waves in the market like only
153. 5:26animals of gigantic size can. Unicorns.
154. 5:30Startups that have come to be valued at
155. 5:321 billion or more. Named like this for
156. 5:34their incredible rarity. To the moon.
157. 5:37It's slang for a stock or asset rising
158. 5:39in price stratospherically, often
159. 5:41quickly. Tanking. The opposite of to the
160. 5:44moon. Stocks depreciating in value often
161. 5:46quite significantly and quite quickly.
162. 5:49jigged out. When a market moves into an
163. 5:51unfavorable position and you close out
164. 5:53your trade only for the market to rally
165. 5:55into a position where you would have
166. 5:56made a profit or at least not a loss.
167. 5:58Pump and dump. Form of fraud that
168. 6:01involves artificially inflating the
169. 6:02price of an owned stock through false
170. 6:04and misleading positive statements.
171. 6:06Pump. In order to sell the cheaply
172. 6:08purchased stock at a higher price, dump.
173. 6:11Once the operators of the scheme dump
174. 6:13sell their overvalued shares, the price
175. 6:15falls and the other investors lose their
176. 6:17money. Rugpull. a pump and dump in new
177. 6:20small cryptocurrencies, usually done by
178. 6:22their creators. Panic selling,
179. 6:24widespread selloff of a stock, a sector,
180. 6:26or an entire market due to fear or
181. 6:28overreaction rather than reasoned
182. 6:30analysis, usually happens when prices
183. 6:32start to decrease a lot, which makes the
184. 6:34price decrease even more. Stock
185. 6:36exchanges temporarily halt trading when
186. 6:38panic selling reaches a specified level
187. 6:40in an attempt to break the cycle of fear
188. 6:42and selling. Shorting investment
189. 6:44strategy that speculates on the decline
190. 6:46of a stock's price. The investor borrows
191. 6:48shares of a stock from a lender and
192. 6:50instantly sells them. When it's time to
193. 6:52give them back, the investor has to buy
194. 6:53back the shares to reive them to the
195. 6:55lender. If the price has gone down, he
196. 6:57keeps the difference between the initial
197. 6:59price and the new price. This, however,
198. 7:01comes with unlimited risk as the stock
199. 7:03price can go up infinitely and the
200. 7:05investor is forced to buy it back. Short
201. 7:07squeeze. When the stock's price
202. 7:09unexpectedly increases drastically over
203. 7:11a short period of time, the investors
204. 7:13who were shorting are forced to cut
205. 7:15losses by exiting their positions, which
206. 7:17means buying back the stocks to regive
207. 7:19them to the lender. This makes those
208. 7:20investors lose money, and it makes the
209. 7:22stock's price increase even more since
210. 7:24all of the short investors have to buy
211. 7:26it. Limit order. It's an order to buy or
212. 7:29sell a stock at a specific price or
213. 7:30better. Stop-loss order. Order placed to
214. 7:33buy or sell a specific stock once the
215. 7:35stock reaches a certain price. Long
216. 7:38squeeze. Basically the same thing as the
217. 7:40short squeeze, but those who are going
218. 7:42long get squeezed. This is usually
219. 7:43caused by the trigger of many stop-loss
220. 7:45orders and by people panic selling.
221. 7:47Market order. It's an order to buy or
222. 7:50sell a stock at the best available price
223. 7:52in the market. It typically ensures
224. 7:54execution, but it doesn't guarantee a
225. 7:56specified price. It's kind of like
226. 7:57buying a product without negotiating.
227. 7:59Good till canceled order. It's an order
228. 8:02to buy or sell stock that lasts until
229. 8:04the order is completed or cancelled. Day
230. 8:06order. It's an order to buy or sell a
231. 8:08stock at a specific price that expires
232. 8:10at the end of the trading day if not
233. 8:12completed. Averaging down. It's a
234. 8:14strategy that involves a stock owner
235. 8:16purchasing even more stocks when the
236. 8:18price drops. As the name says, it
237. 8:20decreases the average price at which the
238. 8:22investor purchases the stock. Fading. A
239. 8:25trader who deliberately goes against
240. 8:27market sentiment or trends. Hedge fund.
241. 8:30limited partnership of private investors
242. 8:32whose money is managed by professional
243. 8:33fund managers who use a wide range of
244. 8:35risky strategies to earn above average
245. 8:38investment returns. They usually require
246. 8:40a high minimum investment or net worth
247. 8:42and they often target wealthy clients.
248. 8:44Mutual fund. They pull assets from
249. 8:46shareholders to invest in stocks. They
250. 8:49are operated by professional money
251. 8:50managers who allocate the funds assets
252. 8:52and attempt to produce gains for the
253. 8:54funds investors. Mutual funds give small
254. 8:56or individual investors access to
255. 8:58professionally managed portfolios. Each
256. 9:01shareholder therefore participates
257. 9:02proportionally in the gains or losses of
258. 9:04the fund. Control stock refers to shares
259. 9:07owned by major shareholders of a
260. 9:09company. These shareholders will have
261. 9:10either a majority of the shares
262. 9:12outstanding or a portion of the shares
263. 9:14that is significant enough to allow them
264. 9:15to exert a controlling influence on the
265. 9:17decisions made by the company. Holding
266. 9:19company. Businesses that don't produce
267. 9:21or sell anything, but they hold the
268. 9:23controlling stock in other companies.
269. 9:25The companies owned by a holding company
270. 9:27are called subsidiaries. While it may
271. 9:29oversee the company's management
272. 9:30decisions, it does not actively
273. 9:32participate in running the day-to-day
274. 9:34operations of its subsidiaries. Index
275. 9:36fund type of mutual fund or ETF with a
276. 9:39portfolio constructed to match or track
277. 9:41the components of an index such as the
278. 9:43S&P 500. Day trading. It's a fast-paced
279. 9:47trading strategy where individuals buy
280. 9:49and sell stocks within the same trading
281. 9:51day. The primary goal of day traders is
282. 9:53to profit from short-term price
283. 9:55movements. Swing trading. Swing trading
284. 9:57is a mediumpaced trading strategy with
285. 10:00trades that last from a couple of days
286. 10:01to several months. The goal is to profit
287. 10:03from an anticipated price move.
288. 10:05Intrinsic value. Measure of what an
289. 10:08asset is worth. It's usually different
290. 10:10from the current market price of that
291. 10:11asset. Book value. It's the value of a
292. 10:14business according to its books. It
293. 10:16theoretically represents what investors
294. 10:18would get if they sold all of the
295. 10:19company's assets and paid all its debts.
296. 10:22While intrinsic value takes into account
297. 10:24estimates for the future, book value
298. 10:26only measures the present. Price-to-book
299. 10:28ratio. It compares a share's market
300. 10:30price to its book value. Value
301. 10:32investing. It's a trading strategy that
302. 10:35involves picking stocks that appear to
303. 10:36be trading for less than their intrinsic
304. 10:38or book value. Value investors usually
305. 10:41believe that the market overreacts to
306. 10:43good and bad news and buy stocks that
307. 10:45they think the market is
308. 10:46underestimating. Growth investing.
309. 10:48Growth investors typically invest in
310. 10:50young and small companies whose earnings
311. 10:52are expected to increase at an above
312. 10:54average rate compared to the market.
313. 10:55This can provide better returns, but it
314. 10:57also often comes with more risk.
315. 10:59Earnings per share. It indicates how
316. 11:02much money a company makes for each
317. 11:03share of its stock by dividing its net
318. 11:05profit by the number of common shares it
319. 11:07has outstanding. Technical analysis.
320. 11:10It's a trading strategy employed to
321. 11:12identify trading opportunities by
322. 11:14analyzing statistical trends.
323. 11:16Fundamental analysis. Fundamental
324. 11:18analysts identify trading opportunities
325. 11:20by analyzing the actual factors of the
326. 11:23company such as its competitors, its
327. 11:24management effectiveness, the state of
328. 11:26its industry, etc. Efficient market
329. 11:29hypothesis. It's the hypothesis that
330. 11:31share prices reflect all available
331. 11:33information making it impossible to beat
332. 11:35the market consistently. Supply and
333. 11:37demand. Supply refers to the quantity of
334. 11:40a good or service available while demand
335. 11:42is the quantity that people want. If
336. 11:44demand is high and supply is low, prices
337. 11:46tend to rise. If supply is high and
338. 11:48demand is low, prices tend to fall.
339. 11:50Insider trading. It's the activity of
340. 11:52trading in a public company's stock by
341. 11:54using information that is not available
342. 11:56to the public. This information is
343. 11:58usually gathered from employees of that
344. 11:59company, managers, etc. This is illegal
345. 12:02most of the time. Ticker symbol. It's
346. 12:04just an abbreviation used to uniquely
347. 12:06identify publicly traded companies.
348. 12:09Compound interest. It means earning
349. 12:11interest not just on your original
350. 12:12investment but also on the interest you
351. 12:14earned over time. This creates an
352. 12:16exponential curve of earnings over long
353. 12:18periods of time. Profit margin. It's the
354. 12:21percentage of profit a company makes
355. 12:22from its revenue after subtracting all
356. 12:24of its costs. Dollar cost averaging.
357. 12:27It's a strategy that consists of
358. 12:29investing a fixed amount of money at
359. 12:31regular intervals regardless of the
360. 12:32asset's price. This helps reduce the
361. 12:34impact of market volatility. Return on
362. 12:37investment.