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How The Stock Exchange Works (For Dummies)

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Why are there stocks at all? Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl! Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science. We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :) We're a bunch of Information designers from munich, visit us on facebook or behance to say hi! https://www.facebook.com/Kurzgesagt https://www.behance.net/kurzgesagt How the Stock Exchange works Help us caption & translate this video! http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2
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Text Comments (2819)
Darkstealthgamer (1 day ago)
...so its not a place where people trade socks? where do I sell my socks then? no wonder the great depression happened
bhuiyan imam (1 day ago)
For anyone who didnt get it, watch 'The wolf of Wall-Street'. even though it was kinda vulgar, it explained things like IPO and how the stock market worked pretty nicely.
CactusGaming YT (2 days ago)
*THIS WEEK, ON HERMITCRAFT:*
school projects stuff...
yu1604 (10 days ago)
0:08 - that looks like a tesseract (although it probably is not)
Junaeid Shadib (11 days ago)
Thank you for this video
Bill Schlafly (12 days ago)
Stocks are a form of currency printed by the company. Caveat emptor.
동동동 (13 days ago)
Better : a confusing and mediocre explanation of how the stock exchange kind of works.
PuZZled (14 days ago)
2 things i dont get: What does a company gain from people buying shares How would someone sella share to someone to make a profit. Like who is gonna buy a share at its most expensive price
Nice meme (5 days ago)
the company sells shares because they get money from selling them, (they use the money to expand the business) The reason people buy shares when they are high priced, is when the demand is high for a stock, the price rises so its because lots of people want it, that it gets expensive
Wojtek The Bear (13 days ago)
Remember: A share of a company's stock representatives part ownership in the company. Owning a share of Microsoft means your own a part, however small, of the company. By selling shares of stock, a company is essentially selling off ownership of it in order to acquire interest-free funds it can use to invest in ventures to increase profits. It's another way for companies to get funding. Also, remember that the stock market is determined solely by supply and demand. The price of a stock is at a certain price solely because enough investors are willing to buy it at that price. Why is it at that price? Usually it's based on the company's expectations. If a company is growing faster than expected, that means the pie you own a chunk of just got bigger, so your share of stock just became more valuable. Because of it people are willing to pay more for it.
laken marion (16 days ago)
invested in forex/binary and its going so well for me with the help of Mrs Ryan a very good and caring woman
Grant Cardone (16 days ago)
she is a busy and principled woman ...rewrite your mail again this time make it more official, hope this works thanks
BINARY OPTION REVIEW (16 days ago)
she is not replying to my mails!! somebody tell me why please ,i my doing something wrong ?
Grant Cardone (16 days ago)
Mrs Ryan turned my $8,500 to $25,000 in just 1 week , she is a smart trader indeed
luke millard (16 days ago)
Mrs Ryan is such a calm spirit,she is the best to trade with as a beginner ,,,very smart woman
Money Aur Maza (16 days ago)
Stock Market is a place where you can create your wealth and multiply your wealth
Mirr & Bree (17 days ago)
so if I buy a share and the company does well then I can sell the share I bought to someone else for money??? is that right. basically im buying a piece of a company so just in case they excel I can sell it to someone in there moment of shine?
Wojtek The Bear (13 days ago)
Yep. The company might also decide to give some of its uninvested funds to its shareholders, so you can also make money that way. It would be over a very long term though.
TheMetaright (21 days ago)
This video does a very poor job, honestly.
Cindy Victoria (24 days ago)
IM 15 WHY AM I HERE
UNKNOWN NETWORK (27 days ago)
Your mom is dummy
👌
SpaceOrca (28 days ago)
I know how rocket science works and I still can’t even comprehend the basics of goddamn economics. Let’s just go back to bartering for goods so everything is simple enough to actually understand.
Wojtek The Bear (19 days ago)
But one of the fundamentals of economics (at least monetary economics) is that bartering is bad because of the double coincidence of wants problem....
Mahad Ahmed (28 days ago)
Just the word stock confuses me
Wojtek The Bear (19 days ago)
Don't put too much stock in it.
Hiren Patel (30 days ago)
This is a very stupid video, it does not explain how a stock exchange works, it can't be explained in a three minute video, he must have explain how a trade goes through and what it represents , how did you create a video in which you yourself wasnt a expert.
SwordGamez (30 days ago)
i still don't understand
Elijah Murphy (1 month ago)
Lmao this video makes no sense but ok
Harry Scott (1 month ago)
Binary/iq option forex trade is greatly profitable, when you are able to compare market analysis with trading signals quantifying with good strategy like Dr Frank Robert strategy/technique and amazing Software that gain you an access into a winning point, this analysis contains trading point and you compare this points to the time your software generates a trading signal, and if they correspond at a particular point then you make a trade. it is a very efficacy and elaborate way to trade and i make a great winning with such, it is part of Dr Frank Robert strategy and techniques which he is using to trade for me and i have learned from him very much.
Mattox Akira (1 month ago)
I'm not a dummy
Purple Turtle (1 month ago)
its not that hard to understand
brod2man (1 month ago)
I don't get it, and yet I still invest in shares
Bill Strathearn (1 month ago)
The stock market is a non-randomized gamble. Got it.
Wojtek The Bear (19 days ago)
It actually is mostly randomized. The change in stock prices is designed mainly by how well a business meets its economic projections. Since the projections are based on the business' previous performance, it's about a 50/50 shot they'll meet the expectations or not.
Dalem Silas (1 month ago)
Summary: globalized gambling.
*huh*
TheCommentBeatKiller (1 month ago)
A bunch of fake numbers that value a company based on arbitrary things.
daniël Crisafulli (1 month ago)
And how they shape me they meen they make me first years afraid and tell me everything what not to do what I normal do when I afraid and to ask help but they let me hear and see that nothing help the last six years from they begin and nothing understand why they do this and they lie when they say that my life whas nothing because I go before always to disco bars and bands and to musicians and a man that give me the idea to interest in what I can about my music and fast later he do nothing to let me make performances and say all so not to need in this world guitarist and I play as all so on you tube “Rock Sitar” and this all so one off my music creative creations and every one around me let me feel or they like it and out the door they dancing and listen to me and enjoy me and only that a other person say before I start to stand up while I always when I come to visit here and here friends the performance and heAr that they jealous only that I can play well music and in Spain they like it all so but before I play one time with family they let me feel first or I a basted and this is not thru but they do this to let me feel or I shame for what I can and between other people they do or I do strange and not understand that they like it and play or they love me when I in a restaurant play that the people there don’t understand why I not happy while they do or they like it and before every time every thing do before I come with family party in the day program and not tell me before how late I come for the follow as The bowling to grow to this years they play or I always a editute while this is what they want that it seems to shame not how they do always to me and let everyone do this and never let me feel or I part off the group or not to give me input as they do to other people to let me shame while I do nothing wrong and don’t want that I work. And many people they like me they telling lies to let them believe and shame for what they need to shame that they do this. And A man as Hennie do terrible lies and even when I flight when I 24 years to take him out my house he like it and laughing even when He ho eith his head to the ground he stay in my house and my mother drive in his old care or almost the same when she visit me and now he chance the thru or I need him beqause when I ask him and say years a go that people do or they kill me he begin to touch me all so while I fight he don’t stop to try so sick is Hennie and this is what many know one know from him. My neighbour on the other side trick crazy story's amd O hear she make when I can not sleep and or little bit higher temperature a extra douch and I hear she make from this stupid lies and when people believe this people, then they make a lie bigger and this they do many years to people and all so to other people some one let me hear this this moment and say to e plain in English beqause I not stupid but a man that say that he want do something terrible only before coming out that I never lie and well helping people other wise I don't explain that they need to help all so people that I only hear around my house as a women behind my house and this is why people they now me help me when some one do to me and then later that I don't need to see this or I can't see things when something happen and this is narsistic hypocrisy beqause I not a little child but so they do every time to me and this is why I not let me use when I know before that they not take me serieus and lie about me beqause a man need to shame his self very hard and when I say who then they make it my problem while nothing happen but only make lies to me to make a reason to take me to hold secret for what they do and I man that never see me speak only lies about me while every one they know me know that I always very good to believe and a good person in my heart and nies as they say when a person have a great worth wide heart for other people and think only to hear about a boy or I now how he is or whas and see as child two times and lie to go some where and go direct on the monent when he arrive and hear people shout to this boy that he is bad In heart and nees and play later when I old or he is me and that a man always swallow with his hands when peope got interest in me and my neighbour later come with a boy that I never see or hear is the person that lives and paint his hair or in the time that I live in a clinic so that they can play shows how it ever whas and nothing is real and the most people believe a man that stalk me when I live hear when I young and do this or must do this beqause he is afraid that comes out that he always play theater as he do all so to me when he not want from my chair and play or he go to roll with his eyes only to let me sitting him in my house and so many years he stalk me and my mother play with this man to never visit me to never visit me when O ask this and that he go out my house and in one time he all so lie or he always drive for me 24 years 18 years a go while he almost cry when I not want to drive with him to but what he need and make and theater three days a go again or I need him and To hear all so that he do this no all so from my sister and this is why he drive to Oudbijerland 10 minutes a go while he know that I have know traffic to follow to stop wrong people they lie and fast enough and hear him speak when I speak ast his house or I a dick while every one like him or do friendly from the money that he visit me while he was the crazy man off the village or town and his neighbour day this ever to me that when he whas not dangerous long before they in a crazy house but how he act and lie is well dangerous for me and my family I hear
daniël Crisafulli (1 month ago)
And A man as Hennie do terrible lies and even when I flight when I 24 years to take him out my house he like it and laughing even when He ho eith his head to the ground he stay in my house and my mother drive in his old care or almost the same when she visit me and now he chance the thru or I need him beqause when I ask him and say years a go that people do or they kill me he begin to touch me all so while I fight he don’t stop to try so sick is Hennie and this is what many know one know from him. My neighbour on the other side trick crazy story's amd O hear she make when I can not sleep and or little bit higher temperature a extra douch and I hear she make from this stupid lies and when people believe this people, then they make a lie bigger and this they do many years to people and all so to other people some one let me hear this this moment and say to e plain in English beqause I not stupid but a man that say that he want do something terrible only before coming out that I never lie and well helping people other wise I don't explain that they need to help all so people that I only hear around my house as a women behind my house and this is why people they now me help me when some one do to me and then later that I don't need to see this or I can't see things when something happen and this is narsistic hypocrisy beqause I not a little child but so they do every time to me and this is why I not let me use when I know before that they not take me serieus and lie about me beqause a man need to shame his self very hard and when I say who then they make it my problem while nothing happen but only make lies to me to make a reason to take me to hold secret for what they do and I man that never see me speak only lies about me while every one they know me know that I always very good to believe and a good person in my heart and nies as they say when a person have a great worth wide heart for other people and think only to hear about a boy or I now how he is or whas and see as child two times and lie to go some where and go direct on the monent when he arrive and hear people shout to this boy that he is bad In heart and nees and play later when I old or he is me and that a man always swallow with his hands when peope got interest in me and my neighbour later come with a boy that I never see or hear is the person that lives and paint his hair or in the time that I live in a clinic so that they can play shows how it ever whas and nothing is real and the most people believe a man that stalk me when I live hear when I young and do this or must do this beqause he is afraid that comes out that he always play theater as he do all so to me when he not want from my chair and play or he go to roll with his eyes only to let me sitting him in my house and so many years he stalk me and my mother play with this man to never visit me to never visit me when O ask this and that he go out my house and in one time he all so lie or he always drive for me 24 years 18 years a go while he almost cry when I not want to drive with him to but what he need and make and theater three days a go again or I need him and To hear all so that he do this no all so from my sister and this is why he drive to Oudbijerland 10 minutes a go while he know that I have know traffic to follow to stop wrong people they lie and fast enough and hear him speak when I speak ast his house or I a dick while every one like him or do friendly from the money that he visit me while he was the crazy man off the village or town and his neighbour day this ever to me that when he whas not dangerous long before they in a crazy house but how he act and lie is well dangerous for me and my family I hear
whau (1 month ago)
X
Nikhil Bhaskar (1 month ago)
Good one
Eason Chen (1 month ago)
What is bubble coffee
awashlv A (1 month ago)
This video must be for dummies and not for dummers😷😷
Sami Mohr (1 month ago)
hahaha Döner Inc. I almost missed it
Kenneth (1 month ago)
I keep hearing the fucking numbers!
BABY FACE (1 month ago)
So the more people invest the higher the value and I do understand the last part about bubble
Buttery Skater (1 month ago)
This shit is not for beginners. I trade stocks and i got it, but only because i know how the market works.
sarp doğru (1 month ago)
That's why stockbrokers became stockbroker cuz they are bridge between rich and poor we are live in the world that stockmarket rule so till last company they always find a way to make money
kristoffer kulju (1 month ago)
No birds yet
Sheila Katz (1 month ago)
But what do people who buy shares get other than a share of a company?
Wojtek The Bear (19 days ago)
That's like asking what someone who buys a can of soda gets besides the soda. The share is the thing they're buying; that's it. A share of stock is a physical representation of a part-ownership of a company, so owning a share of stock means you own part of a company. Granted, this part is usually extremely small. For instance a company like Microsoft has billions of shares outstanding, so you wouldn't even own a percent of a percent, but you still own part of the company, Otherwise some companies can pay dividends, which is basically any profit a company has leftover after reinvesting it. This money can be given to the shareholders as a dividend.
Ariana Valle (1 month ago)
This video makes me want to end my life
jacob lester (1 month ago)
Yes but how does short selling work? That’s the confusing one for me
Wojtek The Bear (19 days ago)
The philosophy behind shortselling is that the stock trader believes that the stock price for a certain company will fall for whatever reason. So if Company A's stock price is $30, I might believe that the company's stock price will fall to $25 in two month's time and decide to do something about it. Basically shortselling is selling stocks you don't have. Say I work at an investment bank and three of my clients have 50 shares in Company A. That means my bank owns at least 50 shares of company A's stock which we hold for said clients.....except the bank doesn't actually have to hold the stock at all times. As long as the bank has the funds to acquire the stock after their client decides to do something with it, they're golden. So, me, Mr. Investment banker, believes that Company A's stock is going to drop $5 in two months time. What should I do? Well, instead of taking (what I believe will be) a guaranteed loss, why not just sell the 50 shares now at $30 and then buy them back two months later at $25. That way the bank makes a profit of $5 a share, or $250, which we can reinvest. That's all shortselling is. Selling stock you don't technically own with the aim of buying the stock back later at (hopefully) a discounted price. Note: Beginners should almost NEVER try to shortsell a stock as they fail more than they succeed. Due to the nature of economies, stock prices generally increase in value, so betting on a decrease is betting against the odds. Moreover, you can take a huge hit if the stock price raises in value as then you are liable to buy back the stock at an increased price. If company A overperformed and their stock price increased to $35, the investment bank would be forced to take the hit themselves and pay $250 more to acquire shares they should've owned in the first place.
Maryam Sofea (1 month ago)
*video ends* What?
Daniel Song (1 month ago)
TACOS!!!
LIITEMIES (1 month ago)
now trow in treshold of company running on its own. ibm and start benefits. what works :D btw 1 yer in showign the stock value on common basics. not getting flash blinded.
söis olla mutsi (1 month ago)
just watched this bcs got a test of it on friday
Keshav Nagar (1 month ago)
I'm officially a dummy now
Sunny shah (1 month ago)
This is what School and Educational institutions should be teaching the young population. The reason 78% of the people are living paycheck to paycheck, at least here in the US, and why 75% of people all over the world hate their job, all comes down to Money. People don't know how to generate more money. People can only make money by giving their hours to a job, and in return, they get an hourly rate. But, what people don't realize is, that they can be making money, without giving their hours, and time, you can be making money in your sleep. This is where Stock Market comes handy, you buy Commodities, Shares, or if not stock market, you can invest in Real Estate, and there are companies out there who can do the investing for you. It's called Mutual Funds. You need to know how the market works, what companies are listed on the stock exchange, which companies are going to release IPO, etc. Investing in yourself and investing your money is the best thing you can do for your self. Stop relying on just hourly wages to make money, start investing money, and learn about investing, there are tons of free books on the internet, and also videos that teach you all of this. Instead of going to parties, or watching movies, or TV in your free time, spend that time to learn about investing.
КоТэ (9 hours ago)
Sunny shah I agree
Lzaer Light (1 month ago)
I’m a dummy
Arising-Tale (1 month ago)
shares contracts and property are too abstract for most of humanity which is made up of low iq savages trololo
R S (1 month ago)
I don't have many options being tattooed at 38 to start some insane fast income with no computer skills.
R S (1 month ago)
told you trucking was my only option to fix it. but fucked it up for a few years. after that it's fixed so shit the fuck up about it.
R S (1 month ago)
you know my debt? we know. it's also why I gave y3ars ago for the 20th time and decided to help my mother and only that with my high paying jobs for the past 8 years
R S (1 month ago)
I don't do stocks I don't do much other that pick up trash. filled 15 bags today. and what's your deal with eBay
Tamil Stock Market (1 month ago)
Very useful video. Thanks
Hà My Trần (1 month ago)
Which application will hepl me to make one video like that?? Thanks
Carlos H (1 month ago)
I have a question, anyone feel free to answer please. So the other day The TESLA stock went down by a lot because elon musk smoked. so my question is, HOW MANY PEOPLE DOES IT TAKE TO CHANGE A STOCK? I know that shareholders sell their stocks but I mean how many does it take to make such a dramatic drop in price like the Tesla one did for example.
Wojtek The Bear (1 month ago)
It depends on the company. Some companies, like Microsoft, have billions of shares outstanding, so 100 people selling their shares on the stock market isn't going to change much. Others will have only tens of thousands of shares outstanding, so 100 people selling their shares would effect the price more. Keep in mind though that the shareholders selling their shares was not the root cause of the issue. The root cause of the issue was that people's expectation in Tesla fell. In this case it was because some people lost faith in the leadership of Elon Musk. The CEO of a company always has a large effect on the company's stock price because the company's expectations come from their performance.
Danny Sullivan (1 month ago)
Love the Chipotle and Starbucks references
NIIIIQQ (2 months ago)
Do you use Robinhood? Its a free app/site it has No fees on buying and trading stocks or anything it's a great place to start out. Look it up it has great reviews you don't need to pay a middle man you are your own stock brocler. Lol if you decide to sign up hit me up for my referral code. If you use it when you sign up we will both get a free random stock :)
Michael_C (2 months ago)
Why would you want to buy shares in the first place as an individual? So you can get like, ten more dollars over 3 years?
Wojtek The Bear (1 month ago)
Whitninjathemovie  An increase in share price? That's not what interest is. Interest is the percentage extra on a loan or bond the recipient of the loan has to pay in a given amount of time. So a 7% annual interest rate on a loan of $100 would give an interest of $7.00 at the end of the year.
Whitninjathemovie (1 month ago)
+Wojtek The Bear 1:07 to about 1:19 what is that price increase called?
Wojtek The Bear (1 month ago)
Whitninjathemovie  Compound interest isn't a thing when talking about stock. No one earns interest on shares.
Whitninjathemovie (1 month ago)
Compound interest
Wojtek The Bear (2 months ago)
So when the company grows your share grows value. If I owned a one percent share in a $500 company, my share's worth would be $5. If the company then grew into a $1,000 company, my share would be worth $10. I just made money.
Código Trading (2 months ago)
Te felicito por el video, muy interesante para aquellos que se inician. Ha sido una inspiración para mi canal, donde acabo de colgado un video hablando de cómo funciona la bolsa. Saludos
GGC_ (2 months ago)
Understood it. Thanks.
Filip (2 months ago)
So how much shares does one company have?
Wojtek The Bear (2 months ago)
However many the CEO and Board of Directors want. Huge companies like Microsoft have trillions of shares, while smaller or more restrictive companies will have much less.
Ty Will (2 months ago)
Enjoyed a ultra simple but summorized breakdown... Not easy in three mins...
Joe Mama (2 months ago)
Is there a video for retards?
asdawece (2 months ago)
have you noticed taco company became "döner" company :) 02:17
jond2614 (2 months ago)
So ... Gambling without cards or slots.
NIIIIQQ (2 months ago)
Do you use Robinhood? Its a free app/site it has No fees on buying and trading stocks or anything it's a great place to start out. Look it up it has great reviews you don't need to pay a middle man you are your own stock brocler. Lol if you decide to sign up hit me up for my referral code. If you use it when you sign up we will both get a free random stock :)
TrippTheTripper (2 months ago)
Ok I have a Question to Ask..Because im still kind of CONFUSED..Lets say i buy $1000 worth of shares for a company and its doing real good for like a month.Then it drops for a day then the next its back to doing good.Will I still have My $1000 worth of shares with that company or will i have lost it when it dropped for that day?
Wojtek The Bear (2 months ago)
You'll still have your $1,000 worth of shares. Think of it as a physical good like an apple. One day you go to the store and buy an apple for $3.00, meaning the market value of the apple is also $3.00. The next day a new harvest comes in and the price of the apple, and therefore its market valuation, falls to $1.50. The day after a huge tornado hits and the price, and market valuation, jumps to $5.00. Is the apple you bought before at $3.00 now worth $5.00? Of course! It's the same for stocks on the stock market.
Amy Cooper (2 months ago)
i can understand it in the context of needing momentum for transitory periods like when a little company needs a leg up, uhh and for status but i feel like im missing out on the over arching meaning? is it just for some reliable currency?(sorry..)
Amy Cooper (2 months ago)
ohhhhh ok. thank u
Wojtek The Bear (2 months ago)
Well these transitory periods are more permanent than you give them credit for. Businesses are always looking to expand their business and make more money. It's the whole reason they were conceived in the first place. To this day companies like Microsoft and McDonalds, companies already well built into our economy, are funding new R&D projects, expanding into new regions, diversifying, etc. One way to get these funds without having to take out a loan is through issuing stock. So issuing stock is a reliable, almost no string attached, way of acquiring funds for new projects and ventures.
Amy Cooper (2 months ago)
unless u only sold it to people u thought would raise profits beyond what ur capable of alone?
Lo Low (2 months ago)
I am not a dummie motherfricker
Mohamed Ali (3 months ago)
Nop, still don't get it
Bombdabomber963 (2 months ago)
Basically, you give the company money now, so they can use it now, and in return they give you a share, which is basically a right to recollect that money whenever you want. When they start doing really well, you can tell them that you want your money back, but because they are doing so well that share is now worth more, so they pay you more. (Essentially, you buy part of a company, and if the company grows, so does your part.)
vijay chauhan (3 months ago)
i like this.
Akın Yaman Altın (3 months ago)
thanks :)
Film inc (3 months ago)
So this basically is a psychological game of how people think about a company, the better the people think about it the more its worth. If you buy at a time before the peak of hope and sell at its highest youre good. Or am i speaking complete nonsense now?
Into the Unknown (2 months ago)
Yes, it is kind of that, you have to make the right guess, which company shares will rise in the future, buy low and sell high. If you do it in one day, you are called day trader, if you do it in 2 days to 3 weeks you are called a swing trader and if you do that in months or an year you are called a position trader. Share prices keeps moving up and down and you have to capitalize on this fluctuations.
Wojtek The Bear (3 months ago)
Nah, you're pretty on point with what you said.
TheRealNoodles (3 months ago)
A lot of people seem to think that when they buy stocks, they help the company get capital so it can grow. That only happens when they do Initial Public Offering. Stock markets only really exists to help investors get rid of unwanted stocks by selling them to someone else. It does not help the company get capital for investments.
yes tru
GrifGrizzly (3 months ago)
Yeah I still don’t get how it works
Into the Unknown (2 months ago)
Shareholders can never ask their money back, its up to the board of directors to determine the dividend payout policy.
Bombdabomber963 (2 months ago)
Basically, you give the company money now, so they can use it now, and in return they give you a share, which is basically a right to recollect that money whenever you want. When they start doing really well, you can tell them that you want your money back, but because they are doing so well that share is now worth more, so they pay you more. (Essentially, you buy part of a company, and if the company grows, so does your part.)
Into the Unknown (3 months ago)
Its simply a place to exchange shares, people who are interested in buying and selling collect there and buy and sell shares of corporations.
faisa abdirahman (3 months ago)
Like slaves or ?
Silent Rose (3 months ago)
so there are 5 mil dummies who watched this video xD
Praeygon (3 months ago)
WHY DO PEOPLE BUY STOCKS, WHY DO THEY EVEN EXIST IT MAKES NO SENSE TO ME AT ALL. YOU AREN'T EVEN BUYING ANYTHING. EVEN THE STEAM COMMUNITY MARKET MAKES MORE SENSE
Into the Unknown (3 months ago)
Companies needs to raise money to grow and expand, to raise that money they issue share, people give money to a company and get shares from them, owning shares means that they are now part owner of them company, for example, if john owns 5 shares of a company called tyx, and the company tyx has a total of 200 shares, then john is 2.5 % owner of the company, and the company tyx has to give 2.5% of the annual profit to john.
Praeygon (3 months ago)
Stock Market Analyst yep that's it. Thanks for helping me brainstorm
Praeygon (3 months ago)
I understand owning a stock means you own a portion of a company, but I really don't understand their place in the world. I guess it's a mutual benefit type thing? The company sells the stock to make money from people who buy it, and the people who buy it do so in hopes the company will make even more money which in turn will result in them getting more income as well. That's the basic jist of it I guess?
Stock Market Analyst (3 months ago)
Praeygon stocks are like a part ownership in a company, people buy share to get profits and if they think a company may fail, they sell those shares to others.
Here's an explanation to help you better understand: 1. A stock is a piece of ownership in a company. 2. These stocks can be easily bought and sold on the Internet. So the general public can buy and sell pieces of ownership in the underlying companies. The stock price is determined by people's estimate of the value of the underlying company they're buying. The value of the underlying company is based on how much money the company will make from selling its products. So if a company is worth $100 million and it has 100 million shares, then each share is worth $1.00. But no one in the market knows that it's worth $1.00 for sure because no one knows definitively how much money a company will make in the future. Right? No one can predict the future, so no one knows the price for sure. So people do their analysis hoping to buy the stock at a price lower than what the company's worth (that way they get more money than what they paid for). But people's assessments change over time, so they might increase / decrease what they're willing to pay. This causes a change in the stock price.
Chris Good (3 months ago)
If I bought Michigan bell which is now AT&T 60 and sold it today what is it potentially worth
Chris Good (3 months ago)
If I bought Michigan bell stock in 1960 and sold it today what is it potentially worth
Preston Garvey (3 months ago)
*PRO TIP:* Do *NOT* buy from Taco inc.
Patrick Lewis (3 months ago)
I'd love for you folks to re-visit this topic and explain what the value of having a stock exchange and shares in a company actually is. I mean, yes, there's the claim about it providing a company with money to expand and such, but being beholden to completely disinterested shareholders seems to be the primary source of cutting every corner possible, cheating when no one is looking, and generally ruining the whole point of the business in order to feed money into the pockets of people who can barely be expected to know what the company does. Like so many things in the world, it seems like something that gives a decent benefit in the short-term and completely ruins itself over any appreciable length of time, but I'd love for someone to demonstrate otherwise.
Patrick Lewis (3 months ago)
Wojtek The Bear It's that "efficient allocation of profits" part that has me tripped up. When US corporate taxes took almost all profits, companies invested into new tech, new resources, higher wages, and similar. With no pressure as tax rates have been slashed and ways to avoid paying have increased, the business of business appears to no longer be to produce a good product or provide a good service, but mostly to line the pockets of the board and shareholders. But that's a bit ancillary to what I was originally asking. Being able to buy and sell stock is a short term cash infusion, but it comes with massive long term problems. Shareholders aren't concerned that Ford makes a good car, just that they produce a constantly increasing profit so they can collect dividends. From the point-of-view of the investor, that's logical, but it is a problem for good business practices. Even just a rumour that profits will diminish in a given quarter can tank a stock price and hugely impact the success and longevity of the company. What's the long term benefit of being beholden to predators and parasites?
Wojtek The Bear (3 months ago)
The function of a company is to suit a societal need profitably. That's it. They can due this through production or a myriad of other ways. And no investor just buys and sells stock for no particular reasons. They buy shares because they believe the share is undervalued. They sell shares because they believe it is overvalued. That is 95% of transactions on the stock market. All shareholders also want to see their stock price grow up as that is their man source of profit when speculating on stocks, so, therefore, it is no different from a share of stock never changing hands. Either way the one holding it wants the company to grow through an efficient allocation of its profits. Otherwise, you're not exactly wrong....If you limit the scope we're looking at.
Patrick Lewis (3 months ago)
Wojtek The Bear The issue, in my mind, is that the function of a company is to produce. Profit, especially for someone who will buy and drop a stock for no particular reason related to what the company is, does not seem to benefit the process of making or doing something. It pretends to, by motivating efficiency and innovation, but the long term result tends to regularly screw hourly workers and customers in favor of the board and shareholders. Apple is a great example of a company that has abandoned real innovation in favor of newer, more hidden ways of extracting money for nothing from customers.
Wojtek The Bear (3 months ago)
Didn't everything you say just contradict that whole 'disinterested shareholders' bit? The reason the business feeds money into the pockets of the shareholders (your words) is because the shareholders are seeking an active interest in the profitability of the company. Also you realize this is the whole point of the Board of Directors, right? Yes, not every shareholder is expected to know everything about a company, but a few of them, especially the ones that own the most stock in it? Yeah, they are. That's why the stockholders vote on who to place on the company's board of directors and the board, in turn, is supposed to act in the interests of the stockholders. It's the principles of a republic used on a business. Of course short term growth is still incentivized more than long term growth, but that's never not going to be the case. People generally have pretty high discount rates when it comes to awards in the future versus the present. It's just human psychology. Beyond that, CEO's are only beholden to their terms. Anything out of the 10 or so years they operate as head of the company, they have no reason to care about.....mostly. That's an almost impossible problem to fix though without forcing autocrats into the heads of every company as only someone with an extremely long term would pursue such projects.
Robert Eckhart (3 months ago)
why is he using euros? not pounds or dollars?
Mustafa Khan (3 months ago)
yess
Snaily (3 months ago)
This video explained in 3 minutes what my shook refused to even touch.
Po (3 months ago)
Terima kasih
Tapai Lah (3 months ago)
So how to buy these stock ? Hmhmm
Wojtek The Bear (3 months ago)
Ha, thank you!
Into the Unknown (3 months ago)
wow wojtek the bear, your explanations are really good. You can write a book for dummies on finance.
Wojtek The Bear (3 months ago)
First thing you should know is you'll need money. Obviously to invest you need to buy stock, and stock usually isn't cheap. Like I said though, you can just walk into whatever bank you have an account with and there will be an advisor to guide you think opening an investment account with them 99% of the time. Usually they'll manage the account for you; you just have to tell them what to invest in. "I want to focus on the tech industry.", "I want low volatility (risk) stock), "I want to invest in cheaper, higher risk stocks". They'll then manage your account based on those preferences. You could always check on your bank's website to be sure though. That's probably the easiest way since you already have a relationship with whatever bank you use and they are the most secure. Otherwise the online sites like E-Trade and Ameritrade work in Malaysia too (I think). Heck, Malaysia probably has its own trading websites I don't know the name of. These require more direct management though. Basically you just sign up for an account, deposit money into it, and you yourself go out and look for stock to buy.
Tapai Lah (3 months ago)
Damnnnnn . The first time someone reply to me in youtube ! XD . And thank you for taking your time . May u find happines and the right path on your life =3= . I will try to understand what u wrote ,Ty again ! <3 . Btw i just curios how to even start this whole trade things and im from malaysia ahahah .
Wojtek The Bear (3 months ago)
Open an account with a stock brokerage firm, a bank, or an online stock broker. I can almost guarantee that if you that the bank you currently have a checking or savings account with also handles investing. You can open up a separate investment account with them. Otherwise there are online sites you can open an account with like E-Trade or Ameritrade.
Adriana Adnan (3 months ago)
Ok elon...delete twitter now.n get ur own pr sarah sanders n answer everything '.no comment'
dellort tog uoy (3 months ago)
using facebook as an example LMAOOO
drakgrotta (3 months ago)
How dose the companies succés Correspond to a shares incres in value?
Wojtek The Bear (3 months ago)
It is. That's where the expectations come in. Back to the $10,000 company. If they had 100 shares outstanding, each share would be worth about $100 of the company's assets. So with no expectations of the company whatsoever, you'd be willing to pay for the assets of the company. If you were more optimistic and thought the company would grow, you'd be willing to pay more than just the $100, maybe $110. If you thought the company would perform lower than expected and start shrinking, you'd value the price of the stock as something less. Maybe you think in a month the company's valuation will drop to $9,000, or $90 a share, so you'd value the stock somewhere around there. That's where the term 'speculation' comes from. You're basically guessing on the future performance of a company and basing its stock valuation around that.
drakgrotta (3 months ago)
Wojtek The Bear i thought stock Price was determend by speculation and the market just like bitcoin . Its not?
Wojtek The Bear (3 months ago)
A share is part ownership in a value. Say a company worth $1,000 has 100 shares outstanding. The price per share would therefore be $10 (1,000/100). If the company's valuation increases to $10,000 and the shares outstanding remains the same, the price per share also increases. Instead of $10 the share price would be $100 (10,000/100). The actual pricing is more complicated than that. Company expectations are taken into account and yada yada. Basically, since a share is part ownership in a company, the valuation on the part of the company you own increases with the company's total valuation.
Ariyan Suthar (3 months ago)
But what is a share? And who people do with the share
Wojtek The Bear (3 months ago)
A share is part ownership of a company. So if you own a share of stock in Alphabet Inc (the owners of Google), you are one of the owners of the company. Not a particularly large one, mind you. Alphabet Inc has 350 million shares outstanding, so you would only own a percent of a percent of the company, but you'd be an owner all the same. Now what does someone do with a share? Two things really. If you expect a company to grow in the future (like you foresaw the money making potential of Apple's iPhone before the first one was released), you would buy some stock in the company at a lower price and sell it later at a higher price if your prediction is right. So if I expect the next PlayStation from Sony to do amazingly, I can buy a share of Sony stock now at $53 and sell it later at $60 or so. Of course if the PlayStation ends up being a flop, the share price could fall and I'd be out money. Otherwise many companies give out dividends. Basically if a company has some money leftover after reinvesting their profits, it may decide to give said money directly to its shareholders. Usually its not much: something like 20¢ per share. If you own a lot of shares though, this can start to add up.
Kashyap Kubera (3 months ago)
So who are the buyers of the shares . Will it include public . If yes then what do these buyers get in turn??
Wojtek The Bear (3 months ago)
Yep, that's why they are called publicly traded companies. In fact if you have a retirement account or the likes, you almost definitely own shares of stock. That's also why companies like Microsoft have so many shares outstanding. Otherwise, what do you get for buying them? Generally you'll get a say in how the company runs things. All major company decisions are handled by a shareholder vote usually, so you get to vote on strategic issues for the company. Companies can also offer dividends. Basically if they have any money left after making all their investments, they may choose to just give the money back to the shareholders themselves. This isn't much, something like 20 cents a share, but it adds up and is free money. Beyond that, it's better to think of a share of stock as a physical good. When you buy gold, you don't expect to make money off of it just by holding on to it. You make money off of it by selling it later. You pay $50 for it, and then two years later sell it at $60, earning $10. It's same for stock. If you expect a company will do good in the future, you may buy some of their stock, selling it later when you think the company has peaked in value. So for instance, buying stock in Apple for $5 a share in 2005, before they came out with the iPhone, and then selling it today for $200 a share today. That's a 300% return on your investment year over year. Of course that's not the norm for stocks, but generally stocks do increase over time since, well, the economy grows every year. Buy low, sell high as they say.
Kashyap Kubera (3 months ago)
Wojtek The Bear can the public just like me can buy the shares ??. If yes what do I get in turn for investing in the share??
Kashyap Kubera (3 months ago)
Wojtek The Bear 😎😎thnk u
Wojtek The Bear (3 months ago)
Who buys shares? Investors. Who sells shares? Other investors. A share is a part ownership in a company. So by owning a share of stock in, say, Microsoft, you are officially an owner of the company. Not a big one of course. Microsoft has over 7 billion shares outstanding, so you would only own a percent of a percent of a percent of Microsoft, but you'd be an owner all the same. Otherwise, it's all based on expectations. If I don't expect Microsoft to do well in the coming months, I might think a share of stock in the company is only worth $50. Conversely, my friend might be more optimistic in the company. Maybe he thinks the new Xbox or Windows operating system will be a smash hit, so he values a share in the company at $100. Knowing my views on the company and that I own a share of stock in it, my friend offers me $70 for my shares of stock. To me this is a deal as its $20 over what I believe the share is worth, and to him it's also a deal since it is $30 below what he believes it is worth. That's all the stock market is. People with varying expectations on a company's performance buying and selling stock based on said expectations.
Naufan Septyadi (3 months ago)
How Crypto Exchanges work?
Alexander Bradley (3 months ago)
Just because the stock exchange is doing well doesn't mean the economy is
Wojtek The Bear (3 months ago)
There's a reason I said generally. Of course the stock market, like all markets, has its periods of manias and panics, but generally it's a pretty food indicator of economic performance.
Alexander Bradley (3 months ago)
Wojtek The Bear get Netflix and watch Explained by Vox
Wojtek The Bear (3 months ago)
Actually....generally it does. The stock market is a measurement of the performance of companies. If the companies are performing well and meeting, or even surpassing expectations, that generally means the economy is doing well too.
Half Man Half Cat (3 months ago)
i love bubble coffee!
BTS Army (3 months ago)
Reputation is important
Most pro (4 months ago)
What if the stock is negative does mean i am credit to the company anyone anwer this question please
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Wojtek The Bear (4 months ago)
Stock's can't be negative. The lowest value they can hold is nothing. A share of stock basically just says that you own a certain amount of assets in the company. If the company goes bankrupt, the assets are sold off and your assets drop to zero.

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