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Good day subscribers thank you so much for joining me today i am jeremy this is a financial education channel and today we’re doing part six of the very popular series stock market terminology that every investor should know i’m really enjoying sharing this series with you guys and it seems like you guys are really enjoying it back so you know what let’s just get
Into this ten more terms to pound out today and we are on part six let’s get into this first term up today we have public company a public company is basically a corporation that you can buy shares in as an individual investor so it’s not like well i don’t want to go into the second term but a public company is basically when you can invest in it and you don’t
Have to have known the owner you don’t have to know anybody in the company they just trade on a stock market ticker symbol that’s on the nyc or the nasdaq or some other platform and users buy shares in that so that’s what a public company means and it means that all the financial information that all has to be public information so they can’t like hide how much
Revenue they had last quarter they can’t hide how much profit they had last quarter anything like that or last year that all is public information how much the ceo makes the cfo that is all public information they cannot legally hide that type of information all that has to be out there to the public who’s on the board of directors that all has to be on the public
So a public company basically is is basically what the name is it’s public you can find out basically any amount of information you want on that company there’s a few secrets they’re allowed to hold back but the majority of things it is all widely known and it has to be known to the public that’s a public company next one’s up is a private company a private company
Is complete opposite of that a private company is a company that they don’t have to share anything publicly as far as how much ceos make or cfo’s or any of the executives they don’t have to disclose who’s on the board of directors if they even have a board of directors how much revenue they make anything like that because that can just be like a family-run company
I used to work for a huge corporation that throughout in billions of dollars a year but it was a private corporate private company so we didn’t have to disclose what that income was we didn’t have to disclose what the profit was last quarter we have to disclose how much the ceo is making none of that stuff needed to be out there because it was family-owned it was
Only by the family so it doesn’t matter that it was a huge corporation ten twenty thousand employees were in the company all that stuff can still be held privately when you’re a private company so there definitely some advantages of private companies i’ve done actually a video i believe in the past on public company versus private company and what’s best for a big
Corporation those kinds of things i’m gonna have to go back and look if i haven’t i’m going to do something like that because there’s definitely advantages to being a public company there’s definitely some advantages to being a private company next term up term number three is quarterly earnings quarterly earnings is when a company has to report earnings every
Three months so four times a year a quarterly earnings is when they report whatever numbers they did for that previous three months so generally the quarters run like this the first quarter is january february march the next quarter is april may june the next quarter which is third quarter is july august september in the fourth quarter would be october november
And december that’s generally how the quarters run some companies run them like one month off which is kind of strange but anyways the most companies that is the quarterly process they announce what their earnings were so their revenue what their net income was they announce developments with the company what happened with the company in that quarter did they
Get into some new markets how successful are their products and things like that market trends they get into all that kind of stuff and that runs into term number four which is a conference call generally all public companies have a conference call which is when analysts call in and ask questions after that companies report their number so generally that company
Will report their numbers thirty minutes after that they do the conference call and that’s when the ceo is on there and sometimes the cfo and sometimes a few other executives that are super high up ranking in the company will be on there to answer questions from analyst community so investors can hear those and understand what exactly is going on with that company
So maybe going more in depth and try to get some more information that maybe they didn’t they didn’t call out in that earnings report and things like that maybe ask more questions on okay why did revenue slip more this quarter you know because this and that so it was really an in-depth process i love listening to conference calls i highly suggest you guys start
Listening to conference calls if you have not begun yet especially some of the bigger companies i find them really interesting maybe i’m just a super big business stock market nerd but i find conference calls so fun to listen to you can learn more listening to some conference calls of some of these guys and gals then you can learn getting a business degree at a
School i’m serious they give out so many phenomenal tips that in the way they talk in explain things it just really opens up your mind if you’re ever going to start a business so i highly highly recommend you guys just listen the conference calls unless you think it’s the most boring thing in the world some of my favorites are like steve wynn at wynn resorts i love
Listening to him because he can just go off on tangents and things and the way he explains business i just really enjoy that he’s about my favorite there’s a lot of tech companies i like facebook apple i love here all those big companies as well that’s what a conference call is next up is number five and that’s market cap so market capitalization that is how you
Basically calculate that as you take the share price so however much the shares are trading in you times that by however many shares are outstanding so let’s say the company has a share price of $2 and they have two shares outstanding you take two times two that means they have a four dollar market capitalization now of course public companies most of them have
Hundreds of millions of shares outstanding if not billions of shares outstanding and of course they have share prices that are generally way above $2 which is how they get huge market caps of you know in the billions and billions of dollars next term up is eps what eps stands for is earnings per share how you figure out the earnings per share or the eps as it’s
Known is you basically take what the nek income is so let’s say the company earned two dollars in total net income that was their net income two dollars and you basically divide that out by how many shares are outstanding let’s say there are one share outstanding 2/1 that means there’s two dollars in eps for every one share outstanding they earned two dollars now
Of course you know bigger company the more complex these numbers are because you got earnings of hundreds of millions if not billions of dollars divided out by hundreds of millions or whatever billions of shares so the comp the numbers are much more complex but it’s basically the same thing divided out how much they did in net income divided by how many shares they
Have outstanding that is how you figure out ets and that’s what eps is earnings per share next term up is a portfolio a portfolio is however many stocks you hold and what stocks you hold in your portfolio basically so somebody asks you hey what stocks do you have in your portfolio that means what stocks do you hold what stocks are you invest in at that time that’s
What a portfolio is next term up is margin margin is when and what we’re talking about we’re not talking about gross margin or net margin or any of that kind of stuff this is margin when you’re investing in a brokerage account so if you can make create a margin account and have margin which is when you invest money that’s not even yours you’re basically taking out
A loan to invest more capital because you think a stock is going to go up or you could be betting that stocks going to go down big so margin is whenever you want to invest money that’s not yours and generally you can do two dollars for every $1 you have sometimes you can go a little bit higher than that if you’re more diversified so sometimes you can get all the
Way up to close to $3 for every $1 you actually have invested but generally the term is two dollars or you know two dollars total and say you have one dollar you can invest another dollar in margin next term up would be a margin call i’ve experienced this before when i messed around with margin i went too heavy on margin so if you go too heavy on margin and then a
Stock goes down in the short term they basically will force you to either deposit more money in your account deposit more money or you have to sell your shares within like three business days so i have had an experience at before back when i was messing around with margin i was a really bad decision i was very short sighted on my my whole thinking and i would have
Margin calls come in and i brokerage would send me hey you know you need to posit five thousand ten thousand your account by such and such date or we’re gonna sell your shares automatically for you so if you don’t have that extra money to throw in there to your account you get screwed and you have to sell your shares even if it’s out of bad prices nothing you can
Do about it because it’s federal regulations that if you get to a certain amount that you don’t have in your account they have to sell and then also they have their own house rules and every brokerage is a little bit different so some brokers might let you go a little bit some might call you didn’t write that in there and say hey they have the right technically
When you sign up for a margin account to sell it anytime so always remember that doesn’t mean they will but they have that right so keep that in mind if you ever do a margin account which i do not recommend for anybody i just do not recommend it it’s important you know it though next one is the last term today is actually maxed out it’s not really so much a definition
As a saying maxed out means when you have a margin account and you have everything invested or if you just have a regular portfolio of stocks and you have every dollar you could possibly have invested invested that means you’re maxed out a man i’m maxed out i got all my money and all my stocks or all my money in this stock i’m maxed out in apple or whatever stock
I cannot i don’t have another dime to my name right now i have it all riding on whatever stock or multiple stocks or short selling stocks whatever it is you have everything you possibly have in that stock that’s what it means to be maxed out it’s basically like in poker you know when they go all-in they put all their chips on the table and investing you call that
Being maxed out thank you for watching this today guys ten more terms i’m enjoying the series next week we will do part seven if you’re watching this and you haven’t subscribed yet you may want to a talk some about personal finance on the channel talked a lot about business i’m an entrepreneur i talk about entrepreneurship and i talk so so so much about the stock
Market in doing series like this every single week if you’re just getting caught up on these terms you can go back and watch you watch a playlist i have a playlist created for this about the stock market terminology thank you for watching guys and have a great day you you
Transcribed from video
Stock Market Terminology every Investor MUST KNOW! – Part 6 By Financial Education
