Beginner's Guide to the Stock Market

What the hell is the Stock Market? Why should I learn about this? What's the Impact of It?

- GNU Bull (an uneducated mascot for Teenance, your ultimate blogger's student)

For those of you who carry an iPhone, there's always an app that says STOCKS on it. Some of you choose to ignore and delete it, others have a spark of curiosity in them to start looking at random charts and numbers of companies. And, even if you don't have an iPhone, those people in suits on TV keep berating about this "stock market". No matter what level of knowledge you have about stocks, this is gonna be an ultimate guide tailored for your learning and success as a future billionaire.

The GNU Bull Mascot

What is the Stock Market?

To get a basic understanding of this topic, we need to know what a stock is. Let's Consider our uneducated GNU Bull to own a company where he sells milk.

Now GNU is doing extremely well for himself, gaining tons of money with his fresh quality for customers. Yet, there's a problem. He now wants to expand and create another milk shop in the city but doesn't have enough money to do so.

Like every other bull, GNU goes to the bank to get a loan. Unfortunately, though, he does not meet the requirements for a loan and gets denied for it.

Instead of going back with a loss, he ends up going to an exchange by the recommendation of a friend known as Justin Ma.

As soon as he entered the building, he could see numbers and flow charts of all sorts of companies. Soon, a broker (an individual acting as a middle man between customers and the market) came to his aid.

Once GNU told about his situation, the broker devised a plan. He decided to issue common stock of the company for people to invest in. He explained to GNU-

"A stock is a type of investment in a company. You issue ownership shares to people who can have a percentage of the claim on your assets and earnings. In return, you get to have more money coming from them that can help in expanding your business and funding your operations."

"Basically, these people who will give you money will invest in your company and become partial owners of it. If the value of your company falls or rises, so will the stock's price."

GNU - "So why do they call it an exchange?"

Broker- "You are giving people a piece of the pie, or in this case, milk, in exchange for money that they will give you."

GNU- "Ok Genius, how will the money I get be determined?"

Broker- "To put it in GNU terms for you- An exchange market will determine an initial price for your company for people to invest in based on your earnings, profit, etc. and then issue an x number of shares depending on how much money you want from an x number of people.

Now, those people will determine if they should invest or sell their investment based on how good of bad your company will be doing. If they invest/give more money, then the stock's price increases, as the demand for it also increases. If they sell their ownership share, then the demand of the stock decreases, and so does its price."

This Story will now continue in the next lesson!

Where, and how old is the concept of stocks?

Now that you have got a general understanding of what a stock is, thanks to GNU's desire for more milk in the city, it's time for a short and exciting history lesson.

1611: Amsterdam

During this era in Amsterdam, emerged a popular trading company that controlled the seas and initiated globalization across Europe and Asia fluently. The Dutch East India Company traded goods and annexed countries around the world, being an integral part of the United Kingdom's army. At that time, the company did not have enough money to fund its expeditions to various parts of the world.

In hopes of attaining capital, the company decided to create a system that would lay the foundation for our current stock market. They created a system in which people could get some of the profits of the company if they invested their money into it. And from there, trades and exchanges were carried out with the development of the stock market over centuries to the complicated system it has become today.

Topic 1: Why Is the market so Important?

---

Topic 1: Why is the market so Important?

Based on what you've read so far, companies like to give ownership to raise capital to fund their projects that can increase their profits and value. In return, once the company's value increases, the investor gets to get a profit with their ownership too.

Now, you might be thinking that since it's a win-win situation for each party in the exchange, what's the catch? Well, in stock markets, not only are you competing with thousands, and in some cases, millions of competitors for one stock, but you're also going to have to judge the company's value based on articles released by various news stations.

The majority of the world's richest people have earned their billions because of their ownership in their companies' stock which has had a linear growth throughout.

Because of how financially empowered the market can make you, and because of its extreme risks, We, at Teenance, plan to educate you on detailed concepts and ideas in GNU terms that can easily be interpreted and used for your future endeavors!

Was Justin Ma's suggestion for GNU Helpful?

• Yes
• No

Stocks are Risky

• Yes
• No