1. Revisiting the stock market
Mr kuhn

2. What kind of investor will you be?
There are four main types of investors, all based on different animals
Bulls
Bears
Chickens
Pigs
All options have the opportunities in the stock market except pigs, don’t be a pig…

3. Bulls: OPTIMISM AND OPPURTUNITY
Bulls only buy stocks in what is known as a bull market
BULL MARKET: When the economy is going well, people are finding jobs and the GDP is rising. Stocks will rise in this time as well
This is an ideal time to buy as almost all stock will go up but it is not without its own risks
Stocks often become over valued during these times and stocks fall drastically

4. Bears: making money off failure
Bears only buy stocks in what is known as a bear market
BEAR MARKET: A market in which the economy is doing poorly. Often during a recession or depression
Bears will either short stocks and bet on their failure, or buy stocks when they believe the bear market is over

5. Chickens: what it sounds like…
Chickens will not invest in anything long term
Chickens like over night short successes and little risk
Chickens often make no to very little money as they do not take big risks
Big risk=Big reward

6. Pigs: just don’t be one
High risk investors with little knowledge looking for a big quick return
Pigs are greedy, impatient, and emotional
Bulls and Bears often do better because of the failures of pigs
“Bulls make money, bears make money, pigs get slaughtered”

7. WHY DO STOCK MARKET PRICES CHANGE?
Supply and Demand!
The more people that want to buy a stock the more the stock is going to be worth
If a company is doing well, or expected to do well, people will want to buy into that company, making stock go up
When people want to sell a stock its price will go down
If a company is doing poorly people will want to sell
If a company is doing very well, people will sell stocks while they are high to cash in and make profit

8. COMPANY VALUE AND STOCKS
A company’s value is not directly tied to its value. Use Market Capitalization to find true value
Market Capitalization: Total number of company’s stocks x price of each stock
Which is worth more
Company A: 1 million shares at hundred dollars each 1,000,000 x $100= $100,000,000
Company B: 5 million shares at fifty dollars each 5,000,000 x $50= $250,000,000
While company A has more expensive stocks, company b is a more valuable company

9. Stock value and earnings
Earnings are the most important factor when considering stock prices
Companies need earnings to stay open, if companies do poorly people don’t invest and demand goes down
Public companies are required to post earnings four times a year in what are known as quarterlies
Analysts watch this period closely
If companies are earning more than was expected stock prices sky rocket
If companies are earning less than was expected stock prices fall

10. So what did we just say
1. At the most fundamental level, supply and demand in the market determines stock price. 2. Price times the number of shares outstanding (market capitalization) is the value of a company. Comparing just the share price of two companies is meaningless. 3. Theoretically, earnings are what affect investors' valuation of a company, but there are other indicators that investors use to predict stock price. Remember, it is investors' sentiments, attitudes and expectations that ultimately affect stock prices. 4. There are many theories that try to explain the way stock prices move the way they do. Unfortunately, there is no one theory that can explain everything.

11. Helpful websites Google Finance Stock Market Watch Yahoo Finance
Stock Market Watch
Yahoo Finance
Investopidia