What it means to buy a company's stock | Stocks and bonds | Finance & Capital Markets | Khan Academy

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  • Опубліковано 27 вер 2013
  • Courses on Khan Academy are always 100% free. Start practicing-and saving your progress-now: www.khanacademy.org/economics...
    What it means to buy a company's stock. Created by Sal Khan.
    Watch the next lesson:
    www.khanacademy.org/economics...
    Finance and capital markets on Khan Academy: Many people own stocks, but, unfortunately, most of them don't really understand what they own. This tutorial will keep you from being one of those people (not keep you from owning stock, but keep you from being ignorant about your investments).
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КОМЕНТАРІ • 237

  • @jimettamarna417
    @jimettamarna417 4 роки тому +57

    I graduated from HBS with Sal. Now I'm showing these videos to my middle-school aged sons to teach them. Awesome! Thanks for doing what you do, Sal!

  • @enh9952
    @enh9952 7 років тому +51

    "a loan to me is a liability which we'll talk about in a second"
    suddenly im anxious

  • @jorgevargastx
    @jorgevargastx 4 роки тому +64

    This guys know it's all. Chemistry, bio and business??

  • @rubencrisitano9
    @rubencrisitano9 6 років тому +7

    Amazing, really helps me understand balance sheets and what Ben Graham is trying to say in his book The Value investor. Much appreciated

  • @hwanlee5978
    @hwanlee5978 8 років тому +13

    Thank you so easy to understand

  • @jeroenwaning
    @jeroenwaning 10 років тому +8

    Great information in laymen terms. I'm embedding it on my website :)

  • @AhmedBalfaqih
    @AhmedBalfaqih 9 років тому +10

    Simple yet very useful.

  • @brianwarner308
    @brianwarner308 10 років тому +3

    i love the khan academy. Very useful videos, much appreciated!!!

  • @abhinavitsmebellamy
    @abhinavitsmebellamy 4 роки тому +1

    Thanks. Really well explained!!

  • @yinge101
    @yinge101 10 років тому +22

    Google a bunch of the numbers: ‘june 30 2009 december 31 2008 current assets cash and cash equivalents 202,656’
    First result: CTI Industries Corporation Reports Second Quarter 2009 - Bloomberg

  • @odinmp5
    @odinmp5 10 років тому +2

    this video explains it better than most of the books I own. even my niece got it and she is only 12

  • @sashanastitches
    @sashanastitches 10 років тому +2

    very clear explanation...thanks much.

  • @ChrisGarrison72
    @ChrisGarrison72 9 років тому +3

    I am Havering way to much of a hard time understanding, but I am of sort of getting the idea. Great video khan

  • @RanochVTX
    @RanochVTX 9 років тому

    Wow this was so informative. 😳

  • @alexanderhenderson454
    @alexanderhenderson454 5 років тому +7

    This is really useful and expensive info. How awesome :-)

  • @jacksonsanders9363
    @jacksonsanders9363 2 роки тому +1

    I love you Sal Khan. You are an inspiration.

  • @angel.7.7.7.7
    @angel.7.7.7.7 7 років тому +2

    Thank you so much for this video. I will share it with my 12 yr old son.

  • @kaitsakey6495
    @kaitsakey6495 4 роки тому +7

    I have a business degree and was never taught this. Thank you! Makes sense

  • @edmondmariga819
    @edmondmariga819 5 років тому +10

    Wait, this dude tutors Bio too, so well.

  • @kaunghtetwin3149
    @kaunghtetwin3149 4 роки тому

    Thanks for your sharing 😍

  • @jaykhan6524
    @jaykhan6524 3 роки тому

    Thanks again Sal. 😊

  • @adnanfaisal5593
    @adnanfaisal5593 9 років тому

    THANKS ALOT DEAR

  • @MichaelTaphouse
    @MichaelTaphouse 3 роки тому

    Much love and gratitude

  • @williameddy8856
    @williameddy8856 6 років тому +1

    Very helpful thank you

  • @amiraboodi2075
    @amiraboodi2075 Рік тому

    Thank you very much. Good introduction.

  • @marc.levinson
    @marc.levinson 9 років тому

    Thanks Salman! Always super helpful. I might be mistaken but when I look up various major companies, it appears that they're trading several times higher than their book value. Does anyone have any insight in to how that plays in to things? It seems like it's hard to use the book value as an anchor when investing in those companies.

  • @played1994
    @played1994 8 років тому

    Thanks for the video

  • @evelynflores2439
    @evelynflores2439 4 роки тому +7

    Thank you. Easy to understand. I related to the housing market when trying to understand the terms and relations here since that is my personal experience.

    • @cyberslumz
      @cyberslumz 4 роки тому +1

      Let me buy you anything you want 🙊

  • @matthewjames7513
    @matthewjames7513 9 років тому

    legend, thank you

  • @jeffsellers5468
    @jeffsellers5468 7 років тому

    Well done!

  • @genxmarketinggroup7153
    @genxmarketinggroup7153 4 роки тому

    Great video thank you!

  • @stevenmarkanthonyharpaul739
    @stevenmarkanthonyharpaul739 Місяць тому +1

    Wow I am really happy to know this.

  • @javinfinity7574
    @javinfinity7574 4 роки тому

    Thankuuu this was so good

  • @nickraffone1598
    @nickraffone1598 8 років тому +23

    I'm 16 and getting into stocks I want to be an investor and these videos are helping so much

    • @feelteamsix3911
      @feelteamsix3911 8 років тому

      Nice!

    • @S9V9G3
      @S9V9G3 8 років тому +7

      im 15, and getting into this as well, would you like to study with me, just to learn how to trade, etc.?

    • @nickraffone1598
      @nickraffone1598 8 років тому +2

      Trūë SAvAgE id love too!!!

    • @S9V9G3
      @S9V9G3 8 років тому

      so that way we can talk on irc instead of email

    • @MJtheFellowActuary
      @MJtheFellowActuary 7 років тому +1

      Study Actuarial Science to get an extra edge in understanding Stocks

  • @Heshanudugama
    @Heshanudugama 6 років тому

    very clear! thanks

  • @BangzHomie
    @BangzHomie 9 років тому +2

    Thanks.

  • @chloelien7556
    @chloelien7556 6 років тому +1

    Almost anything can learn from here :) !!

  • @bonkrood4629
    @bonkrood4629 3 роки тому +11

    whos here from the GME stuff going on

  • @MrMarkgyuro
    @MrMarkgyuro 4 роки тому +1

    thanks Khan you are the best :)

  • @jonahs.757
    @jonahs.757 Рік тому +1

    This guy is pretty much all knowing.

  • @JUSTOVERTHINK
    @JUSTOVERTHINK 2 роки тому +1

    This man is genius "Oh, I'm not going it too much"
    🤣🤣🤣🤣

  • @joshualipovetsky2744
    @joshualipovetsky2744 2 роки тому

    Thank you.

  • @muskankesharwani3151
    @muskankesharwani3151 2 роки тому

    Thankyou sir❤️❤️

  • @ioannissakellariou5165
    @ioannissakellariou5165 5 років тому

    Hi, I'm trying to do the math on IBM using your information but it seems like the numbers are not right. Would you mind walking me through it going off the information that yahoo provides?

  • @VeryHighCholesterol
    @VeryHighCholesterol 8 років тому

    Great video

  • @tonymarino1730
    @tonymarino1730 3 роки тому

    What a great video

  • @jorgipogi
    @jorgipogi 10 років тому

    The best.

  • @marcellenel9952
    @marcellenel9952 9 років тому

    Is that Balance Sheet from Research in Motion??

  • @desibiden3860
    @desibiden3860 3 роки тому

    Great Video

  • @Yaalah
    @Yaalah 10 років тому

    How did you figure that out?

  • @jag831
    @jag831 6 років тому +3

    Why does it have 2.78 million shares and not 100 or 5000 or 2 shares? Is there a reason why the company divides its equity in exactly 2.78 million shares? Or is it irrelevant to know?

  • @stanleygqm
    @stanleygqm 10 років тому

    double? An understatement thr my friend...

  • @KoreanAesthetics
    @KoreanAesthetics 9 років тому

    So how should you decide to buy or sell? Did I miss that

  • @RahulSharma-ln8kj
    @RahulSharma-ln8kj 6 років тому +3

    You're telling me Apple has an equity of 850B since that's there market cap? I can only imagine their total assets.

  • @WillTheVideoMaker
    @WillTheVideoMaker 2 роки тому +1

    Pretty much if you learn accounting, you will find out that a lot of terms are shared, but have different definitions
    Pretty much that if you learn all financial accounting concepts, you'll have a much easier time in understanding stock markets without learning economics

  • @dobcsek
    @dobcsek 6 років тому +1

    So how the company calculates the 8m while according to the market it is worth 7? The difference is quite significant. Who determines how much the company can put down as a value of equity?

  • @papamegamind
    @papamegamind 5 років тому +8

    So if I buy a stock/share that means that from the company's income I get some precentage?

    • @ryanfranz6715
      @ryanfranz6715 3 роки тому +1

      I know this comment is a year old but I feel obligated to mention, since nobody has mentioned the answer to your question. The answer is yes, it’s called dividends. A dividend is a little “paycheck” for each stock, and it is a percentage of the company’s profit, if they had any. Different companies decide if and how much of their profit to pay to shareholders, and when. Dividends are not related to (though expectations about dividends can drive) the price of the stock itself. It’s just extra money, added on top of / regardless of price movements of the underlying stock. Also, contrary to other replies, you don’t “technically” own the company if you own enough shares. You *literally* own a portion of the company determined by the exact fraction of their shares you own. Owning 1 share makes you an owner. You may be a very small owner, but you’re still an owner.

    • @tony46126
      @tony46126 3 роки тому

      @@ryanfranz6715 How much do you have to pay for stock such as Publix
      ...And does Publix take money out of your paycheck to put into your stock?

    • @ryanfranz6715
      @ryanfranz6715 3 роки тому

      @@tony46126 not all companies are publicly traded, including Publix. A publicly traded company (PLC) must meet specific requirements and register with a stock exchange. There’s a great video series on value investing (preferably watched after this series) by youtuber “Preston Pysh”. Just search that UA-camr and a series on “value investing” should be one of the top results.

    • @yaboylucas2371
      @yaboylucas2371 3 роки тому

      @@ryanfranz6715 How do companies pay you? How does it work? Does it go straight to your bank account?

    • @ryanfranz6715
      @ryanfranz6715 3 роки тому +1

      @@yaboylucas2371 You need to open an account with a registered stock broker. Some online examples include: Charles Schwab, E-trade, and Robinhood, although anyone with a broker's license will do. Maybe your neighbor has such a license and has a company called "Joe's Stocks". There's plenty of options. Once you have that account, you may transfer money to and from that brokerage account by any method supported by your broker, usually by linking one of your existing bank accounts to allow direct transfers. When you buy stocks (technically you ask your broker to buy it for you), that money is taken from your brokerage account. That money is gone and replaced with a certificate, held by your broker, saying you own X shares of a company, meaning you're a part-owner of the company (the fraction being shares you own divided by the company's shares outstanding). When the company's owners pays themselves (hey, that's you!), a dividend is given to each outstanding share. That money goes straight into your brokerage account, where you can either transfer to your bank account or re-invest that money.

  • @justforfun4680
    @justforfun4680 7 років тому

    mistake i found - u say book value instead of equity. Their different.

  • @engineering1O1
    @engineering1O1 3 роки тому

    So technically Sal Khan knows everything from Maths to Science and Engineering. OMG, even Business; there we go!

  • @fleshcookie
    @fleshcookie 9 років тому +9

    Sal always says, "If you believe..." do companies often lie on these forms? I imagine that is some sort of fraud

    • @Thegoatt84
      @Thegoatt84 7 років тому +4

      Watch American Greed*

    • @Gothiqueluv
      @Gothiqueluv 2 роки тому

      Life in accounting...
      Boss: These numbers aren't right.
      Employee: Well, what do you want them to say?

  • @daniboi1786
    @daniboi1786 4 роки тому

    How can I find out how many shares a company has?

  • @TonyPubgMobile
    @TonyPubgMobile 6 років тому

    great

  • @jasontheworldisyours
    @jasontheworldisyours 7 років тому

    How many shares does someone need to buy at $3?
    @ColoredSpaces

  • @mattk5592
    @mattk5592 7 років тому

    So how much money do u need to open a company up?

  • @jefesaidso
    @jefesaidso 9 років тому

    So what happens after you buy the share ? & Where do you go to actually buy a share?

  • @vicheakeng6894
    @vicheakeng6894 Рік тому

    How do you know many shares?

  • @leonardopalacio5247
    @leonardopalacio5247 9 років тому +7

    How do they decide how many shares to issue ?

    • @Thegoatt84
      @Thegoatt84 7 років тому +5

      It's a random number, there's no blueprint to it. Directors and or Shareholders decides that figure.

    • @999locke
      @999locke 7 років тому +1

      as many as they can

  • @samanthal9181
    @samanthal9181 6 років тому

    lifesaver

  • @kellyi.4353
    @kellyi.4353 6 років тому

    How did you know Company X has 2.78 shares?

  • @elijah24567
    @elijah24567 8 років тому

    i'm 18 and i have nothing to do with accounting because i'm studying in medical industry sector and i want to prepare myself i want to invest once i have enough money to be a minor investor and maybe a major investor learned a lot

  • @jorgipogi
    @jorgipogi 10 років тому

    Can we divide a million in equity into a billion the same way? Please answer.

  • @ThomasFergus
    @ThomasFergus 10 років тому

    the unnamed company is CTI industries inc. They manufacture film products, ie packaging and containers, but most notably the make balloons.

  • @jack3604
    @jack3604 10 років тому +1

    Can you make a video of where you would start to trade stocks? I'm 16 (I assume that you need to be 18 to purchase stocks) so I don't think that it would directly apply to me, but I have always wanted to know for future reference.

    • @Gothiqueluv
      @Gothiqueluv 2 роки тому

      Hey Jack! From the looks of it, you're 24 y/o now. Did you ever invest? If so, in what?

  • @acommunityofhermits
    @acommunityofhermits 10 років тому

    It's also done if the investor needs to cash out for some reason; perhaps they need capital for something else, or if it is their retirement fund and thy want to spend it now that they are retired.

  • @abbasakbar6597
    @abbasakbar6597 8 років тому +1

    does taxation on such capital gains count as a liability? are the shareholders responsible for it? or is company x?

    • @oklano_menobi7946
      @oklano_menobi7946 Рік тому

      i am almost sure that the shareholder is taxed on their returns, so the shareholders are responsible.

  • @marq2827
    @marq2827 7 років тому

    Do you have a video on how to actually buy a company stock

    • @k.a.9415
      @k.a.9415 7 років тому

      try Robinhood for stock trading

  • @Yaalah
    @Yaalah 10 років тому

    They get their money back either by selling their shares, so they're no longer owners in the company, or by temporarily selling to others the rights to any appreciation on the stocks they own. This is called "selling a call option."
    Selling one's stock or the stock's call options are only done if the seller believes the stock will decline.

  • @hectorsaucedo4465
    @hectorsaucedo4465 7 років тому +10

    So if you buy 50 share out of 100, does that mean you own half of the company?

    • @andrewcbuensalida
      @andrewcbuensalida 7 років тому +2

      yes

    • @ChannieChauni
      @ChannieChauni 7 років тому

      Hector Saucedo no

    • @thenovice4370
      @thenovice4370 7 років тому +7

      no, you own half of the company's assets. Which is a good thing, because you don't want to be owning their liabilities too anyway

    • @999locke
      @999locke 7 років тому +2

      no no no it means you have 50 shares

    • @shivangisrivastava6401
      @shivangisrivastava6401 6 років тому

      Hector Saucedo yep

  • @NELSONG12
    @NELSONG12 10 років тому

    Now i have a better idea. I think most people don't know what you show in this video.
    Thanx

  • @wmarkozalatar3732
    @wmarkozalatar3732 6 років тому

    just wana ask what does Avg Vol ( 3m) mean ? 3months of volume is 3290.16 piece of stock transacted out of the 2.78 M pieces of shares ? meaning for 3 months only 0.00118 % of the outstanding shares is being play around the market ?
    sorry if wrong I hope some one can help

    • @rjjrdq
      @rjjrdq 6 років тому

      The same shares can be traded over and over. The same share could change hands 10, 20, 30x in one day.

  • @ninolora3573
    @ninolora3573 6 років тому

    I'm 15 btw. A house isn't an asset because every month or so it takes money from you, same as a car for example. An real asset is something that gives you money

  • @vicheakeng6894
    @vicheakeng6894 Рік тому

    Bond sold in 2020?

  • @tigadirt
    @tigadirt 2 місяці тому

    Okay but how does this help the business?

  • @o0jack28120o
    @o0jack28120o 6 років тому +1

    Guys should I invest in Company X, Y or Z?

  • @hectorsaucedo4465
    @hectorsaucedo4465 7 років тому

    Imaa #share this video lol

  • @rapper5933
    @rapper5933 7 років тому

    Sooooo are we going to talk about bonds or..

  • @johnlee1546
    @johnlee1546 8 років тому

    Fucking Great Video!!!! So well explained about what a company's share meant. with just 2 questions in my mind:
    1: how does the number of a company's share is determined, in other other word, how did the number 2.78m shares come from
    2: Can a company's share be bought out,? So what happens if the 2.78m share of this company is owned by some people and other investors want to buy more shares of this company, what happens then?
    Thanks for making and uploading this video. Double thumbs up for u!

    • @dannyshows
      @dannyshows 8 років тому +1

      2.78m number is determined by the company (maybe board or maybe shareholders themselves depends on how the company is set up). Company's can be taken over by an inventor who buys a majority of the company's stock. Sometimes an investor that wants to take over a company will advertise that he wants to purchase the stock at a certain price, and some stock owners may sell at the advertised price. Some stock owners may not sell and the purchasing investor may attempt what is called a "squeeze-out" (en.wikipedia.org/wiki/Squeeze_out). Sometimes investors will attempt to purchase a company but the owners of the stock don't agree on the price, sometimes the disagreement about the price may end up in court; the court would determine the value of the stock and that whole process is a mess.

    • @johnlee1546
      @johnlee1546 8 років тому

      thank you very much. very informative
      so just to be clear about what I understand about what you just said, the company board or maybe shareholders(seems to me who ever controls the company) come up with whatever number pleases them/whatever they think is right as the the number of the total shares of the company?

  • @Zakawaka45
    @Zakawaka45 8 років тому +1

    A house that you live in is not an asset, but otherwise great vid ;)

    • @jameslam2491
      @jameslam2491 8 років тому +5

      Zakawaka45 holy shit are you kidding?

    • @Zakawaka45
      @Zakawaka45 8 років тому

      james lam read rich dad poor dad...

    • @diphMO2
      @diphMO2 8 років тому +4

      +Kurt Core An asset is just something that has value. It does not need to generate value.

    • @Guerilla1337
      @Guerilla1337 8 років тому +1

      +Diph Ling
      kiyosaki's definition of assets is wrong haha

    • @Thegoatt84
      @Thegoatt84 7 років тому

      I think you're referring to Current assets, yes it's not, but it's considered an asset (other assets).

  • @AFirongeneral
    @AFirongeneral 9 років тому

    Can you talk about Canadian RRSP? How to calculate RRSP contribution and how much tax refund you will receive?

  • @cut3141
    @cut3141 6 років тому +1

    He sounds like vladtv

  • @louis9116
    @louis9116 Рік тому

    did anyone figure out what company is this

  • @zir786
    @zir786 10 років тому

    What happens to the people when they've bought the shares. How do they get their money back.

  • @deftrascal1626
    @deftrascal1626 7 років тому +3

    6:01 Did he just slip-up and say shit instead of share XD

  • @isaacsante9989
    @isaacsante9989 9 років тому

    what exactly is the job of the analyst?

    • @buk6708
      @buk6708 8 років тому

      research, writing docements, small media.
      i worked in accounting, i am a carpenter now. i work with several ex-analysts that hated it, whom are also tradesman now.
      more $$ and less work lol. im 25 and make 25$ an hr.

  • @arqamkhan633
    @arqamkhan633 2 роки тому

    2;05 rich dad is angry !

  • @thatdopedude7217
    @thatdopedude7217 5 років тому +1

    A company is selling 1 share for 10k and they promese 500 a month is it real

  • @41Niners
    @41Niners 10 років тому

    umad

  • @ashkenazi0000
    @ashkenazi0000 6 років тому

    AGREE ! Aashiqon ne toh aashiqui ke liye Taj Mahal bana diya ... saala hum ek sandas na bana sake -Biwi paas chahiye toh ghar mein sandas chahiye - Please spread the message to all you tubers.

  • @user-ej5ek7dt3v
    @user-ej5ek7dt3v 3 роки тому +1

    6:00 big swear word

  • @Yaalah
    @Yaalah 10 років тому

    You misidentified the second clause--it's independent. And even if it were dependent, that wouldn't preclude using a comma.
    You can learn more at owl.english.purdue edu/owl/resource/598/01.
    I don't care that your capitalization and punctuation are limited or nonexistent... you've even improved from your first comment. But, given your troll attitude, kindly understand if I vote your comment down, and ignore you henceforth.