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  • Writer's pictureMJ

MJ Pearls of Wisdom - Part I

📈 𝙈𝙅 𝙋𝙚𝙖𝙧𝙡𝙨 𝙤𝙛 𝙒𝙞𝙨𝙙𝙤𝙢 - 𝙋𝙖𝙧𝙩 𝙄 💰

ᴘʀɪᴄᴇ ᴅᴏᴇs ɴᴏᴛ ᴍᴀᴛᴛᴇʀ - ᴍᴀʀᴋᴇᴛ ᴄᴀᴘɪᴛɪʟsᴀᴛɪᴏɴ ᴅᴏᴇs

Dear all,

After yesterday’s historic YouTube Live and today’s run and walk at Quinta do Lago, I decided to start a series of educational posts.

As many of you ask me questions, be it here, on YouTube or privately, I decided to start at the beginning and actually talk about the stock PRICE.

Many of you confuse the notion of price and value. What you need to incorporate here are shares of the company - what we call in finance - Shares Outstanding (SO).

When you take the Tesla price of circa (c. in finance) 800, you then multiply it by SO to arrive at c. 800B market capitalisation.

Do you remember $TSLA priced at c.2000 USD? What happened there? A stock split. Tesla shares just become 5 times cheaper but there were also 5 times more shares out there. The net result? No change to market cap and as you all know Tesla lovers - your beloved company still stayed trading at half of trillion dollars.+

Consequently, you should never make a mistake that something trading at 1 dollar is less valuable that sometimes trading at 3000. Remember $AAPL doing the same “trick” as Tesla?

This is a common “rookie” mistake that I see even people with large amounts of money make.

So, as of today, I want you all 11,200 followers to start thinking of companies as being worth something on the public market (capital markets - stock market here on eToro) - and that value can be found is the Stats page and is called Market Cap.

No more using penny stock term without knowledge, no more worrying about not being able to buy $AZN.L or $BTC ... eToro has kindly allowed us to buy part of a share so you can just put a dollar amount.

So that’s it for today. Let me know if you have any questions & don’t hesitate to Follow and Copy the Portfolio.

I advise many of you who want to learn the trade to put 80% in the Copy with me and 20% to “play with”. Then consider the former as your saving account and keep putting money to take advantage of DCA and compound interest; and the latter as play account where you are ready to loose all the money. This should help you with learning curve and one day becoming an independent trader / investor if this is your ambition. $SPX500



PS. All my investments and portfolio are public. To join eToro please follow the link:

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