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  • MJ

MJ Pearls of Wisdom - Part I

πŸ“ˆ π™ˆπ™… π™‹π™šπ™–π™§π™‘π™¨ 𝙀𝙛 π™’π™žπ™¨π™™π™€π™’ - 𝙋𝙖𝙧𝙩 𝙄 πŸ’°

α΄˜Κ€Ιͺᴄᴇ ᴅᴏᴇs ɴᴏᴛ ᴍᴀᴛᴛᴇʀ - ᴍᴀʀᴋᴇᴛ α΄„α΄€α΄˜Ιͺα΄›Ιͺʟsα΄€α΄›Ιͺᴏɴ 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 β€œtrick” as Tesla?