Knowla / Roadmaps / Stocks
Assets · 6 phases · 23 topics
Stocks A path through equities: what a share is, how companies list and pay out, how to read a company's numbers, how valuation works, what chart analysis can and cannot tell you, and how to put it together in a portfolio. It ends by separating long-term investing from trading.
Best after: Market Foundations
Read this first. Share prices can fall a long way and stay down, and a company can go to zero. This is education, not advice. Tax and dividend rules differ by country.
1 What a share is Ownership, listing and the basic facts of how stocks trade.
Beginner What a share is A share is a unit of ownership in a company. Holders have a claim on the company's profits and assets after creditors are paid, and often a vote. Beginner IPOs and how companies list An initial public offering is the first sale of a company's shares to the public. After that, the shares trade on an exchange. Beginner Trading hours and extended sessions Stock exchanges have regular hours, and many brokers also offer pre-market and after-hours trading. Rules and risks differ outside the regular session. Beginner Market cap and company size Market capitalisation is the share price multiplied by the number of shares outstanding. It measures what the market values the whole company at. 2 Corporate events and sectors The events that move a share and the way the market is grouped.
Beginner Dividends A dividend is a payment a company makes to shareholders out of its profits. It is optional, and companies can cut or stop it. Beginner Splits and buybacks A stock split changes the number of shares and the price per share without changing the company's value. A buyback uses company cash to retire shares. Intermediate Earnings reports Listed companies report results every quarter in the US and many other markets, and half-yearly in some. Prices often move sharply when the results differ from what analysts expected. Beginner Sectors and industries Sectors group companies by what they do, for example technology, health care, energy, financials and utilities. Sectors react differently to interest rates and the economic cycle. 3 Fundamental analysis Reading a company's own numbers before judging its price.
Beginner Reading filings and reports Public companies must file audited annual reports with the regulator, and in many markets quarterly or half-yearly updates too. These filings are the primary source for the numbers. Beginner Income statement: revenue, margins and EPS The income statement shows revenue, costs and profit over a period. Margins show how much of each unit of sales becomes profit. Intermediate Balance sheet and debt The balance sheet lists what a company owns and owes at a point in time. Debt matters because it must be paid whether or not the business is doing well. Intermediate Cash flow and earnings quality Profit is an accounting number. Cash flow shows the cash that actually came in and went out, and the two can differ a lot. 4 Valuation basics Comparing price with what the business earns, without pretending to be precise.
Intermediate P/E and other multiples The price-to-earnings ratio divides the share price by earnings per share. Multiples are shortcuts for comparing what you pay with what a company earns or sells. Intermediate Value and growth 'Value' stocks trade at low prices compared with their fundamentals. 'Growth' stocks trade at higher prices because earnings are expected to rise faster. Neither label guarantees a result. Advanced Optional Discounted cash flow, in short A discounted cash flow model estimates what a company is worth today from its expected future cash, reduced for time and risk. It is only as good as its assumptions. Intermediate Where valuation misleads Valuation tells you about price relative to numbers, not about timing. Expensive stocks can get more expensive and cheap ones cheaper for years. 5 Technical analysis basics What chart-based methods try to do and where they stop working.
Beginner Trend and moving averages Technical analysis studies price and volume history to describe trends. Moving averages smooth recent prices to show direction, and they always lag. Beginner Support, resistance and volume Support and resistance are price zones where buying or selling has appeared before. Volume shows how much conviction was behind a move. Intermediate Optional Momentum indicators and their limits Indicators such as RSI and MACD measure the speed of recent price changes. They can describe conditions but they do not forecast reliably. 6 Portfolio and approach Putting holdings together and choosing between investing and trading.
Beginner Long-term investing versus trading Investing means holding for years and relying on business growth and compounding. Trading means shorter holds and profiting from price moves, with more costs and more decisions. Intermediate Diversification and concentration Owning several stocks lowers the damage from any one failing. Holding too few leaves you exposed to a single company, sector or theme. Intermediate Building a portfolio Portfolio construction means deciding how much goes into stocks versus other assets, how that splits across regions and sectors, and how large each position is. Advanced Optional Short selling Short selling means borrowing shares, selling them and hoping to buy them back cheaper. A short position has limited upside and, in theory, unlimited loss. Your ticks are saved in this browser only. There is no account behind them, so clearing site data clears them.
Education, not financial advice. Nothing here says what to buy or sell, and rules and product availability differ by country. All roadmaps .