Course 01 · Start here

What a share really is

Four short lessons on the objects markets trade. A share is a slice of a company. A price is not a verdict. A bond is a loan. Compounding is arithmetic, not a promise.

1. 01What it means to buy a shareA share is a fraction of ownership. The price is what the market last agreed, not a label that says cheap or expensive.
2. 02Price is not the size of the companyMarket capitalization is price times shares. That product is the market’s price tag for the equity, and only the equity.
3. 03A share is ownership. A bond is a loan.Companies raise money by selling more ownership or by borrowing. Lenders get interest. Owners get what remains.
4. 04Interest that earns its own interestCompounding means each period’s growth is calculated on a larger base. The formula is simple. Applying it to stocks is not.