A share essentially means a part ownership of a business registered on the stock market.
An individual who owns shares is called a shareholder. Stocks and shares do not merely refer to numbers on a stock monitor screen.
Share prices correspond to the present price for a company's stock.
You may ask: What about the value of the business? Is the share price an accurate measure of the worth of the business?
The whole idea I would like to focus on is this:
If a share means part-ownership of a business, then as a shareholder, one needs to analyze a certain company for investment as if one were going to acquire the entire business.
This applies even if a share refers to partial ownership of a company.
Obviously, we cannot do partial evaluation of a company corresponding to that fractional stake in a business.
The public's awareness about shares
For many years, people have voiced out their opinion to me in diverse manners about the stock market being nothing but a huge casino and that shares and stock are practically poker chips to be purchased and traded for the delightful experience.
An educated, smart investor will view things in another way.
Quantitative analysis means evaluating a business, its cash flow, its liabilities, its debts, how it generates money and many more.
The purpose is to ascertain that:
You do not gamble your money away but make an informed decision about your investments You do not lose, or, as much as possible...