Ever heard of Mr.Warren Buffet , the so-called god “Oracle Of Obama”.If you have you would no doubt agree with the heading of the post.When at the age of 11 ,we guys are busy playing with toys and doing all crazy this guy had started his journey on the Glory Road i.e. Stock Markets and the stepping stone in this Journey would be the Berkshire Hathaway which he is the CEO.
He started investing in stock markets via buying shares at the age of 11 and in recent interviews he regretted the fact that “i was late to join the Stock market”.Boy!! There has to be some explanation to that.What is Stock Market.Is it the golden goose laying golden eggs.
Ironically, it is but not without caution and you need to educate yourself fully as to when and how will the eggs be laid.
Stock Markets is the single most lucrative and legitimate capital generation techniques for i don’t consider extortion,money laundering to be legitimate:-)
What are Stock Markets??
Imagine being an employee in a high profile company with a good lucrative salary and all.What does that give you.A steady income flow to spend life luxuriously and probably save something too.
But, imagine being a co-owner of the same company or rather many companies.Whoa!sound stupendous, isn’t it.This is what Stock Markets are to my knowledge.
Stock markets is the medium which allows corporates/companies to raise capital by inviting the people to become the stakeholders in the company via buying the shares in the equity market.This holds good for companies who want to going public so to say.
There are companies who prefer private equity too via the venture capital(VC) and various other modes but that’s not what I can be a part of.So,why talk about it.
Companies planning to go public decide the amount they need to raise from the public and then divide the total amount into the number of co-owners they wish to have (number of shares they need to give out).On this basis,the price of the share is decided which can then be purchased by people by various ways I will talk about later.
Now,even if you own even a single share of a particular company you become a co-owner of the company no matter in what capacity.Your investment is now linked to the Company’s growth in the future.
I hope i have brought out a simple explanation of what a stock market is.But,unfortunately stock market is much more than this.It is a huge system in itself and a lot of knowledge and research is required to understand and invest in the Stock Market.
Now,I am no finance guru here.So,for those who don’t think I am good enough at explaining i am glad to accept that.Albeit,i will give two citations of what stock markets are
1. For the Hindi Movie Buff’s- Remember the movie “GURU” ,Abhishek Bacchan a.k.a. Guru Bhai who wants to go to public to expand his company
PS: a dialogue i vaguely remember “Hum public ke pas jaegne,public ka paisa lagayenge”.And in the last defining moment of the movie,the guy is holding a shareholders meeting in a football ground.Good Lord!!
2. For the avid reader, “Not a Penny Less,not a Penny More” by Jeffery Archer cites the working of a stock market though in the negative scene.But,did somebody tell us that in order to avoid wrong doings we should know what the wrongs are.
PS:I owe my initial understanding to this book itself.:-)
Will bring out the technical aspects of the functioning of the Stock Markets in the later posts.
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