Owning a share means you own a piece of everything: cash, buildings, patents, and a claim on future profits.
| Why companies sell stock | Why investors buy stock |
|---|---|
| Raise money to grow the business | Expect the company to become more valuable |
| Avoid taking on debt | Earn dividends (a share of profits) |
| Allow founders to cash out partially | Gain voting rights on major decisions |
Market Cap = Share Price x Shares Outstanding
Going Deeper — what does retained earnings actually mean for you? If you own 1% of a company that earns $100M and pays $10M in dividends, you got $0.1M in cash and another $0.9M was retained by management on your behalf. That $0.9M does not vanish — it is either reinvested into the business (raising future earning power), used to buy back shares (raising your ownership stake), used to pay down debt (raising the value of equity), or sitting on the balance sheet earning Treasury yield. Whether those choices create value for you depends entirely on management's capital-allocation skill — which is the topic of val-10. AI prompt: "For this ticker, compute net income and total dividends paid over the past five years. What percentage of earnings did management retain? Is the retention ratio rising or falling, and what does that suggest about management's view of future investment opportunities?"
Sit with the ideas.
A company has 1 billion shares outstanding and each share trades at $50. What is the company's market capitalization?
Open your first paper position
Pick a company you already buy from — Apple, Costco, Disney, whoever — and paper-buy 10 shares. Write down WHY you'd own it: what they sell, why you'd be a customer, why you think the business will still be around in 10 years.
Open paper portfolio →Practice mode — simulated trades, not investment advice.