Stock
- Owning a stock means you own a small piece of a company. The more stocks you own, the bigger your piece of the company. If a company sells more stocks, each stock is worth a smaller percentage of the company.
- When a company is private, team members and investors can own shares, but it takes work to convert these into money. This changes when a company becomes public through an Initial Public Offering (IPO). This allows shares to be bought and sold easily, turning them into money.
- Valuing a company can be complicated. If it's publicly traded, you can multiply the share price by the number of shares to get the company's worth. But for private companies, it's a negotiation based on factors like the last financing round, revenue, growth, and management quality.
- PSR should be under 1.5x: This is linked to Ken Fisher's Super Stocks approach, which popularized P/S as a key filter (often seeking very low P/S, e.g., ≤0.75; some secondary summaries use
<1.5as a practical cutoff). - ROE should be above 15%
- PER under 15x, PBR under 1.5x: These are Benjamin Graham heuristics (the classic "Graham number" uses 15× earnings and 1.5× book).