Stock

Warning

Over a year old. May be outdated

A stock is a small piece of a company. The more you own, the bigger your piece. If the company issues more stock, each share becomes a smaller slice.
In a private company, team members and investors can own shares, but turning them into cash is hard. That changes when the company goes public through an Initial Public Offering (IPO). After that, shares are easy to buy and sell, so they turn into money.
Valuing a company is tricky. For a public one, multiply the share price by the number of shares. For a private one, it's a negotiation over things like the last funding round, revenue, growth, and how good the management is.

Some screening rules:

Rule	Where it comes from
PSR under 1.5x	Ken Fisher's Super Stocks, which made P/S a popular filter. Fisher often looked for very low P/S, like 0.75 or less. Some secondary summaries use under 1.5 as a practical cutoff.
ROE above 15%
PER under 15x, PBR under 1.5x	Benjamin Graham's rules of thumb. The classic "Graham number" uses 15× earnings and 1.5× book.

Backlinks6