Public Equities

What a public share actually is, how equity returns are made, how the market prices a company, evaluating one specific stock, its risks, costs and taxes, and where it fits in a portfolio.

Owning a piece of a listed company

Lessons

• What a share actually is: last in line, and why that is the point — A share of common stock is a residual claim - everything that is left after every other claimant has been paid. That single fact explains most of what equities do. (9 min)
• Where an equity return comes from: cash paid out, and cash kept in — Two sources, one pool. A company either hands you cash or reinvests it on your behalf - and a company that reinvests is not withholding your return. (11 min)
• A continuous auction: what the quote is, and what it is not — The price is what the marginal buyer and the marginal seller agreed a moment ago. It is a fact about two people, and it is not a valuation. (12 min)
• Appraising one company: the figures, and the growth already in the price — A practical pass over one listed business - what it earns, what it owes, what cash it keeps, and what the current price is already assuming. (14 min)
• What it costs to own: drawdowns, fees, spreads and the tax on turnover — The risks and the costs of public equity are different in kind. One is mostly survivable; the other is certain, compounding, and largely within your control. (13 min)
• The job public equity does: growth you can sell on a Tuesday — Long-horizon growth plus daily liquidity is a combination no other class offers - and the price of the liquidity is a visible quote that invites you to use it. (10 min)

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