How The Stock Market Really Works
Most people understand what the stock market is and that a bunch of suits driving fancy sports cars use it to make lots of money. At least I think they do, I know I do. Unfortunately, the complexities of the system often intimidate the rest of us without suits or fancy sports cars (damnit) into avoiding it altogether. Hopefully I can help by providing a simple overview of how it all works without all the stupid nuances that I am convinced exist solely to make it complicated.
It helps to look at it from a company’s point of view so imagine you’re just starting a business and you need to buy supplies, equipment, advertisements, and if you’re lucky maybe an employee or two to help you out. The first place people typically turn is their credit card which sort of works but it has its limits. Ideally though, they persuade an investor to give them a ton of money in exchange for partial ownership of the business so that if it ever takes off they will all make even more money. Usually they fail and lose the money but occasionally the business gets lucky and starts making truckloads of cash and the lucky investor who decided to take a chance with them wants to collect his reward.
