Nigerian Stock Market: Everything You NEED To Know

[00:00:00] Speaker 1: this is the stock market for beginners i have reviewed over 20 stocks and out of those 20 stocks all of them are making a profit just look at the snapshot in this video i'm going to show you how i select stocks what makes a stock profitable how do you find those stocks that make it and avoid those stocks that fail so if you are ready to start investing in shares and stocks and start growing your money immediately get on board let's do this let's start from the very beginning what is a share a share is a part of a business it's a piece of a business let me explain it this way apple share represents a piece of apple business so if you have a share in apple you have a piece of apple maybe you're not getting that a business in the stock market breaks down their business into smaller parts smaller pieces these smaller pieces are then valued so for example let's say we have microsoft and you're lucky enough to have one you are now a shareholder of microsoft you are now the partner of that business now let's say that microsoft stock one share the one you have is worth a hundred dollars remember they have a hundred stock and you have one worth a hundred dollars it means that in total the value of microsoft on the stock market is 10 000 because they have a hundred shares and one of those hundred shares is worth 100 so we simply just say 100 shares times 100 we get the value of 10 000 the value of microsoft now is 10 000. a while back it was in the news that apple became a trillion dollar business apple was now a trillion dollar business on the stock market and that's because the price of each apple stock multiplied by the number of apple stocks out there was valued over a trillion dollars you get that right now there are different names people use for these things we have things like shares outstanding when your shares are standing it just means how many stocks the company has if you hear market capitalization it simply means okay that company that business they have 100 shares and it's valued at 100 so their market capitalization is 10 000 the value of the business is the market capitalization around the same page you get that part so now not all businesses are on the stock market let me clarify and explain that part better we have private businesses and we have public businesses what makes a business public a public business is a business on the stock market so why do we call businesses on the stock market a public business why do we hear things like oh that business is going public it simply means that yourself or myself anyone across the planet can buy can own a part of that company so it's not owned by private individuals any longer it's now going to be owned by the public any single person can buy it that's why we have public companies and we also have private companies our interest our focus is on public companies now this is very simple let's delve into this a bit let's say there's a business in africa a business that sells yam i can't think of any other product than yam it has to be yam so just calm down let's say there's a business that sells yam when the founder starts that business he probably funds it from his pocket he takes his savings he starts a business he creates a product he sells that product he makes his revenue out of that revenue he pays all his expenses he pays for the raw materials for the seeds for the fertilizers for harvesting for transporting the harvest from the farm to the market and sometimes for advertisements now when he's done with all that if there's still money left that money is now the profit he has settled all his bills after that sale so now his young business is making his profits and that 2000 is his profits you get that and profit is your money can't decide to do anything with that money i guess we're on the same page right now let's look at another scenario this scenario the money made in the market is still 10 000 but this time the expense incurred is 11 000. it happens maybe due to improper planning maybe due to covid unforeseen circumstances in that instance that business made a loss now i'm putting it out there so you know that for every business you see out there whether they're private or public at the end of the year it could make a profit they could make a loss that's a possibility so now where are we going to with this now let's say for the first year he made that profit of 2000 and he's excited he wants to grow that business it's his dream job so this time the next year he's looking to make more profit so how does he make more profit he has to produce more yams that's one option the other option is to reduce his expense that reducing his expense will mean that he's only still going to make 10 000 and probably his expense will now drop from 8 000 in that scenario to maybe 5 000. i mean that will increase his profit by 5 000. but most times reducing your expense is very difficult it's almost impossible especially when there's inflation in a system where there's inflation now in this scenario we're talking about a business in africa certainly inflation is affecting it so how does it go big how does it make more money he has to produce more yams and how does he do that he has to get more farmlands he has to get more farmers he could get farmlands across nigeria he could get farmlands in other countries senegal ghana south africa mozambique and his goal his plan is that by the end of the year he will go from one farmland the previous year to 10 farmlands the next year and if one farmland was giving him 10 000 10 farmlands will give him a hundred thousand are we still on board they're getting it right straightforward so now the goal is to get more farmland so he makes more money the chances of using that 2 000 he made as profit to afford nine more farmland it's it's very slim he's going to need money to grow to afford these farmlands across africa so how does he get this money he really made a profit of 2000. one way to do that is to go to his bank hello bank look i have one business i made 10 000 i want to establish nine more branches so i need a loan from you to build these branches across africa to employ staff that's what i says this is my baby this is my dream i'm sure it's going to work and the bank will be like dude dude say no more we have money to loan you but here's the deal you're going to pay us extra 17 to 25 percent what or what i'm doing all the work you're just giving money which i'm going to return the bank will be like no no no dude dude dude we get it get it we know you're going to return our money definitely that's guaranteed but um there's a cost to borrowing money and that cost is between 17 to 25 so don't worry the money will be ready immediately once that money is ready you can do anything you want so now our businessman our yam seller can decide to take that deal and he's going to get the money now but when he makes his profit he needs to pay back the bank the money is loaning from them you remember it's not the money he loaned it the building for a set period and it's not just that he's going to pay them interest back 17 to 25 percent you're going to pay that back additionally she has increased the expense now most businesses have no choice they go through this these businesses will buy the bullet and just take it take that loan in the hopes of making massive profits that will cover the expenses that will cover the loan repayments and that will cover the interest which is fine but there's another option the other option is to go public yes this is the thing this is where they value the business say oh okay um you can get money from the public how do you get money from the public would value this your business i am going to sell this business to the public you're going to put your business on the stock market you're going to offer your business to the public to be part owners with you they're offering the money to expand your business and the great thing the good thing about this method of offering it to the general public to buy is that you don't need to repay them anything they're putting their faith in you they believe in your young business they believe that this business is going to go from today's value it's going to go to a better value tomorrow and that's why they're giving you that money they have the hope that as part owners this business should make enough profits i don't benefit from and this is where we have the stock market so you can see i'm breaking this thing down to the business there's something about the stock market that mystify people like they hear things like algorithm robo trading math formula and so on and so forth it's basically a business simple when apple went public they took money people bought those shares from apple apple said oh this is our business in 100 pieces this is the value of each and people bought it and apple took their money and spent it on whatever they wanted and now they've taken the people's money this will not owns part of that business now let's ease into how the price of shares are determined who decides if the share is 10 naira 10 dollars 100 naira who decides that price is it the government is it the security exchange who determines the price of the company is it apple is it the company itself that decides the price of that stock we have investment bankers we have professionals that will carry those shares and they'll offer it to other institutions they offer it to banks saying that okay apple is going public they're selling their shares for a hundred dollar each are you interested now look if you invest in apple you'll become part owner and apple right now are making iphones which everyone is using we just found out that they are coming up with the technology where the phone in the next five years it'll just be a ring a ring that you put on your finger that will be the new iphone samsung does not know about this technology no one else knows about this technology and you know apple most times they deliver so they go out and market these shares like that and offer it to people now people out there these institutions these initial investors might look at it and be like okay you know what i believe in you take the hundred dollars that is literally the only time that a company can decide the price after then virtually no one decides the price of a stock the price of a stock is decided by the market don't worry i'm not going to confuse you let me pam make that simple you have this shirt this shirt that belongs to you you're part of shirt and you're walking around and someone walks up to you and say hey i love this shirt this shirt is perfect um can i get it and you might be like oh yes i got it from pep i got it from shoprite and you'll be like stop stop stop stop no i want this shirt off your back right now i want to buy this shirt off your body right now how much are you going to sell it to me now they are offering to buy your shirt so now the choice is yours to either sell that shirt or to turn down the offer but you know they're just saying that there's always a price for everything so you might be like hold on i don't mind selling this shirt to this guy i'm going back on to get another shirt i bought this shirt for a thousand now i could sell it for five thousand now take that money go back to the market and buy five more shirts so i could turn this one shirt to five shirts if i sell this to this guy for five thousand now so you tell them um i'm sorry i don't feel like selling it but if i'm going to sell it i'm going to sell it for five thousand now they can decide to give you five thousand right there and then take the shirt that is on the offer you've given them a price they can close the deal pay for the shirt and walk off that is a completed deal they have that option or they might say you know what i don't think this shirt is valued at five thousand i think you are taking a piss so here's it we're going to give you three thousand for the shirt we feel three thousand is even generous now you have two options you can still say no i'm not selling a shirt or you can take the offer the moment you accept the offer and give them that shirts you sell that shirt to them the price of that shirt is now three thousand anywhere in the world nobody can dispute that fact once you agree they give you your money you give them the shirts the transaction is concluded it is recorded anywhere in this world that that shirt even though you bought it for one thousand even though you've used it for some days or few years that shirts value that shirt among every other of his counterparts that particular shirt it's valued at three thousand nobody can dispute that fact that is how the stock market works that is how price in the stock market is determined so let's go back to our example let's say you have apple shares you bought the apple shares for a hundred dollars and you're holding on to that share and say i'm not going to sell these shares no matter what but you know what if somebody is willing to pay me three hundred dollars or three hundred now for this year and bought a hundred dollars a hundred now if somebody is willing to pay me three times the value i'll sell it right away so in the stock market the price of share the price of stock changes when people close deals on the stock market so that share that stock you bought from apple for a price of a hundred dollars if you sell it for 110 dollars all over the stock market it will be recorded that somebody just sold this year for 110 dollars so now going forward the price of this share in the market is 110 dollars it's good to register there now remember we have so many of these shares scattered around the world somebody somewhere would be like oh i bought this thing too for a hundred though and somebody somewhere sold it for 110 i'm ready to sell for 110 so they sell his own so that's another person selling for 110 the price is not changing it's moving flat somebody somewhere might do credit i'm like ridiculous i know i bought it for a hundred but for an extra 10 i would not even sell it for my extra 10. i won't sell it for an extra 20. probably i will sell it if it's 150. i want to make 50 of the value i bought it that if i was to sell it to me if somebody in the market that is interested in buying that share the person is willing to pay 150 for that share the price automatically changes everyone in the market to 150. that is how the price is determined that is how the price rise in the stock market people offering more than the last market value to acquire the share to acquire the stock straightforward and simple now the opposite thing happens when the price goes down it means that yes i bought it for a hundred and other people in the market are looking at it like you know what we that don't have it we know you guys paid a hundred for it but um we feel it's too pricey so we are willing to take it for 90. now if nobody accepts those offer everybody that owns the share say i'm not going to sell it for 90 that's ridiculous it's valued at a hundred nothing happens nobody accepts it but if someone accepts it and be like you know what i know i bought it for a hundred but give me 90 i'll take 90 for it and automatically the price of that share drops the price everywhere in the world would now move from 190 because somebody just executed a transaction somebody just concluded a deal for it at 90 even though it was previously worth a hundred that is how the price goes down now your next question should definitely be why would anyone in their right mind who bought this for a hundred now sell it for 90. that's making a loss who will throw away money there are many reasons to change your mind in the stock market maybe there's an emergency the person needs money and he doesn't have cash on hand and all he has to his name is that share and he's looking to sell it asap he needs cash right now to sort out his emergency it goes to the stock markets i already have this thing for a hundred i just bought it for a hundred um i need cash right now he looks at what is an offer nobody's offering a hundred nobody's not offering above a hundred the next offer there is 90. yes he bought it at a hundred but the offer on grand is 90. he needs cash right away the emergency cannot wait that's a reason for selling a share or lower than what you bought it but that is just one reason somebody could have bought that share that apple share for 100 believing that it's going to go to 200 in a few days or in a few months time the information you had about apple was fantastic these guys are the ones making iphone every year they make macbook they have apple tv so everything looks promising you are so sure that the value of that business will continue growing hence why you paid a hundred dollars for it so why would you sell it for less why would you change your mind a scenario is if you discover so after buying it for a nice price you now discover you had some news somewhere inside information that oh hold on i'm hearing rumor from apple that they would not make iphone next year for some funny reason they will stop the production of iphone you can immediately change your mind like whoa i bought into this because of the iphone brand because they sell iphones and i feel that people keep buying iphones hence why they'll make money able to get profit from that but now there's new information that they'll stop producing their iphone so i think this business will crash i don't think they'll make enough profit next year i think that when more people hear that they're not making an iphone they'll come and take their money out of this business so because of this new information i'm leaving this business early so i'm going to sell it at 90. i feel that some people won't sell it for 50 if they hear so let me quickly sell it for 19 now but my losses i'll leave that's another reason there are several reasons why people would be willing to take losses on something they were so sure would grow so now you should be thinking whoa whoa whoa whoa this is not as simple as it sounds you know you're not saying that what if somebody finds out this information or that information what's going on here so how do i find out most of this information how do i know things about this business so so another reason why they call the businesses public they say oh it's a public company is that because it's a public company public companies are meant to display all the information to the public so for example a company that's not a public company does not have to share any information with anybody relation to the people concerned or a public company because anyone can buy into it and some people before they buy into it they want some information they want to know what was last year's revenue revenue is the sales they make what they sell they want to know what expense was they want to know what profit was so to make that decision easy for people public company put all their numbers all the information online so now there's one called an income statement don't worry that's just big grammar income statement is a big grammar that one is so unnecessary income statement even hearing that statement is giving me a headache it's just simple math everybody has an income statement like you in your life now you have an income statement there's no human being there's no organization that does not have an income statement so let's make the income statement very simple you right now your salary is a hundred thousand so that's your income statement a hundred thousand is your revenue because that's your income that's your salary the money that you get every month after working you get that money that is your revenue on your income statement so what else is on the income statement you have expense so now after that salary they gave you you pay rent you pay transportation you pay for internet you buy food those are your expenses see income statement that word impossible is so unnecessary and so bogus just don't worry about it it just shows how you get money how much you got and how you spend that you pay tax now don't you pay tax you pay tax you pay pension it's part of the income statement so let's go back to public companies the company like apple release is income statement you see how much they made in total for that period so okay we made one trillion dollars that's the money that they made income after that income will now start seeing expense we'll see cost of goods cost of goods is very straightforward should be apple made all these phones all that gadgets remember to make the phone they need to go and buy aluminium they need to go and buy titanium they need to buy glass they need to buy chips they just get the software person to put it all together the hardware person the engineer to design it make sure it's functioning make sure it does not overheat make sure you cannot just bend it down to break all those people would have worked on that phone before apple nankai is the finished product they put in a box a package and they say okay the price is one thousand dollars and businesses will now buy those phones from apple and now i will sell it again for their own profits so apple needs to pay expense that the cost of goods is everything apple spends money on to produce the phone to give you the finished product then we have things like advertising costs our new iphone is coming it has this feature it has this feature you know you pay for those adverts you put it on tv you put it on the super bowl uh anywhere you advertise products it costs something you know that's an expense you'll take it out of the total sales they made after that apple needs to pay tax they will remove the money from the income now if after removing all the expenses you remember i said apple made one trillion let's say all the expense now calls out to be one trillion one hundred billion dollars one trillion one hundred billion dollars it means that will minus the one trillion from the expense from the income right but there's still one hundred billion dollars that are that is the expense that apple need to pay for that means apple is making a loss they've lost money because they are overspending more than they sold some of you are like that some of you are making losses every month when your salary comes transportation will take like 30 percent shelter take another 30 percent feeding will take 20 percent money you send around to people take another 30 percent already making a loss so just like we can make losses from our personal expenses income and expenses businesses also can do that it's not a tablo it happens in 2020 during the pandemic year a lot of businesses made losses that is because no one anticipated the pandemic to lock down and all that so a lot of business made losses so it happens it's it's not always bad businesses that make losses but we all know that we want to be associated with businesses that make profits not businesses that make losses so that's our income statement quite straightforward it just records in this place the money that comes in and how we spend it and if at the end we have profit left there's another report that people use big name for they call it a balance sheet and actually sounds like this aggressive word balance sheet like but balance sheet is also very straightforward it's something that is our day-to-day life this report shows your assets and your liabilities now if you own a house that is an asset because it's your property something that has value that you have that house could be worth 100 billion so you have an asset of 100 billion liability is an expense an expense something you owe someone is an expenses something you owe someone so if you have a loan with someone that will be recorded as a liability so remember you have this asset of 100 million the house worth 100 million well if you have a loan of 50 million and that 50 million would be your liabilities report while the asset 100 million assets will be in your asset roots now why is this useful there's something at the end called equity equity another big world it's not necessary so now you own a house worth 100 million right so if they ask you how much is your worth how much are you valued like you mr man since you own a house of 100 million what's your value if you sell you now how much will you get like what is your value you will say 100 million because you own the house that is worth 100 million so if you need cash right now you can quickly sell the house for 100 million and that is not your what that is not your equity your what is everything you own minus everything you owe if you are owning zero then your worth is 100 million but in this case remember we say you have this loan of 50 million so we say what is your what your what is not a hundred million your what is your hundred million your assets minus a liability which is 50 so you are worth 50 million get that so that's what the balance sheet is just showing it's showing that oh as a business we have all these assets we have offices we have equipment we have products that we've sold but they've never paid us money so those people are still owning us money it's going to come it's not in our bank yet it's coming it's called receivables we have it out there now all the businesses also have the liability part this is where you see that loan if they have loan it will be in this part if they're owning money it will be in this part so businesses work on credit a business can be running generators you know backup power and the diesel supplier will come and supply the diesel every 30 days you could tell the diesel man that don't worry i'll be paying you every 30 days after you deliver your diesel i'll pay you within the next 30 days if by the time of this report that 30 days is not up i've never paid them it will be in this liability part it's called accounts payable people that have offered me service that i am to pay and there are other lines in this section the other liabilities that fall under this report now you might see something like current liabilities or current assets current liabilities or current assets is the same thing as normal assets and normal liabilities the difference is that when they put current in the name means that if it's an asset it means that you're expecting that asset you're expecting that money in the next 12 months within the next 12 calendar months this money will have entered if it's liability if you're owning it within the next 12 calendar months you should pay that ability whether you own it or you're owning it it means that in 12 months the one you own to come to you the one you owe you have to settle it that's what that means so i hope that's not confusing so anytime you hear financials income statement balance sheet i don't want you to start freaking out it's something that is in our daily life that all these finance people are putting big grammar to it to scare us now we're moving on to the profits you see the goal of every business is to make a profit why would you invest in a business that will not make profit all of us when you are looking at a business you're not invested talking to investing it's because of the profit there's nothing return the goal is for that business to make a profit every business wants to make a profit right so why is the profit important as a shareholder you're a part owner of that business so when the business makes profit you own part of that profit it's your entitlements and you should be like wait wait wait to the bros bros are you saying that when when a business when i look at apple's income statement and i see a profit of a hundred billion am i entitled to that as a shareholder yes you are you are that is part of your money that is a that is the reason why you're a shareholder you've bought into that business you've you've said that i'm part i'm buying into this business i'm a part owner so every profit they make is your entitlement and those of you that owns stocks you back just but calm down nobody has given profits nobody is even telling me about these profits there's something called a dividend a dividend is profit did you get that let's say i invested in apple apple now made a profit of 100 billion apple can decide to say okay from this profit you made 80 percent of the 100 billion that's 30 billion the owners it belongs to the owners of the business we have to share it among the owners the owner should share this profit you are part of the owner that profits but now that's that profit will now be distributed among everybody that owns the share that is where you start you're saying that oh i only buy shares that a dividend dividend share that's the reason i want i want to be making profit from the shares i own i want it right away but if you're looking at the stock strictly from the eye of oh i'm buying the stock of dividend that can be short-sighted it's not the end or be all for example you could own an apple stock the dividend there can be nine dollars so if you own one store for the whole year 12 months the profits your own show that profits is only nine dollars and you should be like that is too small why would they just give me nine dollars out of 30 billion okay that 30 billion is going to be shared among all shareholders now apple has millions of shareholders so when we divide that 30 billion by the millions of shareholders they have it might end up to be just nine dollars per person you get it that is where we now get dividends dividends is the part of the profit that is being shared with the shareholders warren buffett gets dividends from coca-cola through coca-cola every year after selling that super serum and people are drinking sugar aspirate and so on and so forth they make their income they pay their expense profit is left a part of that profit is not going to be distributed shared among all the shareholders now warren buffett gets as high as 600 million dollars a year just from coca-cola paying part of that profits and you'll be like whoa whoa this is nothing why is this old man getting more than all of us this profit is shared per one share so they're sharing the profit nine dollar per share if you have 20 shares that means you will get 180 dollars so you are getting 180 somebody that has one share would only get nine dollars do you understand so ron buffett could have 80 million shares he has 80 million shares and they're giving nine dollars for each year so we just do 80 million times nine and that is where we're getting 700 million from so it's not cheating he has acquired over 80 million shares so you too if you acquire a thousand shares when it's time for them to pay dividend they won't just pay you nine dollars for the thousand share no they will pay you nine dollar per share and for your one thousand shares you would get nine thousand dollars i believe that's straightforward you understand that so now we move to growth stocks so stocks and shares that pay dividends are referred to as dividend stocks dividend stocks it means that they use a part of the profit they distribute it back to shareholders now you might ask why are they not sharing the whole thing 100 percent are you a thief why should they share the entire profits and eat it apple might need other things they might need to do new offices in gombe state in bauchi why should they spend all the profits just to give you back you can use they can use the part of that profit to develop the business to put the business in the position where they few in the coming years they will make larger profits so when the business are invested in is saying that okay out of our profits we are sharing this part of it does acquiring that they should share the whole thing come on now who eats all that profits so now we are moving to growth stocks growth stocks are the same with dividend stocks let me explain dividend stock and a growth stock that are the same thing that both normal stocks the difference is that growth stock at the end of the year they are not paying you dividend example if you own gogo gogo stock google to do your search google youtube google gmail if you own that stock at the end of the year they don't pay you any dividend they don't another example is disney you know disney disney disney mickey mouse disney marvel disney fox disney star wars and so on and so forth yeah disney they don't pay dividends now i purposely use these two examples google are not paying dividends because at the end of the year after making a profit they take that profit and put it back into the business they get better technology use the extra profit in hiring more intelligent people use the money to carry out better research and so on and so forth there's this understanding between apple and investors in apple that hold on don't come and be waiting every year for profit we are using the profits to grow this business so that is an example you might not be like wait wait so why am i in this business if they don't pay me a dividend why am i investing in them in the stock market you don't just make your money from a dividend or dividends that's not the resource of making money remember earlier we mentioned when you buy a stock at this price and somebody wants to buy it off you now and you'll be like okay i can sell it but i will sell it for a price higher than much about it that is making money in stocks or in shares through capital appreciation it simply means that you are making your money by selling it at a higher price than you bought yesterday all the stocks i reviewed i'm showing you the percentages that go by at the start all the stocks i showed you at the start that i reviewed and i showed you this percentage they are all capital appreciation it means that when i did those stocks the price was one and now price is now 10 that is what capital appreciation means you are making money by the value of the business of the share changing upwards the second way is through a dividend through dividends so back to gold stock i've explained the example of google what about disney why is this is not paying a dividend the reason is different from that of google disney used to pay a dividend they were paying a dividend yearly previously but that changed when they started making losses so that year we all went to the cinema and watched avengers infinity wall and avengers endgame all that time all the profit they made then they were paying their shareholders a dividend but after avengers endgame covet happened there was a pandemic there was a lockdown people were no longer going to the cinemas and they were making money from people going to go and watch movies at the cinema so most of those movies they produce was postponed so movies that should have aired in 2021 and 2022 were extended were moved to 2023 and 2024 that's just one part of it they also make money through that theme park so disney world disney park because of the lockdown they could not make money in 2020 for that this was the core of the revenue we had so when the revenue call was affected it could not afford to pay a dividend hence why it stopped paying dividend and since then they're yet to continue but there's hope that now things are getting better they would continue paying dividend resume to paying a dividend and you notice since covid the disney stock price has been affected it has crashed it has gone down it's not magic it's not any algorithm it's not any math it's simply that people noticed that they were making less money because people need of team packs of disney world who have been affected so people were saying you know what i was willing to sell this stock for a hundred dollars before but i don't know where things are going to stabilize i don't know when disney will continue on making the kind of money they were making the avengers endgame i don't know when they will go back to making that sort of money so let me sell that shit now i got invested in something else like tesla or netflix or microsoft everyone can put their money somewhere else and when i believe disney is beginning to pick up i'll come back to it most investors did that now you might be like oh where they sell at a loss not everyone was selling at a loss you could sell at a price lower than the market price but not be at a loss so those people that bought disney when it was ninety dollars now when we had avengers endgame disney stock was in this example two hundred dollars right fantastic they bought at ninety dollars now it's two hundred dollars they are still holding it they're not selling it yet now covid now happened well the budget at ninety dollars covid happened people started selling it also it was two hundred dollars somebody was like you know what i can take it for one hundred ninety dollars somebody like oh somebody just sold it for one hundred ninety dollars people will need to buy that say are pricing for one hundred eighty dollars you know what i'll take that remember i bought it at ninety dollars so i'm making a profit and a lot of people selling we are not making losses we are just selling it's lower than the current market value they only start making a loss start losing money when they sell it below the amount they bought it but they can decide to sell it for a lower amount if that lower amount is still higher than the amount they bought it that's still a profit i hope i'm not confusing so that's the explanation for growth stocks now people look at stocks in different ways you might be like oh i'm investing in gold stocks because gold stock grow faster i'm investing in dividend stocks because dividend stocks are matured businesses are businesses that are steady and all that so no no the market is much more dynamic than that there are dividend stocks that make fantastic better appreciation and there are gold stocks that are growing at a very slow pace so because it's a gold stock and they don't pay dividend doesn't mean that the price will skyrocket and because it is a dividend stock and they pay dividend doesn't mean that the price will go slowly because they're paying dividends no it doesn't work like that but people tend to generalize it and say oh your stock grow faster the prices go higher faster and dividend stock is this and that no it's it's it's never black and white there are gray areas here but if you're taking shares and stock if you're taking as what they actually are which is taking them as businesses being managed by human beings you would make better decisions you would understand this thing better and make better decisions remember that example we used earlier the example of warren buffett receiving over 600 million dollars every year from coca-cola as dividend okay coca-cola share price has been over 60 dollars for a while now at the start of 2024 it has been hitting 60 dollars for a few months now baron buffett bought his coca-cola stocks in 1989 and is still holding them over 35 years later that is long-term investing now i understand if you cannot see beyond your nose i understand that it's totally natural you're not aware though let's say warren buffett own 80 million coca-cola stock if you want to own that same amount of stock to be enjoying over 600 million dollars every year you would need to pay 4.8 billion dollars to afford that number of coca-cola stock meanwhile when warren buffett bought this stock in 1989 it was only valued around 150 million to 170 million dollars so you see the difference here if you have to do it now you see you're spending how many billion to be getting 600 million every year but because of his long-term investment strategy he paid under 200 million dollars for these coca-cola stocks and now coca-cola is giving over 600 million dollars a year that is only possible when you practice long-term investing i bought 5 000 of these bank shares in 2019 each one was worth 68 cobo back then in 2019 right now that same share each one is worth it there in four years my shares has gone over one thousand percent this is a share not cryptocurrency now i could have sold when my profit was 50 i could have sold when my profit was 100 percent i could have sold when it was 200 300 600 900 but staying in it holding for the long run having a long-term plan made me hold on to this talk till now that my capital appreciation is over a thousand percent so what's the goal here the goal is to make this a retirement plan to accumulate so much of this share that after some years the dividends they pay me will be similar to that coca-cola is paying warren buffett that's long-term thinking i'm not saying this particular stock will do that i'm just giving an example of the advantages of investing long term not just investing to make 50 and going out so when you leave the market after 50 profit what else what happens now i'm just asking if you make a hundred percent profit now i'm sure you invested so you now have a hundred percent would that hundred percent in profit change your life would that hundred percent in profit buy you a house would that hundred percent in profit feed you to a hundred years old so you have to start strategizing have to start thinking ahead with these investments now with everything i just told you now there's something called risk when it comes to the stock market the stock market is different from the bond market the bond market is when you borrow your money to someone you borrow them the money so they have to pay you back the money the stock market is different the stock market you are buying into that business you are taking the responsibility to say that take my money do whatever you want with my money i won't own this business it means that if the business crashes tomorrow and they say they cannot pay you back the amount you put into the business you cannot do anything about it you cannot sue anyone because you took the responsibility of giving your money buying that you are buying you are not loaning you are buying into the business you are not learning the business money so there's risk there the risk there is that your money can lose value just when investing in disney were doing fantastically well till covid happened and no one was expecting covid no one was expecting the shutdown and it happened and the number of people who were buying when it was very high when avengers endgame was erring lost money because it was shortly after them they crashed at it and a lot of them that bought it at the peak had to quickly sell at the loss disney is not far from going back to where it was they just need to drop two to three fantastic movies movies at the level of avengers infinity war and avengers endgame if they can do two to three of those movies the disney stock may skyrocket again so just be aware of the risk at this stage i would warn you of the mistakes people make when they are entering the stock market the two major mistakes i'll tell you about emotions and not having a mind of your own when it comes to stock no matter what even someone that reviews stock let's say the person is reviewing stock at a hundred percent all the stock you have reviewed are making a hundred percent profit a thousand percent profit even at that don't be a sheep when someone says oh this is what i'm investing in i've reviewed the stock for you i've reviewed is a fantastic business i'm going to invest in it the ball is still in your courts to decide to take your money and buy into that store into that share it is your decision no one else's so if you see people investing in disney oh disney is actually isn't it cheap then i'm gonna buy it now oh let me buy microsoft or apple okay no i watched a stock review of lockheed martin i watched a stock review of of zima biomet i'm just getting into it because somebody reviewed it because somebody said his cousins friends wives uncles auntie knows somebody that works in those companies and they're about to make an important announcement so that is leading you to make a choice it is your responsibility a mistake i see most people make is that they just go to twitter they go to youtube they watch videos about stock they quickly write the name of the stock to go and buy it because somebody just told them that found out that the stock is going to blow up in next two days here's an example after watching this video search on youtube market collapse you'll see millions of videos about market collapse oh the market is crashing the government has destroyed the market the market is coming to an end the stock market is all red look at how many videos people keep releasing on them two different period there were a lot of those videos last year there are those videos already showing in 2024 this year so far those videos were in 2022 and if you're just listening and just selling and selling and selling you know how many mistakes you have made and it's also the same thing the other way around instead of searching for red market crashes also search for stocks to buy now you see a lot of emotional videos messages saying that oh this talk is going to blow up buy now and buy now and look at the hundreds of stock that they're asking people to buy now now look at the performance of those stock from the time they publish those videos till now are the performances matching the promises in those videos can check that letter and remember i mentioned emotions earlier understand if you are still new to the stock market when you buy a share you would be watching your performance closely every five minutes you'll be looking at your chart oh is it going down maybe i should sell low maybe i bought at the wrong time maybe i should sell you are being emotional with your money look it's never pleased anyone to be emotional with money you have to be logical with money trust me you always have to be logical and if you listen to everything i said in this video and understand these businesses the way i explained it you will not need to be emotional you would know why business is making money you would know why the numbers are performing and you buy it knowing that you're holding for the next 5 10 15 years so your next question at this point should be how to buy shares how to buy stocks this is the simplest question you just simply have to find a stock broker and don't worry don't worry i'm not asking you to go around your city looking for stock brokers you can actually find stock brokers right there where you're sitting right now after this video just go to your app store go to google play store and search for stock broker you see options here in nigeria we have shaka we have trove we have bamboo these three are the popular ones that allow you invest in nigeria stocks and also invest in international stocks we also have stocks that allow you to invest in nigeria stocks and these apps are very easy to use it's just like a banking app we have afi invest they have a website you can use the website or you can get the app the app is called afi investor 2.0 we have arm stock trade we have meritrade we have scambik stock brokers and so on and so forth so get these apps go to their website register to your kyc they ask you similar questions to that of a banker and once they verified you you're ready to start buying stocks you're ready to start buying shares it's as simple as that you just come back watch this video again follow the principles and to guide you in selecting stocks if you have any questions let me know in the comment section below anything you feel like accent and i'm going to be there to assist you think you've learned everything about your money in this video why not watch this next video you will be surprised what what you don't know if you like smash the like button please remember to subscribe