Study Hall: Stock Investing 101 with Quentin Martin

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My graduates from my school being force backdrop drop drop b drop. This is how I kind of explain stocks when I teach it to my students that it's kind of like a giant pizza pie, right, with like a million different slices, and then each slice represents a share of a company, right. And then if you buy one slice of Nike, now you're part owner of Nike.

Right.

And then obviously the more slices that you buy in the pie, you have a larger ownership of that pie.

Right.

But all publicly traded companies that's on you know, the stock market, anybody can become an owner, and by buying ownership, whether it's in Snapchat or Facebook or Google, now you're a part owner of that company. And if the company does well, then the stock price goes up. If it doesn't do well, stock price goes down. And that's kind of like a real easy way to understand it. But that's kind of my take on it.

I think that's like the baseline and premise of it. Like, right, like we want to own shares, like we know what shares are, then we want to delve into Okay.

What are we owning? Why are we owning? Right?

We got the have right we can go to different places, be it e trade and share, a builder and schwab.

And can we just talk about that because a lot of people might not know. I'm glad you brought that up because I get that course to sometlfs too, like how do you buy stock? So it's relatively easy to do now, right, Like they have apps like Robinhood, like you said, scot Trade.

E Trade stuff like that.

We you can just go online and create a user name, password and you know, the link it to your bank account and you can just buy stock. That part is relatively easy to do. But the next part is what people stumble because the thing that I think people have problems stock is that, Okay, they know how to do it.

But with Stocked, I buy, right, it's kind of like just throwing darts at the board blind.

So what you end up just randomly picking Netflix hoping it goes up. Right, you have something interested in, you said to us as far as like when looking at stock, it's good to mo like what you're interested in?

Can you just talk about that?

I think the biggest thing for me to help me learn was picking areas of interest because the knowledge sticks.

Right. We all had classes in school.

That we didn't like, Like, we didn't like I didn't like earth science and related like, it didn't stick even though like you know, you passed a class, get a B or whatever, you ain't get in the class, right, but the information didn't stick with me because it wasn't an interesting topic.

And you, yeah, you kind of want to.

Get through it in this forum, right, I want to pick something that I'm interested in because when I read it, I'm going to retain it.

I'm gonna hold on to it, I'm gonna build on top of it.

So you're kind of an architect, right, I say my model for myself every day is that I'm the architect of my legacy, right, and every day I'm putting a brick down from my legacy because you don't get to tell people to say we're not here. So the same thing goes forward every other place of life, where it's like, all right, I'm the architect of my portfolio, I'm the architect of my knowledge base. I'm the architect of whatever is I'm doing. I'm building and it's never going to

So that's like like Warren Buffett like his approaches. He he invests in companies that he understands. Yes, right, So I always tell kids, like once again in the class, like Okay, what do you have on your feet? Everybody that has Nike Adidas, right, So it's like, Okay, you understand the brand because you spend all your money on it, right, So it's not like it's not foreign to you. Like you don't have to be a rocket scientist to figure out, Okay, Kanye just did a deal with a Didas, or Beyonce

In the sense you're you're making the trending, right, So there's a reason why that company went up, whether it be like the iPhone, right, he'll raise Apple sotoc or if Nike's putting on a new product or Dida's put out.

On their product.

We are the trend nakers, you know what I mean. So, like that was one of that's one of the key things we say. So after we tell them, hey, this is what a share is, the next thing is like invest in put money in what you already are invested in.

So if it's Horizon as your phone.

Company, then maybe you should have stock in that, or if it's Sprint or whoever it is, right, invest in yourself.

Yeah, And that's the biggest thing, right, Like we want to understand what we invest in. Like, no one likes an investment where you kind of don't understand what's going on, and it's kind of like gambling. Now it's not an investment. Now you're just gambling. And for all that you can go put their money on black and a see hope for the best. But we look at these companies. It's very key to understand why a company goes up or why a company goes down. The stock market is very

And that goes back to interest, right, it's what equity I need to now.

Read you said that you have to learn how to read and know the interest. Okay, you're interested in one thing, but now how do you actually examine to see if this is actually worth.

Buying or not?

Right?

So you can read, but like what do you read? Like what's good?

How do you know if something is actually worth buying or not? Social equity so.

Social it's kind of a term I coined myself because I always look shopping.

Yeah, that's not sure? Is it something I look at go shopping or just in life? Right?

What kind of car you drive? And what kind of house do you live in? What town do you live in? What do you have in your house? People are very much into the social aspect, right, like social media. You don't even really see the highlights. So it's like ESPN Top ten over again. Right, No one ever sks the grind and the failure and the ups and the downs and the ebbs and the flows. Right, we just see somebody pop up and they have all this stuff. How'd you get it?

Right?

But we don't care what the social equity says. I want that now, But you don't understand what that person went through to get or how they got or they could be lying whatever. It is the ideas that people want to feel accepted. No one ever wants to be the dumbest person in the room. People are okay with being the second dumbest person in the room because they said, well you dumber, so you know what, Okay, with him being dumb. I'm not the numbest person in the room, right,

Should go down or why I think it should go down.

So that's the part that I'm getting at. So what could make it? You know, port range? What can make a stock go up? What can make a stock go down? Other than what's obvious to the naked.

Eye, right, something like that.

No, it's just perception, Like think about the market, right, This all for GAZI Right, So as a CEO will get certain bonuses if a stock has certain peaks, right this Okay, you're the CEO of ABC company and they'll say you listen if you can get the shares up to thirty dollars a share and hold it around this range for four months, we'll give you ten million dollars and then so on and so forth with getting the share price up. But it's all kind of like a figazi, why is it that price?

Why is up? WHI is it down? Right?

Forgets supply and demanding volume. A lot of it's just perception of the market. It's what the market perceives, what big money perceives, what somebody thinks right, we get information. Now, if you own three shares at Apple and you like their third quarter earnings call, he owns one hundred million dollars Apple and he hates it. Who has more effect on how the stock goes? He does because he has more equity in the stock, so he has more say

Right. So all this stuff is perception based.

And that's why the sweat equity of actually reading and engulfing yourself in the subject matter of interest is going to help you understand the company. And if you understand Apple, it's going to be easy to understand Google. It's going to be easier to understand Amazon, It's going to be easier to understand any other kind of tech brand because the model of how they distribute their products, their ideas,

We're good.

So they went to Texas A and M Texas State. I smu every school in Texas around and gave them Facebook, to the point where students at Texas said, Yo, why we have Facebook? And the Texas was forced to do business with Facebook. That happens in business all the time, right, It's something we don't pay attention to. But these triggers and levers that happened. You'll start to notice as you read. And I said, you build the brick, right, you're building. When you get to the second floor, you go, I

A little faster. Right, it's the same thing that we use every day.

I'm going to go backward just a little bit because you said reading and that's important. On the last episode, on episode fourteen, we talked about the importance of reading and a lot of times we get discounted because we're not reading The Catcher and a Rye. Right, what publications should we be reading if we're trying to invest in the South market?

I think the Wall Street Journal is good to read. Barns is a little bit of advanced, but Barons is a good place to start to read. I think Financial

How does China affect this company? How does India affect this company? We don't think like that.

We think, Okay, well you have a Horizon service, so you figure I'm gonna invest my money in Verizon, right, because but Verizon's a global brand. So what's going on in Australia? What's going on here? We look at the country like India. They have a billion people, right, how many people in an India do you think have a cell phone?

I'm gonna say fifty million? Yeah, something small number, ten million, one hundred, like eight million, hundred and nine million people. I have a billion.

So it's an arms race between Walmart and Apple. The boyst country gets to India because they're building the middle class.

Right that The same thing was happening in China.

Imber we spoke up off again about China Moverien and it was like they're trying to build so much infrastructure because they would they almost have two billion people, right, But.

It's a race to the middle class. Right.

And but when you look at the company on a broad scale, and I look at it like a company and I have like Netflix, and I said, okay, do really well.

They have a lot of subcribirds.

We understand how it works, but they haven't really touched Europe or other country.

So there's growth there that we get you interested.

Right, And those are the kind of things when you start to read about companies, you go count interested now now mentioned because I know if they're doing well here, there's an opportunity here, right. All we want in life is options, the same thing everywhere else.

Right. I want the option to go out to eat.

I want to have options, but I want to eat here here here, I want to have that option or I want to option.

What kind of call on jobs I want to out eat? Do I want to bend? Do I want? Right? I want that option. If we work for we work to have options. Right.

So the same thing in the market is that understand these companies now pull levers and the more you understand what you're digesting and investing in, the more options you'll have.

Now, it's a slow reward.

This thing is in a I'm going to put money in on Monday and be rich on Wednesday. This is a character choice when you're talking about starting from scratch, right in terms of a BILLITINGR portfolio. So now you might not see the siege of labor, right. It might go to your kids but right, Or it might be something that is a passion project and you can only fund so much. We'll be realistic, like everybody doesn't have one hundred thousand throwing to the market or a million.

That's gonna lead us into a very interesting yeah.

All right, So yeah, so now you got the you know, the groundwork.

That was a lot we're going Now we're gonna go into the hot topics of the day.

All right.

So now we're going to go into some hot topics because everybody's been talking about the stock market recently for a couple of different companies.

Lifting Google specifically, a couple others.

Pinterest is another one, Pinterest, But everybody's interested in lifting Google. They just well lift ipo and Uber is about the i po. Right, So everybody's been hitting us up, like, can you talk about Lyft? Can you talk about what with OPO? Should we buych you?

You're not so.

First of all, we're not here to give you stock advice. We're just here to give you information. And then from the information you can you know, do whatever you want. Right, So cut all right? The first question is that IPO. Right, A lot of people will hit this term, but they're not. They don't fully even understand what's.

Happening itself, gotcha.

So it's an initial public offering a lot of times we see the evaluation for a company and like, is that how the product they get? The numbers hold evaluation and come from a multiue of things.

The valuation.

You can look at a company and think that the company's worth thirty billion. You can look at a company and thinks the company's worth ten billion.

Right.

Everybody has a different metrics on what they value stuff. And again the evaluation is from without looking inside, right, This is just on the outside of your house, like the appraisal, right, So it's appraising you. So the evaluation could be correct, could not be?

Because I was gonna say, because right now, Uber is possibly they look at a hundred billion.

Somewhere in the realm, they're gonna come up with the high value might be one of the higher ones, right.

Hundred let's say one hundred billion dollar valuation. That's what they're looking at. And they've never made a proper so that's another thing, right lift, it's never made a profit.

So that part of it is like basically, once you go an IPO and you haven't made a profit, that clock starts taking. Now you got to make a really good right, and they'll give you some quarters to kind of get your feet wet and stuff together, right, But eventually, now you're open to investors and public investors and other institutions and hedge funds.

Who all have different motives. You might be a long term investor, he.

Might be a hedge from looking to make a quick buck or making look make a power play, right, and that kind of gets into the market if you awys want to think about it. It's like the ocean, right, you got sharks, and you have fish, and you have whales, and you have eels and you have seals. You have all these different creatures. They all have different purposes, right the octopus, and they all just want to live their life in the ocean.

They want what they want, right.

The eel's not worried about what the shark's doing, and the shark's not worried about what the coyfish is doing.

They're all just.

Living in the same atmosphere. But they have different purposes. And that's a stock market. When you start to get into the exchange and all these different investors, right, that's a deeper dive when you get into this IPO market.

Right, they're offering equity, that's debt. They owes money money.

They use other people's money to take themselves to the next level, the same way as people. We take loans and credit cards to take ourselves to the next level.

Companies to do right, we're all owns.

We're the CEOs or our own companies every day, right, so your balance sheet of what you do on a daily basis, you're the CEO. You are Rashad as a CEO or Rashard co. So decisions you make on a daily basis the same way as CEO made decisions for his company. So you start to look at it like that, it's all kind of connect together. You know, you're like, Okay, I understand why they would do this now because he's moving in the best interest the same way that you would do that, right.

Like so then also all right, but so Snapchat, right, can we talk? They still haven't made a profit, okay, and they say that they might never make a profit, right yep. So okay, So these companies come into the stock market like Uber and Lifting they never made a profit. But from my perspective and the easiest way to explain, people will still give them a benefit of the doubt

So now what it.

Comes down to potential, Right, at some point in time, you get too old to have potential. Right, It's like basketball, It's about life, right, Like if I don't get it right at seventeen years old, it's like, well, you have your whole life ahead of year, and then I don't get it right at twenty four, where you're still young. I don't get it right at twenty six. Hey you kind of on your last legs. I don't get it right a thirty five. I like, fam just didn't figure it out.

That's that's what I say, right, Like you have a dude, don't make it out there at a certain point in time, the potential is going right.

I can't use that as a as an excuse as to why I'm not accomplishing something, And so accept all these things in the stock marketing, all these things in life kind of tying together. So yeah, on potential, I'm going to invest in this company because it can be fruitful if I was investing.

That's what the person's thinking, rather earners. What's up.

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Sponsored by the United States Department of Homeland Security, saying Okay, I get the premise.

I understand the business concept.

I understand how they make money, how they plan to make money, what they're gonna do. First part. Second part is are they gonna execute?

Right?

We understand now, but I believe in the execution. And then if they don't execute, what's my next move? Everybody never, nobody ever plans a fail. Like people always plan for everything to go right. And that's not how life works. Right when I was a kid, Okay, I'm gonna get my degree at twenty two, I'd be married at twenty five, make six figures at twenty six, I'm gonna have a kid at thirty. Like that never happens. But life that punches you in the mouth, and you know, everybody's journey

Tied to that.

And then on top of Nike not having a good year and an affecting foot Locker, Nike said We're now going to directly distribute shoes from Amazon.

So the market said, oh, you guys are definitely in.

Trouble now, right, And now you look at Footblocker and they've kind of built themselves back. And Nike had a better year the two seventies hit and the whole They have a bunch of different shoe lines and clothing lines that hit that did well, and that ecosystem, right, they're doing well affected foot Blocker. So the same I said, It's like an ocean, right, the ecosystem and how we do things affects everybody. It's important to understand Nike because

So would you recommend like specialty? All right, So if I wanted to get started in a stock market, right, should I just focus my own here and say, okay,

I'll kind of have my niche.

Or would you just recommend like broad range learning much about as much things as possible.

Like I said before, I'm a big proponent of read what you're interested in. That's the best way, because you're gonna get excited to read. Like I don't think people get excited to read. Like you're not excited to read certain stuff, Like we don't have to read the Apple contracts when they pops up and it's like.

You don't see what you're saying.

Yes, they're like saying, yo, we're gonna take information, We're gonna stop here, and like okay, whatever, agree, agree, agree, Right.

No one likes to read.

So the biggest thing is is to do the things that you don't like to do it you're not comfortable.

That's when you know you're growing.

Like if I'm doing stuff and I'm not comfortable doing it because I don't have a comfortability, I don't do it all the time.

I need to do it because I'm grown.

I don't need to keep on doing the same things that I'm comfortable with, Right, but the comfortability isn't the interest just from.

The teaching standpoint that comes with endurance.

Like reading, endurance is a thing, right like the first time you read an article, maybe you do it for five minutes, and then that's time, you do it for ten minutes, and then by you.

Know, a month or six months, now you're reading for an hour. Right. You got to build that thing up. You got to train yourself to do it, all.

Right, So now we yeah, we gave you some backgron on it. So now we're going to go into the next level of how you guys can actually get your foot in the game and start to make some money because it's one thing to learn about it, but it's another thing to actually profit from it, all right, gos So, now we gave you some background info on the stock markets, how stocks work. But now you know, it's one thing, as I said before, to provide information, it's another thing

So it depends right, like do you want to do do you bank with Chase and then you can do it through JP Morgan Chase if you wanted to do it, right, do you bank through Bank of America? You do, AMERI Lynch If you bank through as Far you do. So there's platforms there. There's there's scott Trade, there's e Trade, there's t D, there's Robinhood, there's Acorn, there are glutt in your places.

Acorn, because somebody asks about Acorn has a unique platform.

So Acorn is the company if I'm not misinform is a company that I think ash Cusher is a part of where I take the change when you use it and they buy shares with your change, and it's a way to get exposure to the market.

Right.

So like the game that we're playing is all about exposure. You don't know what you don't know? Right, So then reading exposure these sites exposure. Now you're exposed to all these sites we're mentioning, go on there, read their platform, read the offers, read call them. They have customer service people ask questions, say, hey, if I choose you as opposed to them, what benefit do I have. That's the thing.

A lot of time people have the misconception that you have to be wealthy or rich to invest in stock market.

Right, which is it's not true because the end game to the difference on how people think and not everybody looks like this, right, money is temporary and it comes and goes ebbs and flows. Knowledge is what we're mining here, Like we're crafting knowledge, right. I can't take that from you. I can't go in your brain and take the knowledge. What makes the knowledge powerful is that you can build on it or you can share it, and you can

Free.

These things are all quite essential to what it is you're looking for.

Yeah, now I like what you said as far as you can't take the knowledge. Because I had one friend who he he made he made a million dollars let's say roughly like he made a million dollars young, right, then he fell on some hard times and he lost pretty much all of it. And but another one of my friends was talking to him and he was like

Well, what makes them dangerous, right, like in terms of being able to get that back, is that he has knowledge and experience. It's one thing to be a coach and coach a sport, but there's another thing to play and be in that moment because I can now coach from a different angle because I've been in that moment.

He was just super smart and very skills.

He's able to understand that and put teams together that are not juggernauts, but they're team that you don't well can't walk over. It's the same thing, right, like a person that has experience plus the knowledge base is always going to double up faster. So if I lost that million or whatever it is, I can get it back fast. But not only do I have the life experience of what I went through. So I'm gonna just basically skip these hurdles. Right, these mistakes I've made that those are

To like, I'm gonna get smarter, and that's I mean, that's what we do, right. Nobody teaches us like, especially stocks. It's not something that is learned in school. And if your parents have never invested in stocks, like, we have no armor when we go out.

So what happens with most of the time most middle class people and in our community especially is that people are intimidated with things they don't understand, they don't know right, So what ends up happening is that if you just stay away from it and you say it's over my head, I don't want anything to do with it, because, especially when it comes to money, people is not gonna invest in something or that they don't understand.

So this is what the podcast is about to fully equip you.

But before we leave, I wanted to talk about a couple of different ways where people can invest in stock market even if okay, even if you don't want to fully dive in and do the research and it may not be your forte you can still invest in stock market, right, there's other ways to invest.

So there's like mutual funds.

Why would allows you to invest in stock market without actually investing yourself?

Right, it is being done for you.

And a mutual fund is a company like a Franklin, Simpleton or Oppenheim, And what they do is they pull together let's say one hundred and fifty different stocks and one mutual fund, and you pay a fee for that.

But you're paying a fee because they're doing the work for you. Right.

So it's like a four one K, it's a job where nobody really knows the money in a four one K where it's invested, it's invested in stock market, but nobody knows which stock is actually invested in.

Right.

The same thing with a mutual fund kind is like you're investing in a mutual fund, like it could be a tech fund, but that tech funm I have one hundred and fifty different stocks inside of it.

Right.

So the benefit with that is that a it allows you to invest in a low amount. It's like a lot of times, like fifty dollars a month minimum or like a thousand dollars a month longth sum. So you're investing at a pretty low entry point, and you don't have to do the work yourself, like you don't have to research.

You know, it's being done for you.

And another way to invest is an index fund, right, So an indexed fund, you know, attracts an index. So we have like the S and P five hundred or dal Jones and that's pretty much like a microcosm of the stock market. And so instead of you trying to pick stocks yourself, you're just investing in a broader stock market as a whole. And that's another way where it's it's passive, right, because you're not actually doing the work,

I think the idea really is on a daily basis, are you challenging yourself?

Right? Are you? Today?

I go to sleep and then I'll wake up tomorrow and my better version of myself and all I askts of life, right, like forget finance, just aspects of challenging yourself. And when you start to challenge yourself, the reward comes right slowly, but show you. It's like if I want

But in this kind of forum, the ideas that get better every day.

And the great thing about the stock market, and the great thing about all the things you're speaking about, is that it's tangible.

We can feel it, we can read it, we can touch it. Right.

I can go to a Verizon store, I can walk into a Nike store. I can tangim, I can feel it. If I also can put up an article from the Wall Street Journal, or I can donate my money, right, I consider a donation.

Right, So when I say donate money, you have to pay for the wallsh Journal.

But I'm donating to my knowledge, right, I'm donating money to my knowledge fund paid for banterers. I'm donating money to mine, I'm donating time to my knowledge. I'm investing in myself to make myself better because the better I am,

I'm gonna learn.

So the same thing premises holds true for this is any money or time you're donating to investing yourself. So these platforms also cost money. Let's not forget that this stuff isn't free. It's not free to be knowledgeable, and it's not free to just become an expert in something. It takes sweat, equity and time, right, years, months, days, whatever you want to do, and it takes a financial investment. And I'm gonna waste twenty bucks thirty bucks on stuff

Justally quickly.

The knowledge on the podcast too, which is free.

I just want to touch because like you said, like not having the armor is one thing, and investing yourself as far as literature and reading.

Like in two thousand and seven, Rashad.

And a good friend about his Jama and my brother Gred we started a company called Money Through invest In and so you know, we were.

Into business, right. We didn't have no tools. We were just trying to learn on our own. And I subscribed to all these magazines.

I read BusinessWeek and I got this great article and it was like, you know, things you should look into, So like that was the first thing I did to.

Look at it. It's like, what are my interests? Right?

So I saw Apple and this is prior to the iPhone that hadn't come out yet. And I saw this company called Badu, which was like the Chinese version of Google.

I'm like, all right, Google's been China this this is gonna be next, and then that's on China Mobile. I'm not great, I'm gonna invest in these all right, boom. So I did it. I was like, the iPhone is going.

To be huge prior to it being released, and it was great the first six months, and then two thousand and eight market crash and I got scared and I took all money out, but.

I still watched.

I'll still watch it for the sideline and I saw like companies go up sevenfold and I'm like, oh my gosh.

And then they did something call to split. You want to play what the split is? Well, so stock split? Could they either they can do a reverse stock split or they can stock split.

Right, So if you have one share unless say the shares one hundred dollars and the companies say we're doing a four to one stock split, now you have four shares at twenty five dollars, right, and the reverse dosplat is like, we're going to make those four shares one hundred dollars, right, So you have four twenty five dollars shares. Now you have one share of one hundred dollars. Companies

My graduates from my school being force back drop bag drop, my drop back drop drop.

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