Investing Basics Stocks – Categories, Capital Structure and Theory Behind Outperformance

This is a continuation of the last post discussing basic financial principles as it applies to individual stocks. Read Part 1 first if you haven’t already There are many ways to describe a stock/business, but the 3 major categories are: the market cap size, the sector and geographic location. Market Capitalization Market cap size refers to the overall quoted value of the stock. Market Cap = the stock’s trading price X the total number of outstanding shares of the company.

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