4. What is a Share

Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:

In lesson four, we learned that a share of a business is one unit of the overall business. For example, if an ice cream stand business was worth $100,000 dollars and the owner divided the company into 10,000 shares, each share would be worth $10. In this scenario, the 10,000 shares that the company would be divided into would be called the shares outstanding.

Just like a business, that becomes more or less valuable, 1 share of a business will do the same. Although we have only learned basic valuation techniques during the three previous lessons, we know that the earnings per share (EPS) -or just earnings- is one of the most important term to understand. The earnings per share (EPS) essentially tells us the profit that 1 share has made in a 1 year period.

Also, we learned that the book value (or equity per share) is a very important term because it provides the value of 1 share if the business stopped operations. A comparison of the book value and trading price (or market price) determines our margin of safety on each investment

During the video, we learned that it is important to look at 1 share as if it were a mini-business, because itís easy to proportionally look at the value of the entire business that way. We also learned that owning 1 share is no different than owning the entire business.

[wolfgangalpha]

YouTube University. I can’t thank you more for your time and the knowledge you impart in these courses. I feel blessed and privileged. Thanks, Mr. Pysh.

[iane.millais]

Mr. Pysh You are not only a talented and skilful teacher, you also give the information in a coaching and motivational attitude and voice. This really is one of the best sites for learning value investing. I say this having read both Ben Graham and Warren Buffet. I learned more from you in an hour than I did reading the masters' books. Congratulations! I am a fan.

[jentymichael]

I'm watching this videos for a while. Now started to note down the points on a note book. It so much worth. Thank you Preston Pysh.

[Grandoasis]

I've learned more from this video than I learned in my entire time studying accounting & Finance . You really know how to break things down to a point where even a dummy can grasp it .

[josephanglim]

I have been watching one of these every night before bed and am only on this video and have learned so much! I spent nearly an hour scanning through your site and haven’t been able to find one request for money. I would have donated if I saw something that allowed me to! Honestly, you are one of the best resources I’ve seen in over ten years of surfing the web. I can’t wait to finish your courses! THANK YOU!!!!

[AndreiBazanov]

Just wanted to say thanks guys. I am not commenting on each video, but I am watching them all and loving it. Thanks for free resources.

[topten-s]

you are one of the best teacher - simply because all your concepts are very clear and you know how to convey them. love your content.
thank you for sharing knowledge

[yaellachman]

This is the clearest, most easy to understand explanation of any of these concepts! I have scoured YouTube and google and this is the BEST I have come across!! Thank you so much!

[maxfaal]

I don t know how to appreciate you. I read the Intelligent investor twice then I found you here and now the puzzle in my mind is becoming meaningful! your descriptions organize my studies and resolve all my question. thank you so so so much.

[ashishpatel]

I am a student and just entered the market and at the end of this video I realized that I'm buying on emotion.... And even though market price doesn't go down my profit percentage will be about the same of a savings account... Will look for low p/e stocks for long term... Your videos are very clear and effective for beginners... Thnx man

[JCo]

Preston!! I am learning so much I am so grateful for this series. Thank you from the bottom of my heart for demystifying all of the fear related to investing and finance. God bless!

[anirban]

WOW! It has been 10 years since I came across the term EPS and P/E ratio. And ever since has been confused over it. And now after 10 years of confusion these 18 minutes have made me understand what they really mean.

Thank a ton.

[davidflores]

This video has taught me a lot about shares. I thank you Mr. Pysh for posting this for people like me. I took notes throughout your videos so I can look over them. THANKS

[nathantaylor]

Been going through your course in 2019, thank you for taking the time to put this course together, appreciate it and your teaching style, alot of helpful information.

[MathHatersAnonymous]

I really love the way that you simplify every single term and making great examples! I never understood economy this easily... SUBSCRIBED!!!

[goodolarchie]

Preston - I'm also a teacher, and just wanted to say you're a great teacher. Very clear and well organized for visual and aural learners.

[angrychef]

Just discovered the video series. Thank you for breaking down the concepts into clear and simple terminology. I appreciate and admire the work you do. Kudos!

[nsibambitopi]

Cant believe i have wasted years watching stuff that doesnt make sense. This guy is sent from subscriber

[AakashSawant]

I highly appreciate the efforts that you have taken to make a such a valuable videos....thanks...a lot...

[anviyaan]

No words left to praise you Mr. Preston .... you are way too amazing. I wish i found these videos an year back that would made me stop trading on assumptions and emotions.