#62 - 5 Misconception For Beginner Investors

<p>[podcast_subscribe id="111"]</p> <p><strong>Misconception 1:</strong></p> <p>Lower priced stocks go up faster than higher-priced stocks (penny stock vs. Amazon/BRK.A/MRF)</p> <p>Stock trading for $3 can double to $6 faster than a stock trading at $1000 to $2000.</p> <p><strong>Example:</strong></p> <p>Ford</p> <p>Oct 2016: $11.74</p> <p>Sept 2021: $12.89</p> <p>BRK.A</p> <p>Oct 2016: $215k</p> <p>Sept 2021: $424k</p> <p><strong>Misconception 2:</strong></p> <p>Stock Splits means the stock will go up because the price per share is now lower.</p> <ul> <li>You don’t get free shares for stock splits. So quantity increases, but the price also goes down.</li> </ul> <p><strong>Misconception 3:</strong></p> <p>IPOs always go up.</p> <p><strong>Misconception &nbsp;4:</strong></p> <p>Looking at the stock price and not the market cap.</p> <p>TCS price is Rs. 3800, but the market cap is 14 Lacs Crore</p> <p>MRF price is Rs. 82,000, but the market &nbsp;cap is 35,000 Crore</p> <p>MRF is not bigger than TCS.</p> <p><strong>Misconception 5:</strong></p> <p>Mutual Funds and Individual stocks are different asset classes.</p> <p><strong>Bonus:</strong></p> <p>Stock is expensive because the share price is high. Jaguar Health at $1.16 is more expensive than Shopify at $1500 because we have to look at the underlying fundamentals of the business and not just the stock price.</p> <p><strong>Useful links:</strong></p> <p>All Streaming Platforms for Cold Brew Money Podcast: <a href="https://coldbrew.money/links/"><u>https://coldbrew.money/links/</u></a></p> <p>Cold Brew Money Newsletter: <a href="https://coldbrew.money/newsletter/"><u>https://coldbrew.money/newsletter/</u></a></p> <p>About Cold Brew Money: <a href="https://coldbrew.money/about/"><u>https://coldbrew.money/about/</u></a></p> <p>All Cold Brew Money Episodes: <a href="https://coldbrew.money/episodes/"><u>https://coldbrew.money/episodes/</u></a></p> <p>Cold Brew Money Tools: <a href="https://coldbrew.money/tools/"><u>https://coldbrew.money/tools/</u></a></p> <p>Cold Brew