Stock Market Terminology every Investor MUST KNOW!

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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re doing part 5 of the very popular series stock market terminology that every investor needs to know so that’s basically self-explanatory let’s get right into this guy’s number one term today we are going over is ceo what is a ceo whenever you

Invest in a public company you will hear a lot about the ceo said this or said that what is the ceo stands for chief executive officer in the ceo is the main person in charge of the entire company’s strategy where they’re going against competitors how they’re going to market their products this and that they are the head and they only deal with the most important

Important issues so they’re also they’re also a bit of a figurehead of that company because of the ceo the generally the most important person in that company does it because of the top decision maker but because they’re the ones that is actually known by the public the ceo is probably sometimes the only person known in most companies in the public so people

Probably have no clue who any other employee at apple ever was but everybody knows steve jobs berkshire hathaway no one has any clue who or the other work there’s a berkshire hathaway but everybody knows warren buffett microsoft do we know any other workers at microsoft no but we know bill gates so they’re the figurehead of the company and they are the end-all

Be-all as far as decision-making process goes with that company they only deal with the biggest the biggest problems or the biggest projects those kinds of things let’s go on to the next term we have ceo and founder so what’s that mean ceo and founder you’ll hear that a lot what a ceo and founder is that means that the current chief chief executive officer so

They’re the one in charge of everything but they also founded the company which is important if you’re one of those people like me that likes to sometimes invest in companies that are still run even when they’re public they’re still run by the person that started them in their parents garage or in their office or in their basement or wherever they start their

Company from that’s something i value as an investor i love it to see founders actually running the companies even when they’re public and they’re huge at some point because i feel like no one will care about that company as much as a founder does no one so ceo and founder that’s the current chief executive officer and they’re the ones that actually started the

Company from the ground up next term up we have cfo a cfo e stands for chief financial officer the chief financial officer much like the ceo they only deal with the biggest problems they only deal with the biggest issues but the chief financial officer is just really in charge of the financial part of the business you know trying to run numbers and see okay can

We meet this margin if we do this okay if we spend as much money to acquire this company you know how is it going to look you know can we can we meet those numbers what are the numbers we should set for the next quarter the next year and there the head of that department so they’re they’re in charge of it they’re the ones that sign off on the very end – okay we’re

Going to release these numbers we think we’re going to do a billion dollars in revenue next year we think we’re going to do sixty cents of eps all this the cfo is the end-all be-all when it comes to financial things they’re the ones that sign off on it all everything has to go through them if it’s something that’s big and it’s going out to the public or investors

And whatnot board of directors a board of directors is usually about seven or eight individuals and what they are in charge of first off they have to get voted into that spot by the shareholder so shareholders of the company have to vote them to even be on the board of directors and what their role is they’re the ones that actually choose who the executives are

The ones that actually choose who’s the ceo they’re the ones that choose who’s the cfo the ceo oh they’re also the ones that choose how much those individuals get paid they may decide executive compensation they also decide things like if there’s going to be a share repurchase or our dividend or things like that so they’re that they they almost like i would say

Informally run the company they really do they almost informally run the company because they’re controlling all those kinds of things but they are not controlling things like strategy of the company they’re not deciding the board of directors at apple they’re not the ones that are deciding hey we’re going to come out with a three inch iphone next year and a seven

Inch iphone a five inch iphone no they’re not the ones that do strategy stuff like that or hey we’re going to run this commercial that commercial no no like i said they are just deciding who’s the people that are going to be making those decisions and how much do they get paid and do they do a share repurchase or dividends things like that that is what a board of

Directors is share buyback you’re going to hear this a lot companies do share buybacks all the time it’s become commonplace in the stock market for companies to do share buybacks what is a share buyback a share buyback is essentially when a company decides to purchase its own shares on the open market meaning and why would a company even do this so it means say

Say a company currently has two shares outstanding they have only two shares and that’s unrealistic companies and hundreds of millions of shares outstanding if not billions but let’s say they just have to to keep it simple and currently they’re making $2 in profit that means if you divide two by two that means i’m earning $1 per share outstanding currently if they

Go ahead and buyback one of those shares and now they only have one share left but they’re still running $2 now they’re earning $2 per share which now then brings down the p/e ratio which then makes it even more attractive investment at that point so companies will buy back shares to bring down that share cap so it can make the profits look even bigger even if the

Profits stay the same those less shares to count it against which brings a p down so maybe more people will invest in it at that point that’s what the thinking is behind a share buyback next up we have a authorized amount so authorized amount in regards to a sure buyback what does that mean authorized amount that is a maximum amount of money that company can spend

On a share buyback every share buyback announced they have a maximum amount might be a hundred million or a billion or ten million or whatever it’s whatever amount the board of directors decides to be the amount that’s maximum amount they can spend the company can spend on buying back shares there’s always a limit and they cannot go over that limit once they reached

It that’s it the share buyback ends and then the board of directors if they want to do another buyback they have to approve it and then put it out there to the public and say hey we we approved another share buyback at one hundred million dollars or whatever so you cannot go over that amount and dividend what is it dividend a dividend is money that is being paid

Out to the shareholders now most companies pay quarterly dividends and when i say most companies i mean big corporations huge ones ones that have you know hundreds of millions of dollars market cap if not tens of billions or something like that so in they pay out a dividend they can announce and they paid out every quarter so four times a year they say okay we’re

Going to pay a quarter per share and dividends and that money goes directly to you as shareholders and that money comes directly out of the cash balance that company has unless they issue debt to pay that dividend which some companies do nowadays they’ll issue debt then they’ll just pay the dividend out of the debt but that’s kind of going more into depth on these

Things i don’t want to get you too confused dividend at the end of the day it’s money that’s paid to you as a shareholders in most companies like i said they pay them quarterly so four times a year some pay him twice a year so every six months in some pay only once a year some companies pay no dividends at all a lot of companies i invest in they pay no dividends

At all so it just depends on what the board of directors wants to do next up we have payable date payable date is in regards to a dividend so a payable date is the actual date that the company will funnel that money to you into your account that’s the money that’s the day they actually pay that dividend out and say okay here’s a quarter per share for you know your

Dividends so if you have a hundred shares and you get paid a quarter per for dividend you get $25 in your account or whatever that’s the date they actually pay it out next up we have record date this is also in regards to dividend a record date is the date you have to own the shares by to collect that dividend so there’s a certain day always that you have to own

Those shares by to even receive that dividend if you have owned the shares before that date the record date then you will then receive however many dividends you have based upon however many shares you own at that time last term up to day is stock split a stock split is when a company wants their shares to not be as high-value generally and there’s also a reverse