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Stock Investing For Dummies 4th Edition Pdf – William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour | Big Think

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Stock Investing For Dummies 4th Edition Pdf – Whats The Best?

Everything You Need to Know About Finance and Investing in Under an Hour
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Bill Ackman is one of the top investors in the world, and he’s said that he’s aiming to have “one of the greatest investment track records of all time.” As the CEO of Pershing Square Capital Management, the hedge fund he founded, he oversees $19 billion in assets.

But before he became one of the elite, he learned the basics of investing in his early 20s.

This Big Think video is aimed at young professionals just starting out, as well as those who are more experienced but lack a financial background.

Ackman takes viewers through the founding of a lemonade stand to teach the basics, explaining how investors pay for equity, a word interchangeable with “stock.” In the example, the owner starts with $750, with $250 of that coming from a loan.
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WILLIAM ACKMAN:

William Ackman is founder and CEO of Pershing Square Capital Management. Formed in 2003, the hedge-fund has acquired significant shares in companies such as JC Penney, General Growth Properties, Fortune Bands and Kraft Foods. Ackman advocates strategies of “activist investing,” the practice of using stock shares in publicly-traded companies to influence management practices in a way that benefits shareholder interests.
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TRANSCRIPT:

Hi, I’m Bill Ackman. I’m the CEO of Pershing Square Capital Management and I’m here today to talk to you about everything you need to know about finance and investing and I’m going to get it done in an hour and you’ll be ready to go.

How to Start and Grow a Business

So let’s begin. We’re going to go into business together. We’re going to start a company and we’re going to start a lemonade stand and now I don’t have any money today, so I’m going to have to raise money from investors to launch the business. So how am I going to do that? Well I’m going to form a corporation. That is a little filing that you make with the State and you come up with a name for a business. We’ll call it Bill’s Lemonade Stand and we’re going to raise money from outside investors. We need a little money to get started, so we’re going to start our business with 1,000 shares of stock. We just made up that number and we’re going to sell 500 shares more for a $1 each to an investor. The investor is going to put up $500. We’re going to put up the name and the idea. We’re going to have 1,000 shares. He is going to have 500 shares. He is going to own a third of the business for his $500.

So what is our business worth at the start? Well it’s worth $1,500. We have $500 in the bank plus $1,000 because I came up with the idea for the company. Now I’m going to need a little more than $500, so what am I going to do? I’m going to borrow some money. I’m going to borrow from a friend and he’s going to lend me $250 and we’re going to pay him 10% interest a year for that loan.

Now why do we borrow money instead of just selling more stock? Well by borrowing money we keep more of the stock for ourselves, so if the business is successful we’re going to end up with a bigger percentage of the profits.

So now we’re going to take a look at what the business looks like on a piece of paper. We’re going to look at something called a balance sheet and a balance sheet tells you where the company stands, what your assets are, what your liabilities are and what your net worth or shareholder equity is. If you take your assets, in this case we’ve raised $500. We also have what is called goodwill because we’ve said the business—in exchange for the $500 the person who put up the money only got a third of the business. The other two-thirds is owned by us for starting the company. That is $1,000 of goodwill for the business. We borrowed $250. We’re going to owe $250. That is a liability. So we have $500 in cash from selling stock, $250 from raising debt and we owe a $250 loan and we have a corporation that has, and you’ll see on the chart, shareholders’ equity of $1,500, so that’s our starting point.

Now let’s keep moving. What do we need to do to start our company? We need a lemonade stand. That’s going to cost us about $300. That is called a fixed asset. Unlike lemon or sugar or water this is something like a building that you buy and you build it. It wears out over time, but it’s a fixed asset. And then you need some inventory. What do you need to make lemonade? You need sugar. You need water. You need lemons…

Read the full transcript at https://bigthink.com/videos/learn-to-invest-and-start-a-business-in-under-an-hour

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46 Comments

  1. Big Think
    July 28, 2021 at 6:09 pm

    Want to get Smarter, Faster™?

    Subscribe for DAILY videos: https://bigth.ink/SmarterFaster

  2. Money Mark
    July 28, 2021 at 6:09 pm

    BILLY IS TEACHING!!?!? Well let me get MY B.A. from B A so I can make A $B!

  3. Sawyer sawyermrtns
    July 28, 2021 at 6:09 pm

    many see forex say a get rich scheme but forex is not like that, it's a gradual process with the right tools and application you can make a living from forex trading….

  4. Zlatomir Todorov
    July 28, 2021 at 6:09 pm

    Aaaaaaand you short the lemonade stand.

  5. Derick Holcomb
    July 28, 2021 at 6:09 pm

    Y’all still waiting for a squeeze ? I have a few shares left after a decent gain. It might be diluted in May.. be smart boyz

  6. Anthony Farandatos
    July 28, 2021 at 6:09 pm

    Thank you so much for everything! What an inspiration you are I first played the stock market at 16, sold some shares at a profit but got back into stocks thanks to my younger brother at 22, and now at 23 I’m doing all the research on different companies I can to hopefully become a billionaire in my lifetime! I also totally agree when he said, if you have no debt, that’s the best time to put some cash up for risk to make money with your money you already have! I tell people all the time, money in the wallet is like seeds and if you plant them right they can turn into massive trees! If you bought 100$ of Pepsi shares at its low on Oct 1 1974, you would have over 3 Million bucks today!

  7. Ldeqwaa Ling
    July 28, 2021 at 6:09 pm

    Love this

  8. R P
    July 28, 2021 at 6:09 pm

    can someone please explain why at 8:13 capex in yr 5 in 900?

  9. Shawn Michael Scott
    July 28, 2021 at 6:09 pm

    and also, fuck herbalife

  10. anonymous code 16
    July 28, 2021 at 6:09 pm

    Finally I'm investing in coco cola 😁😁

  11. Josh Knoxville
    July 28, 2021 at 6:09 pm

    Before u invest, have 6 months spare money in the bank in the event that you lose your job, ROFL. Rich people… I guess I will try my hand at buying and selling cars before I try to "invest"

  12. FATkidCANToLLie
    July 28, 2021 at 6:09 pm

    $SRNE to the moooon

  13. keoaries
    July 28, 2021 at 6:09 pm

    I like how the employees didn't get a raise.

  14. Todd Ferguson
    July 28, 2021 at 6:09 pm

    I'll save you 45 minutes. Invest when you are young if you come from a privileged family. Otherwise good luck paying off that student debt

  15. Avinab Mukhia
    July 28, 2021 at 6:09 pm

    Not affected by extrinsic factors…Ronaldo moves away coke bottles..Coca-Cola loses 4 billion dollars…yeah

  16. daytonpyro
    July 28, 2021 at 6:09 pm

    you need ice too. WTF…

  17. Victor Rice
    July 28, 2021 at 6:09 pm

    great video thanks

  18. recallfun11
    July 28, 2021 at 6:09 pm

    At 7:06 the revenue generated is $850 in year 1… Buy cups sold are 800 at $1 per cup… Can anyone please explain how did the revenue is $850 but not $800 (800 * 1 = 800)… Thanks

  19. sam potter
    July 28, 2021 at 6:09 pm

    these sound effects are just ridiculous

  20. nothing
    July 28, 2021 at 6:09 pm

    very helpful explanations I will give it a like, you are probably happy to hear this right?

  21. Tiago Neto
    July 28, 2021 at 6:09 pm

    This video is gold… literally

  22. Edward Marshall
    July 28, 2021 at 6:09 pm

    I'm gonna go on cbc and spell doom and gloom for all lemonade stands and whne people lose interest in these lemonade stands I will buy up their shares.

  23. CHRYSTOPHER C. DIZON
    July 28, 2021 at 6:09 pm

    YOU THINK IM A FUCKING 9 YR OLD TRANSFER OF WEALTH BTCXID NFT:bc1qx9t2l3pyny2spqpqlye8svce70nppwtaxwdrp41KFHE7w8BhaENAswwryaoccDb6qcT6DbYY

  24. Z
    July 28, 2021 at 6:09 pm

    Valeant Pharmaceuticals International Inc. is everything you need to know about Bill Ackman's grasp of finance and investing.

  25. Erik Hensley
    July 28, 2021 at 6:09 pm

    Thanks for taking valuable time out of your schedule to help people invest. The least I can do is make positive comment as a thanks.

    If you want the world to improve go against the grain and ask questions. Activist investing in the spot light is not easy.

  26. Krye Baybee
    July 28, 2021 at 6:09 pm

    6:43
    Wow. That 5y looks great. Sounds like you can IPO an ice machine vendor via SPAC merger and increase market cap by infinity. All your shareholders will like the stock.

  27. Clement GAVI
    July 28, 2021 at 6:09 pm

    I strongly believe it is impossible to explain EVERYTHING someone need to know about finance and investing in under an hour. The balance sheet shown with Assets, Liabilities, etc is a construction. It is made of the basic bookkeeping operations recorded. And you can only really understand a balance sheet when you are able to image how the figures of assets or liabilities and so on have come to be.

    It is absolutely impossible to get EVERYTHING you need to know about finance and investing in under an hour.

  28. Frostpst
    July 28, 2021 at 6:09 pm

    Thank you

  29. B Gilgil
    July 28, 2021 at 6:09 pm

    0:12 Bill Ackman

    0:23 Lemonade Stand Example

    Starting A Business (1:03)

    1:17 Form A Corporation

    • 1,000 shares of stock, Investor invests for 500 shares

    2:18 The Balance Sheet

    Assets = Liabilities + Stockholders Equity

    3:08 Fixed Assets and Inventory

    4:19 The Income Statement 4:38

    5:49 Growing The Business

    8:05 The Statement of Cash Flows (SOCF)

    9:05 Evalutating Value

    10:26 Equity Investor took more risk, e.g. Equity Investor made more returns on investment

    11:08 Debt and Equity 11:58

    13:06 Assessing Risk

    13:40 Government Bonds (Low Risk investment)

    14:53 Profiting As An Entrepreneur

    17:34, 17:50 Valuation: Determining A Company’s Worth

    19:33 Selling Shares, Board Of Directors

    20:36 Benefit of IPO

    21:03

    21:39 Investing

    22:59 Interest Returns

    24:00 The Importance of Not Losing Investment Money (Avoid Losses)

    24:53 Keys To Successful Investing

    – Don’t Invest In Startups

    + Invest In Public Companies

    + Invest In businesses you understand how they make money

    + Invest at a reasonable price

    + Invest In a company that you can own forever

    27:26 A business you can own forever

    Coca Cola, McDonalds

    28:58

    • A product people need

    • Unique

    • Brand Loyalty

    29:48

    30:23 High barriers to entry

    31:57 Low Reinvestment Cost

    Controlled Company

    33:26 Investing

    34:41 The Psychology of Investing

    35:45

    1. Be Financially Secure

    2. Don’t get spooked by short term fluctuation

    3. Do your own work

    4. Invest at a reasonable price

    36:38

    • Mutual Fund

    38:05

    • A Good Money Manager Can Explain What/Why They Invest In

    + Good Reputation

    + Value Approach

    + 5 Year Track Record

    + Consistent Approach

    • Hedge Fund

    40:25 Recapping

    41:20 This is just an Introduction

    42:27 Invest In Your Future

  30. Bill Cronin
    July 28, 2021 at 6:09 pm

    7:34 Where does the money come from to purchase the additional stands and inventory? He has a loss after year 1. He’d have to take out an additional loan to cover these costs which isn’t show in the interest statement projection.

  31. dpactootle
    July 28, 2021 at 6:09 pm

    So, he lied about the 1 hour thing (everything you need…)

  32. dpactootle
    July 28, 2021 at 6:09 pm

    Do not invest in KO guys, it is just an example

  33. Jasper Jones
    July 28, 2021 at 6:09 pm

    Wanna be a POS that is already rich and lays people off just to get your useless numbers up? Be like this miser garbage.

  34. unba nnble
    July 28, 2021 at 6:09 pm

    watching this is so interesting. he throws a lot of good theory in this disguised as something simple, i thought itd be wishy washy but for people new to finance its worth a watch

  35. JoeDoesTech
    July 28, 2021 at 6:09 pm

    Such a great introduction, thankyou! Don't think I will wait till I have paid off my student loans completely to get started or I will have lost like 10-20years out of the roadmap for your 10k 😀

  36. tz1 ark
    July 28, 2021 at 6:09 pm

    The superb helium beverly gather because maraca ignificantly reach but a nervous japanese. large, elastic whip

  37. Alex Kashie
    July 28, 2021 at 6:09 pm

    This man is a genius… We blessed to have him around, thanks a lot Mr Ackman.

  38. Roberto Canales
    July 28, 2021 at 6:09 pm

    Excellent, thanks! 😑👌🏼

  39. Umut Şenol
    July 28, 2021 at 6:09 pm

    14:58

  40. Umut Şenol
    July 28, 2021 at 6:09 pm

    Excellent video !

  41. Gabriel Son
    July 28, 2021 at 6:09 pm

    My dad is making me watch this

  42. The Lazy Gamer
    July 28, 2021 at 6:09 pm

    saw this years ago and nice to revisit this lecture. wish big think did more of it nowdays? wonder if there is a playlist or collection of the lecture series. i've a few others in various topics. loved one by steven pinker and tamar gendler. please keep this series alive :'( love the format! it is so accessible and digestable!

  43. Antone Penn
    July 28, 2021 at 6:09 pm

    Yes, yes starting early is ideal, but starting today is better then starting tomorrow.

  44. William John
    July 28, 2021 at 6:09 pm

    Investing in crypto now is very cool especially with the current rise in the market now

  45. D' Amazing Facts
    July 28, 2021 at 6:09 pm

    Well, I think it's time to start a lemonade stand. haha

  46. Michelle Lillian
    July 28, 2021 at 6:09 pm

    Mrs Rose Robert and her method works like magic I keep earning single week with new strategy