Ep 10: How to Read a Stock Quote

Jess: One more time.

Jessie: Cut.

Jess: From the top.

Jessie: Greetings, Money Coven.

Jess: You are listening to the Market MakeHer podcast, the self-directed investor education podcast, breaking down complex stock market topics from her perspective.

Jessie: We're your hosts.

Jess: I'm Jess Inskipp, the resident finance expert.

Jessie: Been in the industry for about 15 years now, so I know some things.

Jess: And I'm Jessie DeNuy, your guide on this financial empowerment journey, asking all the things you were thinking so you don't have to.

Jessie: But always feel free to submit your questions to us, because we will answer them.

Jess: Yes, please.

Jessie: And today, we are going to walk you through reading a stock quote.

Jess: There are so many data points that are displayed when you pull up a stock, and we've decided to explain them.

Jessie: But be prepared to go down the rabbit hole to stock Wonderland with us once more.

Jess: Yes, we love Wonderland, as long as we steer clear of Jargon Land, which we always do.

Jessie: And we still need to talk about stock analysis on this journey.

Jess: But first, we need to know a few more foundational things.

Jessie: So let's get into it.

Jess: Oh, and we will also be sharing our screen again today as we go through these stock quotes that we can find in different places.

Jessie: So watch on YouTube.

Jess: Let's start with just pulling up a stock quote with something we're all familiar with, Google, and then go through the data points.

Jessie: We're preparing you for stock analysis.

Jess: A couple episodes ago, we talked to you about having an investment thesis and how to find ideas.

Jessie: When you find your idea, you're going to get a stock or an ETF or a mutual fund.

Jess: And today, we're going to focus on stocks.

Jessie: Once you find that stock, then you need to validate that investment thesis and understand if it is a good investment that fits into your personal overall investment thesis.

Jess: But before we do that, there's all of this information that just shows when you pull up a stock.

Jessie: And there's a reason for that information.

Jess: So we want to show you what that is.

Jessie: The next episode, we're actually going to talk about utilizing that information for analysis.

Jess: So today's totally about understanding.

Jessie: We showed you stock screeners and how you can use them to investigate ideas.

Jess: And after you have written a thesis, we talked about how to pick a stock brokerage firm.

Jessie: So hopefully, you've done that by now.

Jess: And now, we're actually getting into looking at stock quotes and seeing what to look at to know what you might want to pick or buy.

Jessie: We're going to do Microsoft today, because everyone is talking about ChatGPT.

Jess: ChatGPT is owned by OpenAI.

Jessie: Microsoft owns OpenAI.

Jess: So why not use Microsoft? And we personally like to use ChatGPT.

Jessie: So I'd love to see what's going on with Microsoft.

Jess: The first thing you're going to see is the last trade when you see a quote.

Jessie: So just like on that first episode when we say, OK, what's the market doing? And they'll give you the Dow and the S&P 500.

Jess: They'll give you a price point.

Jessie: And then it's down by how much? Same thing.

Jess: So right now, you'll see Microsoft is $343.77.

Jessie: Right now, the market is closed.

Jess: So that's the last trade as of 4 PM Eastern time on Friday, July 21.

Jessie: Today, it was down $3.10.

Jess: That is the change from Thursday's close, so the previous day.

Jessie: So what has it done in a day? And then the percentage change of that $3.10.

Jess: So it's down $3.10 from yesterday.

Jessie: That represents a 0.9% change down from the previous day.

Jess: You get a lot of data points.

Jessie: So let's start with the one day because that's what people will show you by default.

Jess: I've heard this narrative that, oh, brokerage firms are going to show you the one day just to scare you because it's all volatile.

Jessie: No, it's heavily regulated.

Jess: As a broker or dealer, you have to be very careful with the information that you put in front of the clients that are consuming that information.

Jessie: And it cannot be construed as swaying you in one direction or the other.

Jess: So they give you a default of a day for that reason and all of these data points.

Jessie: You have to have all the information so you can make a decision.

Jess: OK, good.

Jessie: Yeah.

Jess: So let's look down here.

Jessie: Microsoft today opened at $349.15, got as high as $350.30, as low as $339.83.

Jess: That's all that means.

Jessie: It's like, this is what it did today.

Jess: Oh, wow.

Jessie: It fluctuated like $10, right? It does that.

Jess: It trades so much.

Jessie: This one doesn't have volume.

Jess: Market cap, we talked about that.

Jessie: This guy's $2.56 trillion mega cap.

Jess: Dividend yields, that is how much you can expect to receive on an annual basis of income.

Jessie: And then the other information you have is just the 52-week high and low.

Jess: So how low has it been for a year? Within the past 52 weeks.

Jessie: And what's the highest it's been? Wow, this one's really fluctuated a lot in the last 52 weeks.

Jess: Because of AI.

Jessie: Yeah.

Jess: All right, so let's talk about quotes and information that you'll see on Fidelity.

Jessie: Let's switch over to Fidelity.

Jess: OK.

Jessie: So same stuff.

Jess: This is the last price, same information.

Jessie: This looks a little bit more intimidating, but I do like that they're giving us more.

Jess: We just need to know how to read it.

Jessie: That's right.

Jess: So now we're going to a regulated brokerage firm, and they're required to give you all of the information so you can make good decisions.

Jessie: But then that's where it can be intimidating, right? Yes.

Jess: Is that the same chart kind of like we saw on Google below that? It is, but you'll notice a little more information.

Jessie: This is called a detailed quote, which means like you're buying a car, here's the prices for it all together, how many cars are in existence.

Jess: Now in the detailed quote is a little more information, and this is where it varies based on your brokerage firm.

Jessie: So you still have that previous close, open, high, low, PE ratios.

Jess: But Fidelity, they do an equity summary score.

Jessie: So this is the way that they do an analyst opinion, is they actually put them all together.

Jess: All of the analysts? That they track.

Jessie: There are lots.

Jess: So the analysts that they have.

Jessie: What else is on here that we might want to know? So there's just news, what the company does, if they have earnings, when that date is, the dividend.

Jess: This is just the summary.

Jessie: Now we can really go down the rabbit hole.

Jess: This is where it really gets into the difference of how your brokerage firms display information.

Jessie: Brokerage firms make money off of you by holding money with them, and by you placing trades.

Jess: They're constantly competing for your business.

Jessie: And the way that they compete is through the stuff they offer.

Jess: The ESG score, so if they're a leader overall, and where they are in comparison to their industry.

Jessie: You're constantly comparing the stock to the industry and the overall market.

Jess: If you look at analyst reports, you'll see varying opinions.

Jessie: And that's because they have varying methodology.

Jess: That's why Fidelity realized that, and they have this equity summary score, is they're like, this is all varying, so let's make a score based on accuracy.

Jessie: Let's look at Merrill.

Jess: So I'm pulling up Microsoft.

Jessie: This is the same information.

Jess: See how it's all literally the same? You type in the ticker symbol for Microsoft, and all the typical information comes up that you always kind of see.

Jessie: Yes.

Jess: The same people who made Ideal Builder made Stock Story.

Jessie: Are these tools available to anyone who has a Merrill brokerage account? Yeah, you just have to have an account.

Jess: There's no minimum asset requirement.

Jessie: It has the same underlying data, it's just now in a completely different format.

Jess: And it's called Stock Story because it's in chapter format, but it asks the questions that you should be asking, and then gives you the answers.

Jessie: Interesting, okay.

Jess: So who is Microsoft? So now you'll learn.

Jessie: But now you notice it's the same information, right? Like there's details about what they do, their platform, and...

Jess: It's presented a little differently.

Jessie: Same information here, the last price, the market cap.

Jess: So it's good to know these terms because you'll see them across all the platforms, whichever one you choose.

Jessie: You're gonna see the same data points, same terms.

Jess: You're gonna see them, no matter which platform or brokerage firm you're using.

Jessie: Exactly.

Jess: I'm a visual learner.

Jessie: So this just tells you how big of a market cap Microsoft is as a comparison to their peers.

Jess: They're putting Oracle in there.

Jessie: It's a smaller bubble, so it's a smaller market cap.

Jess: That's it.

Jessie: Let's see how I would get stuck in this rabbit hole, just like, oh, it's Oracle, let me click on them.

Jess: So remember when we talked about how, when we look at earnings, we look at our expenses versus our revenue, which is like our paycheck versus how much it costs us to live.

Jessie: You want the biggest cushion in between those two.

Jess: Oh, okay.

Jessie: I wanna know their revenue exposure.

Jess: And this changes.

Jessie: 34% of their revenue is from server products and cloud services, 23% from office products, 13% from Windows, gaming, LinkedIn.

Jess: I didn't know they own LinkedIn.

Jessie: I am not ashamed to say.

Jess: I should have known that.

Jessie: I did not know that.

Jess: This is how you go validate your investment thesis.

Jessie: So we said that, oh, it's open AI or artificial intelligence.

Jess: Well, most of that is under the top two here, server products and cloud services.

Jessie: So we know that this has a high exposure.

Jess: It's a tailwind for the job thing.

Jessie: Automation is a tailwind for the short labor supply in the market.

Jess: We wanna know if revenue is growing over time.

Jessie: So you can clearly see this increasing revenue for Microsoft got increasing net income.

Jess: And then we see the percent of profit margin.

Jessie: I just, you just wanna see these numbers go up.

Jess: That's it.

Jessie: I don't wanna read the numbers.

Jess: I wanna see a visual of those going up.

Jessie: And this is every single year.

Jess: These visual bar graphs are very helpful.

Jessie: So you don't have to spend a lot of time.

Jess: You can just kind of look over things after you get the hang of what you're looking for, what you're trying to validate in your investment thesis, what's important to you with your risk tolerance.

Jessie: Eventually, the more we look at these things, the easier it'll be for us to just say, this looks like it's checking the boxes for me personally to buy it or not.

Jess: Exactly.

Jessie: This is a great visual.

Jess: This solid line is the estimate of earnings.

Jessie: This green line is the actual.

Jess: So I can see that they have beat earnings since Q4 of 2022.

Jessie: Wow.

Jess: Oh yeah.

Jessie: So they beat their projected earnings the last four quarters.

Jess: That's right.

Jessie: And now their earnings has been raised.

Jess: Are they going to beat that? And if they don't, what do you think will happen? The stock will go down? It really depends on the why.

Jessie: Did they have really good revenues, but a really high expense all of a sudden that caused them to miss earnings? But it's also like setting expectations.

Jess: CEOs try so hard to be transparent about expectations because they want to beat earnings.

Jessie: The C-suite is paid by stock and they want their stock to go up.

Jess: So they'll say, hey, and they did.

Jessie: Microsoft did publicly.

Jess: So we have added a hundred billion of revenue from open AI.

Jessie: And the stock will immediately react to that because they expect it to show up in earnings.

Jess: So if that doesn't show up in earnings, that'll make the stock go down.

Jessie: Right.

Jess: So the stock market is always- Forward looking.

Jessie: Yeah.

Jess: I love it when Jessie does that.

Jessie: So excited.

Jess: You don't necessarily have to be a fortune teller or a profit because we have a lot of data.

Jessie: All this information shouldn't be overwhelming.

Jess: It should be the useful tool for you to get everything you need to make a good decision.

Jessie: We wanted to see, are they making money? You're literally job hunting right now.

Jess: You want to put your money to work.

Jessie: And so your money's going to give you a job.

Jess: Yes.

Jessie: So you're like, what job do you want money? This company's constantly getting raises.

Jess: So I want to work in that company because they keep getting raises.

Jessie: You want your stock to get raises.

Jess: And if you're looking for a dividend, that just means you want bonuses, you know? But before you go to work, we're checking out the job.

Jessie: You can read reviews about how other people feel about the company.

Jess: We're interviewing them, asking them- SaaS questions.

Jessie: What are you doing? Do you care about the environment? Do you- All of it.

Jess: Care about your employees? Are you innovating? Are you not? What are you doing? Perfect.

Jessie: So this is constantly beating expectations.

Jess: Awesome.

Jessie: I think they have a high likelihood of doing that again.

Jess: Yeah.

Jessie: Anyway, so earnings.

Jess: You still have the news.

Jessie: And then it's back to that same stuff we see before.

Jess: How is it performed versus the market? How is that performed versus its sector? Didn't we talk about beta a little bit? We did a little bit.

Jessie: It still confuses me though, I'm not going to lie.

Jess: So this is the rollercoaster.

Jessie: Your market has a beta of one.

Jess: That's the type of volatility that you should expect.

Jessie: The normal rollercoaster.

Jess: That's the overall market.

Jessie: The S&P 500, yes.

Jess: Microsoft has a beta of 1.21.

Jessie: It's a little bit more of a volatile rollercoaster.

Jess: It moves more than the market.

Jessie: But it also means it goes up more and it also goes down more.

Jess: So you could get more money or you could lose more money.

Jessie: Yeah, it's the type of volatility that you are willing to accept.

Jess: I really think volatility is something that you can use for your advantage and it has a bad reputation.

Jessie: Diversify your portfolio.

Jess: That's part of it, right? Like you can have some high volatility things in there and you can have more or less depending on like what your long-term goals are and like how far out you are.

Jessie: So, you know.

Jess: And there are things that perform better in different environments and that's why we should talk about the business cycle.

Jessie: Yeah, I still don't know what that is.

Jess: A really great Taylor Swift era's analogy.

Jessie: Oh, here we go.

Jess: Surprise.

Jessie: It's Taylor Swift again.

Jess: You're seeing everything in Taylor Swift references.

Jessie: I love her.

Jess: She might need to have an intervention.

Jessie: What's the goth version of Taylor Swift? Maybe Susie and the Banshees.

Jess: Look what you made me do.

Jessie: Okay, I'm gonna shake this off.

Jess: We're never gonna have bad blood.

Jessie: Oh my God.

Jess: And the fact that I actually like know that those are the references now.

Jessie: She's gonna, you belong with me.

Jess: Anyways, it's the analyst ratings again.

Jessie: So, they'll give you a buy, a sell, a hold and a price target.

Jess: So, where they feel like it's gonna be within the next 12 months.

Jessie: And then you can go into the report and see why.

Jess: All of this information is really great.

Jessie: We all learn differently and you may wanna understand the why behind the data.

Jess: I'm definitely that way.

Jessie: Yeah, me too.

Jess: But if you don't wanna be that way, you don't have to.

Jessie: That's why there's analyst reports.

Jess: People will do the work for you.

Jessie: Either way, you need to do your homework and whether someone else does it for you, that's the stuff you're not gonna find on the Google research is your brokerage firm pays for the Morningstar ratings and the Cifra ratings and the S&P 500 ratings.

Jess: Google does not.

Jessie: When we see the bulls say and bears say, because I've seen this across a few different brokerage platforms, we learned that the bull market is when things are up, bear markets when things are down.

Jess: So, when it says bulls say, they're the ones that are looking at it more positively.

Jessie: It's the debate, right? Do you like Taylor Swift or not? Well, I don't understand why you wouldn't, but if you loved Taylor Swift, you'd be the bull and you'd say, well, I think she's the greatest of all time because she's transitioned from country all the way over to pop and she's a lyricist, literally caters to all the STEM girls.

Jess: She wrote a speech that were lyrics for a song five years earlier, paints her nails colors so we can figure out the puzzle and is a genius.

Jessie: So therefore, yeah, Taylor Swift or- Bears are saying, yeah, I totally get that.

Jess: She's great and all, I just can't get into her music right now.

Jessie: Yeah, it should be substantiated by something, which is nothing in this case, but yes.

Jess: Maybe you're trying to have a debate if Taylor Swift is gonna sell out in music and stuff because this equates to money.

Jessie: You can even use this to argue risk though, because you do wanna look at both sides when you're analyzing a stock.

Jess: Why do I think it's gonna go up? So the bulls say public cloud is widely considered to be the future of enterprise computing and Azure is leading services that are evolutionized.

Jessie: That is all about AI stuff.

Jess: So that would fit into our whole thought process.

Jessie: Whereas the bears is like, okay, well, subscriptions are going away, particularly in office.

Jess: They don't have a mobile presence.

Jessie: These could also be headwinds that Microsoft is facing.

Jess: It's good to know that too.

Jessie: So what's the bull case? What's the bear case is what we'll call it.

Jess: Why do you hate it? Why do you love it? It's good to know.

Jessie: It's good to see the debate sides of it, of the coin or whatever.

Jess: Is it gonna be a cruel summer? Are you gonna shake it off? You just have to know it all too well.

Jessie: Look, you'd actually did really good on pulling that all the way through, so.

Jess: Thank you.

Jessie: I think Taylor Swift reference will finally make it in the edit for what happens.

Jess: But then you can have the outlook for certain timeframes.

Jessie: Remember we're thinking long-term.

Jess: So many things, it could be like short-term, they're bearish, but long-term, there's this infrastructure bill.

Jessie: So the bullish, there's also technical things that go with that.

Jess: There's a lot to consider.

Jessie: And ESG, which is so, so important.

Jess: And why? ESG is not just climate.

Jessie: That is so important.

Jess: It is environmental, social, and governance, also known as impact investing.

Jessie: So where are they? They're a leader in environmental.

Jess: I have the environmental score, yeah.

Jessie: Human capital development, they're average.

Jess: Okay.

Jessie: What does that mean? Like developing their employees into better positions? Okay.

Jess: Their human capital and their governance.

Jessie: It's like a high average.

Jess: So that's the corporate governance is how it tells you the issues.

Jessie: This issue evaluates a company's lean tech innovation capacity.

Jess: But then there's also opportunities in clean tech is another score.

Jessie: This is their whole ESG report.

Jess: And they're called pillars, the environmental, social, and governance.

Jessie: And then they put them all together.

Jess: Here's all the controversies.

Jessie: Labor management didn't know this.

Jess: It was a class action filed by three former employees about the mismanagement of a 401k plan that will impact their ESG score, but it was dismissed.

Jessie: So it's good to know that.

Jess: Good to know.

Jessie: Just use them as an example today.

Jess: Advice.

Jessie: That's right.

Jess: Curiosity.

Jessie: Do your research, which we're helping you do.

Jess: Stay curious.

Jessie: This is all the information that you get on a stock.

Jess: It's just information to help you make a decision.

Jessie: Your brokerage firm displays it all in different ways and that's how they attract you.

Jess: Well, that was helpful.

Jessie: All right, well, that's our deep dive into the wonderland of stock quotes and how to read a detailed quote.

Jess: We've decoded the jargon, demystified the numbers, and hopefully made those somewhat intimidating quotes a little less scary.

Jessie: And remember, we want you to know what all of the data means that is available to you at your brokerage firm, which you should have hopefully have been able to confidently pick after our last episode on how to pick a stock brokerage firm with the wonderful Blaine from stockbrokers.com.

Jess: And remember, you can always ask us more questions if something comes up when you're actually putting these things into practice yourself and doing some research.

Jessie: You know, I always do, if you follow us on TikTok, I'm constantly asking even more questions I forgot to ask during the recording of our podcast.

Jess: So feel free to do the same.

Jessie: I don't have to be the only one asking questions.

Jess: You can ask questions too.

Jessie: Don't forget to check out the episode equity on our website for even more details on stock quotes.

Jess: Because yes, there could be more details.

Jessie: That's marketmakeher, H-E-R, her, podcast.com.

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Jess: Until our next financial adventure, keep investing, keep learning, and keep breaking those barriers.

Jessie: Remember, investing involves risk.

Jess: There is always potential to lose money when investing in securities.

Jessie: Market Make Her provides educational content and resources for informational purposes only.

Jess: We are not registered financial advisors.

Jessie: For more information, visit marketmakeherpodcast.com..