As we all know, ag gaming casinos throughout the nation, including those in Las Vegas, have been shuttered for a significant part of this year. Even if you can get the gambler out of the casino, it’s not that simple to get the gambler out of the game of chance.
Some players, especially those residing in states that have allowed and regulated internet gambling, may have shifted their focus to this medium in order to satisfy their gambling need. Others saw this as an opportunity to try their hand at stock trading at a time when there was “no time like the present.”
Fortunately, beginner traders and even seasoned pros who are re-entering the market may take comfort in the fact that it would have been difficult to choose a better market…especially for those who began trading in the latter half of March.
There was plenty of paper money to be won in the places where paper money had been lost provided you did your research and made wise decisions on your bets. In the case of those traders who took the time to thoroughly study fundamentals, making a poor choice was far more difficult than making a successful one. In the face of an all-around economic rebound, selecting winners isn’t nearly as difficult as it was in the past.
This was much more true for casino stocks than it was for anything else, but we’ll discuss the economic effect (which has already occurred, is now occurring, and will occur in the future) in a subsequent post.
In any case, be sure to read the part titled, “DON’T PLAY THE OTC’S.”
WHAT EXACTLY ARE STOCKS?
Stocks are basically nothing more than a portion of a company’s ownership in the organization. For example, if a business has 1,000,000 outstanding shares of stock, no company-owned shares of that stock, and you possess 10,000 shares of that stock, you effectively control 1 percent of that corporation.
When a business’s ownership is decided by stock ownership, the company is classified as a corporation if the stocks are traded on a public market.
Stocks may be issued by private businesses as well. The main distinction between public and private businesses is that any sale or acquisition of the company’s shares must be approved by the company. In effect, it becomes more of a partnership (although on a huge scale), with various workers, investors, and insiders each holding a specific portion of the business.
As a result, when individuals speak about “trading stocks,” they are talking to equities in businesses that are publicly traded. A variety of stock indexes, including the DOW (Dow Jones Industrials), NASDAQ, S&P 500, and the Russell 2000 for smaller firms, include the most well-known corporations. Overall, stock trades…which are still transfers of ownership from one person/entity to another—are managed and regulated by the index, in conjunction with the Securities and Exchange Commission (to whom the businesses are required to submit certain reports and disclosures).
Another important distinction between corporations and other business structures such as partnerships and sole proprietorships is that the underlying corporation essentially intends to remain in perpetuity, to go bankrupt, or to be acquired at some time. With partnerships and sole proprietorships, you may simply elect to shut (for example, a restaurant) and then divide up any positive assets (after paying off debts and divesting themselves of the business) according to the ownership percentages of the partners and single proprietors.