Breaking down how the world works—from markets to systems to everyday complexity—in ways that are clear, useful, and grounded in first principles.
These are lessons I'm writing to explain complex topics to my kids as they grow up. The goal is to build real understanding—not just surface-level explanations—by focusing on fundamentals, using clear examples, and connecting ideas to things they already know.
If these help you too, that's great. Product management is really just explaining complex systems clearly enough that people can make good decisions. This is practice.
A foundational lesson on what stocks are, why companies issue them, how markets work, and what drives stock prices—explained without jargon or assumptions.
A stock represents ownership in a company. When you buy a stock, you own a small piece of that business. If the company is worth $1 billion and there are 100 million shares, each share represents one-hundred-millionth of the company—or $10 per share.
Owning stock means you own part of the company, but you don't control it unless you own enough shares to influence decisions (usually a majority). Most shareholders have minimal control—they're betting the company will grow and their shares will be worth more.
Companies need money to grow—to build products, hire people, expand into new markets. They have a few options:
Issuing stock is attractive because you don't have to pay the money back. Investors give you cash now in exchange for a share of future success. If the company fails, they lose their investment. If it succeeds, they profit.
The stock market is where people buy and sell shares of companies. Think of it as an auction house that's always open. Buyers and sellers come together, and the price of a stock is determined by what people are willing to pay for it right now.
If many people want to buy shares of Company X (high demand) but few are selling (low supply), the price goes up. If people are rushing to sell and no one wants to buy, the price drops.
Stock prices aren't fixed. They fluctuate constantly based on what buyers and sellers agree to in that moment. The "market price" is simply the last price at which a trade occurred.
At a fundamental level, stock prices are driven by expectations about a company's future profitability. If investors believe a company will make a lot of money in the future, they'll pay more for its stock today. If they think it will struggle, the price falls.
Key factors that influence prices:
This is the core principle of valuation. A company is worth the present value of all the money it will generate in the future, adjusted for the risk that those expectations won't come true.
The stock market is a mechanism for pricing ownership in businesses based on collective expectations about future performance. Prices change constantly as new information arrives and investors reassess what they think will happen. Understanding this—rather than treating stocks as magic numbers—is the foundation for making informed decisions about investing.
Topics I'm planning to write about as these lessons expand.