Strateco Resources Inc SRSIF

RE: Stupid Qestion for anyone..

[TheFever]

Market cap is just the total value of the company. The thing you want to eventually understand is the relationship between market capitalization and total number of outstanding shares. You already know what a shareprice is. The shareprice is simply a calculation of market cap divided by total number of shares. That's why you want to look for companies with a low number of outstanding shares because as the market cap grows, the shareprice of Company A will rise exponentially compared to Company B who is at the same shareprice but has 3 or 4 times as many outstanding shares. All other things being equal, you'll see the shareprice of Company A rise 3 or 4 times faster as a result, even thought they have identical market capitalization. That's why it's great to be in a company that still has reasonably low outstanding shares but has appreciated significantly in value. The reason for this is dilution. If a company worth almost 4 bucks wants to raise 20 million dollars they only have to add another 5 million shares to the equation, which in this case would be just 5% added to the float. These poor 10 and 20 cent companies that need to raise a lot of money can double the outstanding shares overnight, leaving nothing but bagholders in their wake. A good examply is YZC. They have 323,948,292 outstanding shares, so the company would have to have a market cap (or total worth) of $1,169,453,334.12 just to have the same shareprice that we have at a market cap of $384,377,880. Another example. BLE is sitting at a shareprice of $17.70 and a market cap of $1,967,614,447. If YZC had that same market cap their shareprice would be worth $6.07. But YZC will probably have over 500,000,000 shares out by the time they ever get to where BLE is sitting in terms of market cap so they'll only be worth $4 then. Who knows. IMO. The stock market started to really make sense once I understood this relationship. And you'll want to get your information on total outstanding shares from only 2 places: either the TSX.ca website or from the company itself. Stockhouse does not have correct OS information. I don't think I've ever seen them with the same number as the TSX website (which is as official as you can get) for any company I've ever looked up. The Fever