How Big Is This Company, Really?
A $50 stock price doesn't tell you much about a company's size. A $50 stock could be a tiny startup or a giant corporation — it depends on how many shares exist.
Market cap fixes that. It's the most honest way to measure a company's size.
Market Cap = Share Price × Total Shares Outstanding
If a company has 1 billion shares at $50 each, its market cap is $50 billion.
The Three Tiers
Large-Cap ($10B+)
- The household names: Apple, Microsoft, JPMorgan, Walmart
- Stable, profitable, often pay dividends
- Lower growth, but lower risk
- Hard to double your money quickly — but hard to lose it all
Mid-Cap ($2B–$10B)
- Growing companies still climbing the ladder
- More room to run than large-caps
- More volatile, more news-sensitive
- Often the sweet spot for growth investors
Small-Cap ($300M–$2B)
- Smaller, less-known companies
- Can double or triple in a year — or lose 50%
- Often under-researched, so there's more opportunity (and risk)
- Highly volatile
(There are also Micro-caps and Mega-caps at the extremes — but the big three tiers are what you'll use most.)
FSL Strategy by Cap
- All large-caps → Safe, steady, but unlikely to win the league
- All small-caps → Could win big or crash hard
- Balanced mix → The typical winning approach
Think of your draft like investing real money: a foundation of large-caps, some mid-cap growth, and a couple of small-cap lottery tickets.