What moves stocks in the long-term?

Discussion in 'Stocks' started by zbojnik, Mar 15, 2015.

  1. dbphoenix

    dbphoenix

    I agree with all three of your points. But it pays to make a distinction between the value of a company -- which is based on fundamentals -- and the value of a stock -- which is what traders are willing to pay for it. Those who fail to make this distinction start thinking that the stock is worth more than its current price, or that it's "too high", which is where the trouble starts.

    Evaluating a company based on its fundamentals isn't what it used to be, which is why I stopped fiddling with stocks in the late 90s.
     
    #41     Mar 16, 2015
  2. BSAM

    BSAM

    Okay...I won't say it.
    But, if you know how to read a chart; guess what you are reading?
     
    #42     Mar 16, 2015
  3. zbojnik

    zbojnik

    No one can trade successfully by just looking at chart.
     
    #43     Mar 16, 2015
  4. BSAM

    BSAM

    Hmmm...Uh...okay, brother.
     
    #44     Mar 16, 2015
  5. BSAM

    BSAM

    (Sometimes points just ain't worth arguing.)
     
    #45     Mar 16, 2015
  6. dbphoenix

    dbphoenix

    That's one of the chief distinctions between trading and investing. Investors have no reason to study charts. Traders have no reason to study annual reports.

    It's difficult to puzzle out just what you're asking. It sounds like you're trying to figure out how to choose a company whose stock you can buy and hold for the longer-term. Unfortunately, there's a lot more to it now than reading analysts' reports and studying the fundamentals. The Motley Fool people found this out the hard way in '00.
     
    #46     Mar 16, 2015
  7. BSAM

    BSAM

    Brother DB, any real investor is going to (also) consult the chart.
     
    #47     Mar 16, 2015
  8. dbphoenix

    dbphoenix

    Depends on what you mean by "real" investor. The Motley Fool people don't bother with charts at all.
     
    #48     Mar 16, 2015
  9. Handle123

    Handle123

    I certainly agree with you, back in late 70s and early 80s I did all the hubbub of studying Revenue, earnings, debt, PEs, Insider buy/sell etc, but when you now see stocks go on up with zero earnings and "a hope and a dream", I just think many hardly even know what the underlying even makes and just see stock symbol. Few see the reasons of just trading dividend stocks that are optionable. I laugh when so many are going for a penny profit.

    BUT not every seller has a buyer when market is plummeting at a decent price, I am always giddy when I have sold short Google and thing takes a dump, don't come down in dimes, bids dries up.

    That's like asking if your heart will be beating in five minutes from now? Will you know if your heart be beating?
     
    #49     Mar 16, 2015
    beginner66 likes this.
  10. dbphoenix

    dbphoenix

    Actually, they do. They just have to lower their ask so much in order to get one. Watching a tick chart and seeing all the gaps can be very enlightening to a newcomer.

    But as for your comment about the 70s and 80s, I sometimes wonder if it's best not to know all that. I doubt there are many modern traders who know that PEs used to reflect the amount of time it would take a company to "grow into" their earnings estimates. Now you have AMZN with a PE of 160+. Or that investors used to buy companies for the dividends. Seems the only strategy available to today's investors is buy low, sell high, but if they don't know how to detect a bottom, they don't even have that.
     
    #50     Mar 16, 2015