Why Do People Buy Negative Earning Stocks?

Discussion in 'Trading' started by tradingjournals, Jun 30, 2011.

  1. Why do individual investors buy negative earnings stocks (if they do buy them)?
  2. Bowgett


    I buy them for instance when company sells for half of its book value. Here is an example: if company loses $10M/quarter and owns 10 buildings for $1b each. You can buy it for $5b, right?
  3. but you are not the first one in queue,right?
  4. bone

    bone ET Sponsor

    So they can buy them cheap, and sell them even cheaper.
  5. a company may be developing a product that will bring $$ down the road while burning cash at present. biotech stocks are a good example of this type.

  6. I thought you noo - I thought everybody noo - I thought wrong.

    The answer is easy and is the answer than that drives all things market related.

    E X P E C T A T I O N S
  7. i`d understand if you said no

    :D :D :D
  8. piezoe


    That's a really great question!

    If you are trading intraday or very short term, then the answer is obvious: because they are going up.

    But it's a really good question with regard to folks who buy this crap and hang on to it.

    I'm sure you will get all sorts of rationalizations from folks who buy these stocks and hang on to them. But will those answers make any sense?

    The only answer that I can think of off hand and that would make some sense would be "inside information."

  9. You keep hesitating, I already said, Yes.

    It reminds me of this couple, both virgins on their wedding night.

    Standing at each side of the bed, she says to him, "I offer you my honor"

    He responds, "I honor your offer"

    Nothing happened thereafter.
  10. Lucrum


    Why do you keep asking stupid questions?
    #10     Jul 10, 2011