Stocks are leading indicators. This is true because of how the market was designed. People who play this game, make bets about the future of a stock. Regardless of their betting direction, it's that looking into the future, that makes the market trade in advance of factual information.The people that are making these bets often have very good reason to do so. They understand the prospects of what they are buying and selling. They understand the fundamentals of the business. This understanding, can come f...
People actually attempt to apply the laws of gravity to stocks. It so drilled into our heads, that what goes up, must come down, people try to apply this physical law to stocks. A stock can go up, stay up, and then go up some more. The amount of terrible advice, and mis-information out there is astounding. Peoplesuggesting to sell, or buy, for all the wrong reasons. Like I've mentioned before, so much of this game is just keeping an open mind, not allowing yourself to get stuck on one piece of informatio...
The amount of shares outstanding varies from business to business. One company might have 1million shares outstanding, while the next, 1 billion. Not only that, the float size can change at any time, depending on the company's actions. They might sell more shares into the market to raise money, or decide to buy back shares to shrink the float, and increase Earnings Per Share (EPS). Sometimes companies do "splits" and "reverse-splits" which restructure the float, and share structure.The amount of shares o...
How much money do you need to get started in the stock market? The answer is as much as it takes, to keep you interested. You need to care about your stocks, and care about the money. This will cause you to pay attention to the latest news releases, and earnings reports for your stocks. It will cause you to sell the stock, taking 10% losses, but saving that other 30%, had you rode it down.An Example. Fred invests $500 in Starbucks, and loses 10%. His investment is now $450. Jim invests $50000 in Starbuck...
Averaging up, or down, can be a solid tactic to maximize your profits. It's also a very dangerous one. Let's say you have purchased 100 shares of Apple at an average cost of $400 per share. If your reason for buying, or your "thesis" is correct, then as the share price drops, you actually have to like the stock more. This applies even more greatly, if an outside force is impacting the market, and your stock, is poised to beat earnings. If Apple's stock price were to sell-off, rather than sell the sto...
The word "Cap" is short for Market Capitalization. Market Capitalization is simply the amount of shares a company has in their float, multiplied by their current stock price. This number is supposed to give you an idea ofa companies overall value, and size.There's small caps, mid caps, and big caps. All they're referring to, is how big and established the company is. Most people who own, and trade stocks, use mostly big caps to do so. These companies are established. They have been around for years. They...
Most public listed companies are expected to release their results every 3 months. Smaller companies may just put out a press release, but more established companies use a "Conference Call". During this time the company releases their results, from the 3 previous months, via a audio presentation, telling you revenues, earnings per share, and other details.The conference call is proceeded by a press release with the basic details of how the 3 months turned out. Then it's up to the management team, to clar...
