Saturday 19 April 2014 - Filed under Variety
- I think much of the drop in the stock market has been somewhat irrational. Are oil prices going up; yes. But, I personally think a large part of this is due to speculation. There are some companies that seem to be weathering the storm, though. According to B. Graham the market goes back and forth between irrational exuberance and irrational pessimism. It seems that we are getting closer to the pessimism at this point. Any thoughts greatly appreciated regarding these comments.
Answer by Nick Z
Stock market prices reflect not just the present economic conditions but also expected future economic conditions. And since no one can predict the future with any certainty. You can make perfectly rational arguments for both negative and positive outcomes in the future.
I think the market is always logical and rational. But the premises for its rationality are uncertain. And thats why the outcome of the markets rationality is so fickle and uncertain.
Perhaps the stock market has been a little bit like a pyramid scheme during the last couple of decades. Many investors dont care about getting dividends any more. They buy stocks in the hope that later on they will sell these stocks to someone else at higher price. Investors depend on ever increasing stock prices. Just like recently people depended on ever increasing house prices. And I think that eventually stock prices will end up the same way as the house prices have ended.
All pyramid schemes eventually fail in the end.
- I am just curious on how the stock market works and how I can make some money I hear stories that people buy and sell shares from stock markets and make money is this kind of like gambling?
Answer by Alex
Stock market, as the common notion goes, is not gambling for money. It rather is pure mathematics and what we call in statistical terms, econometrics. So, when you are new to stock market investing, trying to find your way out, you indeed could do with the help of a stockbroker, who know the principles of how the market will work for a set of political and financial developments. And once you know your way about the market, you could do with discount brokerages, which charge you a lot lesser than the traditional stockbrokers in lieu of providing you with lesser advices. Discount brokerage allows you to take your own decision with little or no help from the stockbrokers as per your preferences.
See below for more help in the stock market.
- Im 15 and very interested in the stock market so I hope you can answer my questions with understandable words that someone my age can understand
What is the stock market?Random Clickbank Contributions towards Totesport -
What is the stock exchange and is it the same as the stock market?
What is Nasdaq, NYSE and how many stocks exchanges exist in America?
When and why was it created?
How does it work?
What does a private and public comapny mean?
How does the investing work?
Does every company make its initial stock market price or what happens there?
How does a company get into the stock market?
Does every company need to have a stock market?
Answer by BBG
Go to your library and get a book called “Learn to Earn” by Peter Lynch. It is written in language you will be able to understand and will inspire you, not just inform you.