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Morac
Cat god

join:2001-08-30
Riverside, NJ
kudos:1
Reviews:
·Comcast
reply to Oh_No

Re: Not transparent, but necessary

said by Oh_No:

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.

While that's true, normally people aren't willing to pay a lot for stock in a tanking company. The inverse is also true. People tend to buy stock in companies that are doing well (or well liked), which is why Apple, Google, Amazon, oil companies, etc stock prices are high.
--
The Comcast Disney Avatar has been retired.


Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
said by Morac:

said by Oh_No:

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.

While that's true, normally people aren't willing to pay a lot for stock in a tanking company. The inverse is also true. People tend to buy stock in companies that are doing well (or well liked), which is why Apple, Google, Amazon, oil companies, etc stock prices are high.

Yes, but that is not a real link. It is a gamble every time you make assumptions of how people will buy and sell stock.
A company can be tanking and Jim Cramer can tell everyone to buy it, the price will rise due to sellers taking advantage of the demand, and people will still buy it.