How the Market Works

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How the Market Works - 10/7/2008 10:23:30 AM

MistresseLotus

Posts: 443
Joined: 9/19/2008
From: (aka LotusSong)
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This almost NOT humorous... only because it's true. (If you are not into the market.. don't waste your 8 minutes)The Market Explained

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I leave it to the 20-somethings to do the "open-minded, total unconditional acceptance thing" for it's how THEY learn that all the things others older than they have deemed BS, are in fact BS. What a waste of a decade.

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RE: How the Market Works - 10/7/2008 10:36:45 AM

tsatske

Posts: 2037
Joined: 3/9/2007
From: Louisville, KY
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*I* have questions about how the market works. Srrsly. What causes the market to dip? really?
I mean, I am not exactly a financally savvy person, I never taken an econ class - but even I know that the solid companies are not going to stay down over something that is in todays news. Even I know that when the jackasses we elect to congress refuse to pass a bail out, no biggie, they will pass one later in the week. I told Master - go buy something. anything, really, while it is down.
So, If *I* know that, how come all these smart, degreed, well educated idiots don't? What causes them to go - OMG, the price is down, hurry, hurry, sell my stock in Walmart, this may be my only chance to lose money!

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“If you never did you should. These things are fun and fun is good”
~Dr. Seuss quote

(in reply to MistresseLotus)

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RE: How the Market Works - 10/7/2008 10:50:37 AM

corysub

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Joined: 1/1/2004
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Owning a share of stock makes you a "partner" in the corporation. Like any business partner, you hope the business does well and show good earnings growth, has a unique or a strong competitive advantage in the business and, particularly these days, a company that has a strong management team and solid balance sheet.
If all these things come together, your hope is that some other guy/gal might also want to be an owner of the shares. Since there is a set number of shares out in the public hands, the only way to own them would be to buy them from a current shareholder, like you, or sometimes should the company decide there is a business need to sell more shares in a secondary offering via a prospectus available at any participating broker.

The stock goes up and down in value depending a many factors...most importantly being the earnings performance of the company, growth in market share, continued innovation in product offerings (the problem with US auto companies that did not keep up with Japanese innovation and excellent back-up service), as well as the industry the company is working...steel, auto, rails, technolocy, finance, etc. Obviously, you could have shares in one of the better quality banks these days and still see you stock go down in value if the buyers are just not interested in that group for a variety of reasons.

Anyway..this is getting kinda long winded,, and I am sorry for that...but there really is no one line answer to your question other than the cliche "more buyers than sellers, a stock goes up, and vice versa" If you have any specific question please IM me and I would be happy to chat with you.

cory

(in reply to MistresseLotus)

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RE: How the Market Works - 10/7/2008 11:08:27 AM

seeksfemslave

Posts: 4011
Joined: 6/16/2006
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The current problems were not caused by dealings on the stock market., phony as they often are.

The video was brilliant and a good way to learn a bit of Spanish.

(in reply to corysub)

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RE: How the Market Works - 10/7/2008 11:21:54 AM

BlackPhx

Posts: 3432
Joined: 11/8/2006
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Pretty damned accurate..making it ironically funny

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