Questions tagged [stocks]

This tag is to be used for any questions related to Stocks. Ideally they should be accompanied by a country tag if relevant. It is discouraged to ask question about a specific stock. However an example can be used to illustrate a point.

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230
votes
21answers
76k views

Why isn't everybody rich?

This question came up after reading this question (stock market long term risks), in which it is re-iterated (as it has been many times on this site), that investing in the stock market, especially an ...
194
votes
13answers
51k views

Why would a company care about the price of its own shares in the stock market?

After a company has issues shares, why should it care if the value of the shares go up and down? Since the shares are now being traded among the public, if the value goes up or down, that is strictly ...
152
votes
10answers
33k views

Do I make money in the stock market from other people losing money?

Basically I am new to stock trading and neglect to see the differences between trading stocks and betting on sports. Basically I am "betting" on which company will do well, and this can change due to "...
149
votes
3answers
604k views

Can someone explain a stock's “bid” vs. “ask” price relative to “current” price?

In my online brokerage account, I want to buy a particular stock and I see the following: Bid: 13.20 x200 Ask: 13.27 x1,000 the current stock price is 13.22. Can someone explain what ...
109
votes
10answers
14k views

Why should we expect stocks to go up in the long term?

I have read in many personal finance books that stocks are a great investment for the long term, because on average they go up 5-7% every year. This has been true for the last 100 years for the S&...
108
votes
12answers
99k views

In the stock market, why is the “open” price value never the same as previous day's “close”?

This is something that is mind-boggling to me, and it is particularly obvious in candlestick graphs: Why is the open value never the same as the previous day's close value? This is something I just ...
102
votes
7answers
52k views

Why is the stock market closed on the weekend?

It's all digital and done with computers these days, so why bother? Doesn't that just make the system less liquid, which is the opposite to one aim of having the stock market? Plus can't you just ...
100
votes
7answers
23k views

Why is stock dilution legal?

What I always heard, since I was a child, was that if you own a stock share, you actually own a small share of a company. That seems to be the general consensus of what a stock share is. Well, that ...
92
votes
1answer
17k views

Found old paper shares of Motorola Inc that has since been broken up

I found 36 physical shares of motorola inc from 1999. I know that since then the company has split up into a lot of subsidiaries/mergers. Is there any to sell this physical stock or is it worthless? ...
81
votes
10answers
17k views

Why does a company pay dividends at all?

If a company can lower the dividends and even stop paying them at all during hard times, why would they re-install them at all? If I understand correctly a company pays dividends so that investors ...
67
votes
3answers
15k views

How did this day trader lose so much?

I recently read this article about a day trader that lost $100,000: A trader started a GoFundMe page to pay back $100,000 to E-Trade after a disastrous short Please explain this, because I can not ...
64
votes
11answers
13k views

Stock market long term risks

This question has been spurred by the following question which was on the 'Hot Network Questions' Is it a lie that you can easily make money passively in the stock market? . The answers to that ...
64
votes
10answers
16k views

Are Index Funds really as good as “experts” claim?

I use the quotations because generally the people touting these the most (John Bogle) are also ones selling the index funds. Being biased doesn't mean they're wrong, but it does mean they may not be ...
61
votes
2answers
15k views

Found more old paper shares from broken up companies

I recently asked a question with regards to 36 physical shares of motorola inc from 1999 I found lying around. Thanks to the great answer I received (if you're wondering they're worth around $3000), I ...
61
votes
5answers
16k views

Can a company block a specific person from buying its stock?

Say there is a very rich, very unpopular individual. This individual wishes to buy millions of dollars in stock in a company he or she thinks will be successful. The company, however, realizes that by ...
60
votes
4answers
115k views

How does a public company issue new shares without diluting the value held by existing shareholders?

When a public company issues new shares, the total number of shares traded in a secondary market goes up. Assuming there is no change in the fundamentals of the company and the profitability, I would ...
59
votes
14answers
30k views

Is it a lie that you can easily make money passively in the stock market?

People on this site often recommend that investing in an index fund is a good, passive way to make money long-term. But this is clearly not true. Even if we ignore the risk associated with ...
59
votes
10answers
11k views

If a broad long-term investment in the stock market is such a good deal, why don't banks do the “obvious” things?

There is a fundamental discrepancy or paradox that has been keeping myself, and many others, away from the stock market. Before I explain it, let me mention some selected popular questions on this ...
58
votes
8answers
96k views

Theoretically, if I bought more than 50% of a company's stocks, will I own the company?

Inspired by this question, I wondered what the implications of owning the majority (> 50%) of a company's stocks are. Will I own said company? Will I be able to call the shots? What if someone was ...
55
votes
9answers
17k views

Is it true that, “just ten trading days represent 63 per cent of the returns of the past 50 years”?

I have fallen down a Wikipedia rabbit hole and landed on the page titled Seven States of Randomness. I can't explain in a single sentence what it is talking about, but my question is about an odd ...
54
votes
5answers
14k views

How can I sell my shares in a privately-owned company I used to be employed by?

Basically, I was a software developer at a company and I was issued some stock options early on, before the company grew significantly. The company then hired a CEO who pledged to take the company ...
52
votes
6answers
25k views

How can a company use money from stock investors when they are constantly being bought and sold?

I am interested in the mechanisms which a company can use the money that investors give them when they buy a public stock since they are being bought and sold constantly. How can a company spend other ...
52
votes
4answers
13k views

On paper I have 1 share in my company. How can I sell a smaller percentage of my company to another party?

To be specific, my wife and are equal partners in our limited company. On paper it says we have one share each. We now want to sell 10% of our company to a third party. How does that work in terms of ...
51
votes
10answers
16k views

One of my stock positions has grown substantially. Should I rebalance my portfolio?

I'm a small beginner investor with less than 50k portfolio. One stock I hold has grown substantially than everything else and makes up 46% of my portfolio, but it is expected to keep growing and has ...
49
votes
9answers
22k views

Investment strategy for Google: What did I do wrong?

Background: I started investing in stocks in October 2017. I have a $22K portfolio which is 60% software, 20% semiconductor, 10% healthcare, 10% others (retail, banking, etc.). It's tech-heavy ...
49
votes
2answers
14k views

Why did Tesla's stock value drop by 40 USD for just 5 minutes on August 2nd at 3:20pm?

Google Finance reports that Tesla's stock value dropped by 40 USD for 5 minutes on August 2nd, 2018 at 3:20pm What caused such a drop in stock value in the span of 10 minutes?
47
votes
12answers
15k views

Why is day trading considered riskier than long-term trading?

I have read all of these disclaimers about day trading emphasizing how experienced and cautious you have to be. But I don't see how it's any different than buying a stock at a low price and holding on ...
46
votes
18answers
16k views

I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment?

I carelessly invested on stock on a spike (I have been persuaded by a family member) and now my investment value is really low, as you can see below. Is there anyway to salvage my investment for ...
43
votes
9answers
11k views

Why do stock prices of retailers not surge during the holidays?

My six-year-old (!) son asked me this question and I didn't have an answer, so I told him I'd get back to him. He asked why people don't buy a large number of shares of a company before the holiday ...
42
votes
12answers
24k views

Can the stock price go up even if no one is buying?

Let's assume there's this random company (XYZ)--that few are aware of--is selling stocks and they're doing really well. If their stock price is at $50 and no one is buying, will it still go up? Do ...
42
votes
13answers
31k views

One of my stocks dropped 40% in 2 days, how should I mentally approach this?

Right after the event, I felt shocked and depressed. I've been engaging in stocks for about a year now but I've never encountered such a big jump in such a short time. What I'm planning to do is just ...
42
votes
6answers
16k views

Can a CEO short his own company?

I'm just curious, it seems a CEO could make a lot of money by shorting a huge amount of shares on his company through a third party and then purposefully tanking the company before being fired. Surely ...
41
votes
4answers
11k views

How to profit off a stock price falling

How would one profit from a share price falling, granted that they correctly predicted it would happen? Say I had a hunch that a certain stock was going to fall next week, how could I effectively ...
41
votes
9answers
20k views

Why do people buy stocks that pay no dividend?

Before recently, Apple Inc. did not give dividend to shareholders. This makes me curious why people buy Apple Inc. stocks; while it might be due to the expectation of selling stocks at a higher price,...
40
votes
10answers
43k views

Options for dummies. Can you explain how puts & calls work, simply?

I never understood Puts or Calls. Could anybody explain it like I were a child?
40
votes
6answers
12k views

What stops management from just “compensating” themselves by taking all the stock in a company?

One of the odd things about a lot of modern companies is that the management, meaning the senior officers (CEO, CFO, CTO, etc) can pay themselves in stock. For example, Square's Jack Dorsey pays ...
39
votes
5answers
8k views

How to report $27 in cap gains affordably

I'm preparing my taxes using TurboTax's basic free tier. Last year I had $26.62 in realized long term capital gains. To report this using TurboTax, I need Premier, which is a $54 add on. Even in a ...
37
votes
7answers
10k views

Why is it rational to pay out a dividend?

Imagine a mature company, which has stable earnings and made a profit this year. The company is planing to pay out a part of this earnings to its shareholders. Assuming the stock price goes down ...
37
votes
3answers
9k views

Why does demand for stock rise when a company appears to have high future value?

So a company decides to raise money by selling shares of its stock. The stock is offered at an initial price of their determination. The stock is then traded in a market where forces of supply and ...
36
votes
5answers
7k views

Is trying to learn day trading a complete waste of time?

I understand there is a lot of people, maybe even most, who believe day trading is far too risky or the person trying day trading won't be skilled enough. I have gotten interested into investing ...
36
votes
9answers
17k views

Is it legal to “mine” dividends?

Dividends are paid to share holders based on ownership of shares before the “ex-dividends” date. Example: Stock A has an ex-date of July 1st Stock B has an ex-date of July 15th ...
36
votes
10answers
9k views

Should a high-school student invest their (relative meager) savings?

I am a high school student, I don't really have much money, between one and two grand in my savings account. However, I have friends who are investing in both penny stocks and stocks. I do not really ...
36
votes
4answers
9k views

What prevents stock prices from being artificially increased?

Let's say company FOO is trying to increase their $20 stock price. They agree to sell a share for $100. Of course, nobody buys. Now their buddy buys the share for $100. And maybe sells it back for ...
34
votes
4answers
63k views

When a stock price rises, does the company get more money?

When a stock price rises, does the company get more money?
33
votes
15answers
16k views

Why is the stock market so unpredictable?

Why is the stock market so unpredictable? If you think about it, most of the things we do in a day are pretty predictable. Waking up, deciding what sites to browse, etc. So if we have a good model ...
33
votes
5answers
16k views

Why are some listed companies so “cheap” in the market? What would happen if I use my money to buy 100% of its shares?

I noticed that some companies have only 100,000 market cap. And it's listed company that you can even buy its shares easily. The turnover rate is even > 100% which means it has enough liquidity. ...
33
votes
1answer
4k views

Dividend Payments - Am I entitled?

Suppose I own 100 stocks in a company listed on the LSE. I purchased these shares through an online broker some time around the 1st of November 2016. Looking up the dividend dates of the company using ...
32
votes
7answers
20k views

Bought stock at higher price than current price

I wanted to buy stock ABCD at a price of 880. The current price was 900. When I bought, I set 980 instead of 880 and it was fully executed. I don't understand how it is possible to buy stock at a ...
32
votes
5answers
6k views

ESPP--any reason not to go all in?

I'm just finishing up paying off my student loans (woohoo!) and am starting to look at places I can put my money to make it work for me. I've read Kobliner's Get a Financial Life and am interested in ...
32
votes
2answers
3k views

What happened to Home Depot's Stock in 1988?

I was exploring various stocks this morning on Google Finance, and I came across some strange behavior for Home Depot (HD) in 1988. For the entire year, the stock traded incredibly low, and at ...

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