259 votes

Investment strategy for Google: What did I do wrong?

This is clearly not the answer you’re looking for, but you went wrong by trying to pick stocks and time the market. It’s been shown to be a fool’s game. Furthermore: if you picked several stocks, ...
  • 1,369
188 votes

If a stock doesn't pay dividends, then why is the stock worth anything?

It's important to remember what a share is. It's a tiny portion of ownership of a company. Let's pretend we're talking about shares in a manufacturing company. The company has one million shares on ...
  • 2,431
161 votes

If a stock doesn't pay dividends, then why is the stock worth anything?

Stephen's answer is the 100% correct one made with the common Economics assumption, that people are rational. A company that never has paid dividends, is still worth something to people because of ...
  • 4,209
118 votes
Accepted

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

The vast majority of people that day trade lose money. Of those that make money, most aren't going to beat an index fund. Of those that actually beat an index fund, very few do so without investing ...
103 votes

Why is the stock market so unpredictable?

The stock market measures how things change from what we predicted. If only things we predicted happened, the prices of stocks wouldn't really change. You might think, "But Apple went from a tiny ...
99 votes

Why aren’t there more stock market prediction tools available?

If one could build a model for accurately predicting future stock prices then: Why would anyone share it? Wouldn't there be some individuals cornering the market, making people like Peter Lynch, ...
98 votes
Accepted

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

You bought the stock at some point in the past. You must have had a reason for this purchase. Has the recent change in price changed the reason you bought the stock? You must assume your losses are ...
  • 973
89 votes
Accepted

Is it a good idea to copy a trader when investing?

The first thing that pops up when you open your link is a disclaimer: 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how ...
87 votes

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

Refresh the report. You'll probably see that dip gone. It was likely just a glitch in the reporting data when you happened to run it. Oddities like this happen from time to time. When you see ...
  • 13.8k
63 votes

Investment strategy for Google: What did I do wrong?

It's tech-heavy because I am a tech guy and I always feel comfortable investing in a tech company. First, no you do not feel comfortable. You invested in an incredibly volatile company in a volatile ...
  • 4,769
63 votes

Is it a good idea to copy a trader when investing?

Well, consider it from the other side. Why would a trader be willing to share trades? Consider the following scenario. The reference trader makes a trade in a low volume market. The trade is ...
  • 20.8k
57 votes

Why aren’t there more stock market prediction tools available?

These tools exist (see Nelson's answer), but they aren't available for purchase because once they become publicly available, they cease to work. The logic goes something like this. Suppose the stock ...
  • 2,604
53 votes

Can I profit from anticipating a drop in value?

To expand on the comment made by @NateEldredge, you're looking to take a short position. A short position essentially functions as follows: Borrow a share owned by someone else Sell that share Wait ...
  • 48.6k
48 votes
Accepted

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

Mild vs. Wild Randomness: Focusing on those Risks that Matter and A focus on the exceptions that prove the rule are copies of the original article referenced by the Wikipedia page. The authors are ...
44 votes

If a stock doesn't pay dividends, then why is the stock worth anything?

It seems to me that your main question here is about why a stock is worth anything at all, why it has any intrinsic value, and that the only way you could imagine a stock having value is if it pays a ...
  • 2,994
44 votes

Why is the stock market so unpredictable?

If you think about, most of the things we do in a day are pretty predictable. Really? Waking up, You never oversleep. deciding what sites to browse, Not sure how many people plan that in the ...
  • 11.4k
44 votes

Does the stock price drop if one of the largest shareholders of the company sells all their shares?

I'm not sure I would classify Musk's recent TSLA share transactions as "selling like a madman". For one thing his holdings are extensive and he's sold, so far at least, only a small ...
  • 3,203
41 votes

If a stock doesn't pay dividends, then why is the stock worth anything?

This is an excellent question, one that I've pondered before as well. Here's how I've reconciled it in my mind. Why should we agree that a stock is worth anything? After all, if I purchase a share of ...
  • 1,830
40 votes

Why can more jobs mean more inflation and decreased stock prices? What are other links in the chain to watch out for?

Many news outlets ... are reporting that the current US stock sell-off is due to a stronger-than-expected jobs report in January... Had the market done well in the last few days those same people ...
  • 46.4k
39 votes
Accepted

What happened to Home Depot's Stock in 1988?

It's got to be a bad chunk of data on Google. Yahoo finance does not show that anomaly for 1988, nor does the chart from Home Depot's investor relations site:
36 votes

Why do some investment firms publish their market predictions?

They do so because it’s free advertising. If they get it wildly wrong, it will be totally forgotten —- it’s not news when a prediction fails to come to pass. Unfortunately, it is often considered ...
  • 1,247
35 votes

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

Nassim Taleb is remarkably brilliant. It's his work that's cited in the article. In my opinion, there are 2 choices, a misquote, if the article is wrong, or a misunderstanding on the part of the ...
30 votes
Accepted

Why does selling and then rebuying stock not lead to free money?

You are misunderstanding what makes the price of a stock go up and down. Every time you sell a share of a stock, there is someone else that buys the stock. So it is not accurate to say that stock ...
29 votes

Why is AT&T's stock price declining, during the days that they announced the acquisition of Time Warner inc.?

It is not unusual for the acquiring company's stock to fall in any time of merger announcement. Some of it has to do with the fact the acquirer is going to either take on new debt to pay for the cost ...
29 votes
Accepted

How to interpret stock performance charts "vs S&P 500"

tl;dr: The CNN Money and Yahoo Finance charts are wildly inaccurate. The TD Ameritrade chart appears to be accurate and shows returns with reinvested dividends. Ignoring buggy data, CNN most likely ...
  • 661
25 votes

If a stock has only buyers and no sellers how does its price go up?

You are interpreting things wrong. Indian Infotech and Software Ltd (BOM:509051) clearly has volume and trades. The MoneyControl site says VOLUME 2,467,182 AVERAGE VOLUME 5-Day 3,387,212 10-...
  • 10.1k
25 votes
Accepted

Can a subsidiary/division of a company have a larger market cap than the parent company?

The market capitalization of Naspers is approximately 1.3 trillion ZAR, which is equivalent to approximately 75 billion EUR. The market capitalization of Prosus is approximately 130 billion EUR. If ...
  • 15.8k
24 votes

Investment strategy for Google: What did I do wrong?

Check your price to earnings ratios and your price to book ratios for each of your assets. It has been an upward ride, so "foolish" stocks like Alphabet tend to rise faster. I would begin to ...
  • 4,235
24 votes

Why aren’t there more stock market prediction tools available?

They exist, but it's not for you to buy. Here is a story about Ke Xu, quantitative analyst. Basically, the algorithms exist, but they are closely guarded secrets. Someone tried to steal them and got ...
  • 658
22 votes

How do you take profit from stock trading while keeping capital invested?

You don't have to sell just because the price has gone up 25%. You sell... if you need the money... because you think that the company share price will not be growing any more or even it will be ...

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