? about owning IB Stock

[Sky123987]

I bought IB stock and I've noticed the ups and downs of the stock.

IB stock (IBRK) seems to go up when the mkt goes up and down when the mkt goes down. I really don't understand why this stock is correlated w/ the mkt. I don't see any relationship between trading volume and where the mkt is going, so why does IB follow the mkt?

Thoughts?

 

[KrispyKreme50]

The majority of stocks go up on an up day and vice versa. Beta determines how much faster or slow it moves in relation with the market.

 

[Sky123987]

if the stock price reflects how much the company earns. How would bad news in the market place affect how much they earn?

 

[BoyPlunger]

stock price does not reflect how much a company earns.

 

[Sky123987]

net present value of earnings then

 

[5yrtrader]

Quote from Sky123987:

net present value of earnings then

If thats true then all stocks would have the same P/E ratio

 

[Sky123987]

Quote from 5yrtrader:

If thats true then all stocks would have the same P/E ratio

yes yes yes, iknow the price is also a function of the expected growth.

I wish we could focus on the point @ hand. Why does IB stock follow the mkt??????????????????????????????????

 

[5yrtrader]

Because you are assuming that everything is based off fundamentals. The market is made up of emotional human beings, a large portion of the stock price is what people feel about the stock.