Does Apple prove that the stock market can be a total joke?
- Thread starter ChkitOut
- Start date
A company's stock is just like a house. It's worth exactly what someone is willing to pay for it "today". You might think your house is worth 500k because of the schools, the views, the new roof, blah, blah, blah. But actually, it's only worth what someone is willing to pay for it right now. If that's 100k, then your house is worth 100k, not 500k. Same with a stock. Regardless of it's book value, it's cash on hand, it's intrinsic value and all that crap, at the end of the day, the current price is the right price. As the old saying goes, when a trade takes place, two people come together and agree on price and disagree on value.
i understand that and agree with you. my entire point is how can the 1000's of traders and investors agree that apple is worth 700 billion and then 4 short months later think its worth 400 billion.
thats obscene and shows how unintelligent and uninformed market really is, its not efficient or any of that crap. if anybody thinks the market is efficient after a solid, mature, mainstream company like apple can lose the equivalent of the most valuable companies in the world (300 billion, not that many out there) then they are nuts. plain nuts. this basically blew the efficient market hypothesis right out of the water.
ps. i actually just googled apple effecient market and at least someone agrees with me.
http://www.businessinsider.com/jeff...unked-the-efficient-markets-hypothesis-2013-3
Quote from ChkitOut:
i understand that and agree with you. my entire point is how can the 1000's of traders and investors agree that apple is worth 700 billion and then 4 short months later think its worth 400 billion.
thats obscene and shows how unintelligent and uninformed market really is, its not efficient or any of that crap. if anybody thinks the market is efficient after a solid, mature, mainstream company like apple can lose the equivalent of the most valuable companies in the world (300 billion, not that many out there) then they are nuts. plain nuts. this basically blew the efficient market hypothesis right out of the water.
ps. i actually just googled apple effecient market and at least someone agrees with me.
http://www.businessinsider.com/jeff...unked-the-efficient-markets-hypothesis-2013-3
No, that's not what happened. Thousands of traders agreed on "price" and "disagreed" on value. Who do you think sold the shares at 700? People who thought AAPL was worth a lot less. This is what people have a hard time with in the market. Price and value are NOT the same thing.
i dont understand. when i say traders agree on value, of course a trader may think apple is severely overvalued but im speaking 'collectively', since the market is a collection of traders then its not important what any 1 trader thinks and is offering at 700.
if i can sell 10,000 shares of apple at 700, its not like im making risk free money because i think apple is overvalued. the market is telling me at the moment, this is apple value. so sell all you want, this is what it is for now.
I think this only works on an extremely short term basis, and then you can still get your head handed to you on a regular basis.
I like Denise Shull's book, where she talks about how important it is to read the other guy. Enter the trade on impulse and you're dead. Take the split second to read what the other guy might do, and you have a chance. Do this to another degree and you have the odds in your favor.
AAPL is a piece of shit relative to the market right now. Why touch it on the long side?
(Sorry, not promoting. I just like her book. Not affiliated in any way.)
Yes and collectively half of them "sold" at 700. It doesn't matter if it was one guy named Larry or a million Larry's in retirement fund.
All transactions are in the "now". If you sell 10k shares at 700 it's because you believe right "now" it's a good sale. Someone is on the other side of that trade and they believe "now" is a good time to buy. One of you will be wrong. It's not that complicated.