Truthfully, I dont have time to read this whole thread, so hopefully this wasn't covered. The small buyers and sellers don't determine stock price. In the long-run, its the big money that could afford to buy a controlling interest in an entrerprise. Of course, if you could buy a controlling interest, you could change how company cash is allocated, and allocate more to your own pocket. So the big money competes with each other in the open market. If a company can put a $billion a year in your pocket from free cash flow, then the big money will price that company appropriately in the market IN THE LONG RUN. Why do you think Buffett is a billionaire? He'll buy a company for its free cash flow if it's cheap enough.
Investing Catechism
- Thread starter nitro
- Start date
pros and cons to everything ,
pros to dividend stocks
1- less volatility
2- more stability in the stock
cons to dividend stocks
1- not a 5x growth stock , large cap
the sweet spot for a div stock entry is when the market is down.
might be less stock appreciation then a non-div , but it'll be more reliable.
pros to dividend stocks
1- less volatility
2- more stability in the stock
cons to dividend stocks
1- not a 5x growth stock , large cap
the sweet spot for a div stock entry is when the market is down.
might be less stock appreciation then a non-div , but it'll be more reliable.
If you invest, I strongly suggest that you read this book:
"The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers"
Phil Rosenzweig (Author)
http://www.amazon.com/Halo-Effect-B...=sr_1_1?ie=UTF8&s=books&qid=1266780963&sr=8-1
You will see these gurus on financial TV that tout choosing a company based on success (momentum investing) in a new light, and it will ultimately make you a better investor.
It will also give you pause when you see business books that try to spoon feed you generalizations of perceptions of what works and what doesn't.
"The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers"
Phil Rosenzweig (Author)
http://www.amazon.com/Halo-Effect-B...=sr_1_1?ie=UTF8&s=books&qid=1266780963&sr=8-1
You will see these gurus on financial TV that tout choosing a company based on success (momentum investing) in a new light, and it will ultimately make you a better investor.
It will also give you pause when you see business books that try to spoon feed you generalizations of perceptions of what works and what doesn't.
Nitro, this book explain why you think only the good dividend stock is the good bet?
No, the logic is more basic. It has to do with more fundamental reasons to invest or not in a company, dividends or not. It deals with debunking generalizations being touted by financial analysts or "generic advice" business book writers as to why good management or bad management succeeds.
Browse through it. Well worth it.
Ok. So this book talk about why the some companys really grow, and is not management? Because bad management is successful too sometimes? I will look at this book. Thank you.
Not really.
Perhaps you have read or heard of the books "Built to Last", "In search of excellent" and "Good to great" or a slew of these in the business section of your local bookstore. All these books put forth some general theory as to why some management style and strategies work and not others. What the Phil Rosenzweig books says is that this is all a bunch of hooey, and goes on using logic and examples to debunk these theories. You will then consequently be able to run from some financial analyst when they tout good management or bad if backed by these theories.
You will see management of a company in a new light if you have been brainwashed by these generic theories. Even if you haven't, your critical thinking skills will improve.
Ok, but how do you know the company "management style and strategies" if you not work there in the company? I can look at stock price trend up or down, but that is all I see.
You understand my question?
Good question! That becomes part of your homework.
Every public company has an investment officer. You would be surprised how much you can learn from picking the phone or emailing these people.
Buffet says when he buys a company, he is buying more into the management/owners than almost anything else. You don't get first hand understanding the way Buffet does, but maybe you can get close.