Why Do People Buy Negative Earning Stocks?

tradingjournals · Jun 30, 2011

Why do individual investors buy negative earnings stocks (if they do buy them)?

Bowgett · Jun 30, 2011

I buy them for instance when company sells for half of its book value. Here is an example: if company loses $10M/quarter and owns 10 buildings for $1b each. You can buy it for $5b, right?

SnakeEYE · Jun 30, 2011

Quote from Bowgett:

I buy them for instance when company sells for half of its book value. Here is an example: if company loses $10M/quarter and owns 10 buildings for $1b each. You can buy it for $5b, right?

but you are not the first one in queue,right?

bone · Jun 30, 2011

So they can buy them cheap, and sell them even cheaper.

shortie · Jun 30, 2011

a company may be developing a product that will bring $$ down the road while burning cash at present. biotech stocks are a good example of this type.

deadbroke · Jun 30, 2011

Quote from tradingjournals:

Why do individual investors buy negative earnings stocks (if they do buy them)?

I thought you noo - I thought everybody noo - I thought wrong.

The answer is easy and is the answer than that drives all things market related.

E X P E C T A T I O N S

SnakeEYE · Jun 30, 2011

Quote from deadbroke:

E X P E C T A T I O N S

i`d understand if you said no

piezoe · Jun 30, 2011

Quote from tradingjournals:

Why do individual investors buy negative earnings stocks (if they do buy them)?

That's a really great question!

If you are trading intraday or very short term, then the answer is obvious: because they are going up.

But it's a really good question with regard to folks who buy this crap and hang on to it.

I'm sure you will get all sorts of rationalizations from folks who buy these stocks and hang on to them. But will those answers make any sense?

The only answer that I can think of off hand and that would make some sense would be "inside information."

deadbroke · Jul 1, 2011

Quote from SnakeEYE:

i`d understand if you said no

You keep hesitating, I already said, Yes.

It reminds me of this couple, both virgins on their wedding night.

Standing at each side of the bed, she says to him, "I offer you my honor"

He responds, "I honor your offer"

Nothing happened thereafter.

Lucrum · Jul 10, 2011

Quote from tradingjournals:

Why do individual investors buy negative earnings stocks (if they do buy them)?

Why do you keep asking stupid questions?