WTF is up with the market..
- Thread starter aaronk321
- Start date
Go look at some split's track records.
Of course logic tells you that 1/2 of a $20 is 2 $10s.
I get free $$ from splits every time I buy them. Of course, I research them very carefully before I buy them, but most stocks split because they are doing well and are going up anyway. NOT always.
BUT, post split, every dollar that the NEW price goes up, you have DOUBLED your profit on your PURCHASE price. Get it?
My last free $$ was EMR 2:1 (11/7/06 split) - Sold Jan, XTXI 3:1 (9/11/06) - Sold Jan.
Did I make money? I made nearly $10 per share of my original shares (because for every dollar your 2:1 SPLIT goes up, your original purchased shares went up $2 - XTXI did a 3:1 split) for holding an average of 2 months. Go chart them.
Haven't been very interested in any splits after the new year cept for GROW, because I had been watching for that split since Nov.
Splits do NOT always make $$... you still have to understand the underlying stock. But a lot more people are willing to buy a $30 stock than a $60 stock, so while it's the same # of shares, the $30 stock has a better chance of going up faster.
If you think that post and pre split stocks are the same, you are reading too many books/articles trying to teach you how to lose money in the stock market.
As for GROW, do I think it will go UP now? Nope, but it might in 2 months. GROW is a funny thing, because it's a mutual fund company... it's a high risk stock.
If stocks do well, more people invest, so mutual funds make more profit. If stocks do poorly, the seller of stock are among the first to tank.
If we don't see a strong bear market before the summer... GROW will make a lot of money. In times of uncertainty, GROW won't do as well. Of course, I'd have sold well before that.
That's the problem with telling people about the stock you own, unless you keep a running journal, you can't tell someone WHEN you sell.
And the whole key to the market is WHEN you buy and WHEN you sell. Anyone who tells you different is a fool who's busy losing his ass or had a very bad year.
Of course logic tells you that 1/2 of a $20 is 2 $10s.
I get free $$ from splits every time I buy them. Of course, I research them very carefully before I buy them, but most stocks split because they are doing well and are going up anyway. NOT always.
BUT, post split, every dollar that the NEW price goes up, you have DOUBLED your profit on your PURCHASE price. Get it?
My last free $$ was EMR 2:1 (11/7/06 split) - Sold Jan, XTXI 3:1 (9/11/06) - Sold Jan.
Did I make money? I made nearly $10 per share of my original shares (because for every dollar your 2:1 SPLIT goes up, your original purchased shares went up $2 - XTXI did a 3:1 split) for holding an average of 2 months. Go chart them.
Haven't been very interested in any splits after the new year cept for GROW, because I had been watching for that split since Nov.
Splits do NOT always make $$... you still have to understand the underlying stock. But a lot more people are willing to buy a $30 stock than a $60 stock, so while it's the same # of shares, the $30 stock has a better chance of going up faster.
If you think that post and pre split stocks are the same, you are reading too many books/articles trying to teach you how to lose money in the stock market.
As for GROW, do I think it will go UP now? Nope, but it might in 2 months. GROW is a funny thing, because it's a mutual fund company... it's a high risk stock.
If stocks do well, more people invest, so mutual funds make more profit. If stocks do poorly, the seller of stock are among the first to tank.
If we don't see a strong bear market before the summer... GROW will make a lot of money. In times of uncertainty, GROW won't do as well. Of course, I'd have sold well before that.
That's the problem with telling people about the stock you own, unless you keep a running journal, you can't tell someone WHEN you sell.
And the whole key to the market is WHEN you buy and WHEN you sell. Anyone who tells you different is a fool who's busy losing his ass or had a very bad year.
Nobody has brought up April 2001, when the INDU droped just around 600 points only to rally back near unchanged. However, this market the crack in the Wall of the BULL.
I belive this is something closer to what we saw last week.
Yesterday's rally had a very small % of stocks up over 1 buck or more.
Today's was a very weak "50" something point run.
Im very bearish at the moment.
I belive this is something closer to what we saw last week.
Yesterday's rally had a very small % of stocks up over 1 buck or more.
Today's was a very weak "50" something point run.
Im very bearish at the moment.
You are not making it clear how this is supposed to work. How do you figure that every dollar the pps goes up you make double your money? If you have 1000 shares and it splits 2:1 you know have 2000 shares but those dollar moves the stock used to make are now 50 cent moves. You are assuming that the stock will continue to trade as it did before the split. Didn't work out so well for some, like PGR and their 4 for 1 split. I'd say that sometimes this works out favorably, but over what time frame must one wait for results?
If I buy a theoretical stock for $10 and it splits, now I have 2 $5 stocks.
Total cost = $10
Total value of stock = $10
If that $5 stock goes up $1, and I have 2
Total cost = $10
Total value of that stock = $12
If the stock never split, and it goes up $1 I have
Total value of stock = $11
Every dollar earned on the split = double the $$ earned on your principal.
You got your math backwards.
However, what I think you are trying to say is, IF the stock moves up $1 post split, it would only move up $.50 pre-split.
That would assume that the market was logical. It is not.
How do you think Microsoft got its billions of market cap (still double that of Google, despite it's lowly $27/per share)? When each share got really expensive, it split, and MORE people bought than before.
Let me ask you how comfortable you are buying shares of Berkshire Hathaway A (BRK .A) at $107,998 each? The 'usual' 100 lots is $10,799,800. Well, I don't have any. I wouldn't put that many eggs in 1 basket. And it moves up a big $120 at a time. Stable, but sort of pathetic (unless you count yields). It stays stable because few can afford it, and those few generally don't pay attention to the market and let it ride. Berkshire rarely has to panic sell to cover investor withdrawals.
Contrast this with penny stocks... look at the price actions, they can quadruple in a day on ANY news... you can be wiped out in hours playing them.
The higher priced your stock, the fewer people want to buy it because most people want to buy in round 100 lots. It makes for lower volatility on that stock as well as presumably you have less speculation. Good for Berkshire, bad for fast money.
The cheaper the price, the more 'affordable'. This is human psychology. Of course there are exceptions, like Google, but that's because goog is the flavor of the moment.
Therefore, when the stock is cheaper, the price tends to move more. Add to that the REASONS a stock splits (good news, anticipating faster growth, don't want their stock to be priced out of reach for many investors), and you have a nice combo.
This isn't always true as I said before. Crappy stocks try to split to bank on the split mythos too... so without strong research, you can still lose your butt... and as you pointed out... 2x faster
.
I am not teaching anything, this was just random commentary. What works for me, may not work for you, so don't pay attention to my rambling please.
Total cost = $10
Total value of stock = $10
If that $5 stock goes up $1, and I have 2
Total cost = $10
Total value of that stock = $12
If the stock never split, and it goes up $1 I have
Total value of stock = $11
Every dollar earned on the split = double the $$ earned on your principal.
You got your math backwards.
However, what I think you are trying to say is, IF the stock moves up $1 post split, it would only move up $.50 pre-split.
That would assume that the market was logical. It is not.
How do you think Microsoft got its billions of market cap (still double that of Google, despite it's lowly $27/per share)? When each share got really expensive, it split, and MORE people bought than before.
Let me ask you how comfortable you are buying shares of Berkshire Hathaway A (BRK .A) at $107,998 each? The 'usual' 100 lots is $10,799,800. Well, I don't have any. I wouldn't put that many eggs in 1 basket. And it moves up a big $120 at a time. Stable, but sort of pathetic (unless you count yields). It stays stable because few can afford it, and those few generally don't pay attention to the market and let it ride. Berkshire rarely has to panic sell to cover investor withdrawals.
Contrast this with penny stocks... look at the price actions, they can quadruple in a day on ANY news... you can be wiped out in hours playing them.
The higher priced your stock, the fewer people want to buy it because most people want to buy in round 100 lots. It makes for lower volatility on that stock as well as presumably you have less speculation. Good for Berkshire, bad for fast money.
The cheaper the price, the more 'affordable'. This is human psychology. Of course there are exceptions, like Google, but that's because goog is the flavor of the moment.
Therefore, when the stock is cheaper, the price tends to move more. Add to that the REASONS a stock splits (good news, anticipating faster growth, don't want their stock to be priced out of reach for many investors), and you have a nice combo.
This isn't always true as I said before. Crappy stocks try to split to bank on the split mythos too... so without strong research, you can still lose your butt... and as you pointed out... 2x faster
. I am not teaching anything, this was just random commentary. What works for me, may not work for you, so don't pay attention to my rambling please.