Thursday, August 11, 2011
Regarding how stocks rise and fall!?
A company that is traded publicly, and that is performing excellent, could in theory have it's stock not rise or go down just because no one buys it? I'm having trouble understanding the supply and demand concept of the stock market. The stock doesn't rise based directly on the businesses performance, but rather on a public opinion and awareness of the company. That just doesn't make sense. Who came up with this? Where does my money go? Where does it come from when I sell? Who decides the price? How do my shares constitute some sort of partial ownership, yet I don't profit based on the actual profitability of the business? In theory, a million people could hear a story about a company potentially performing well, and all buy stock, increasing the value, when in reality the company could suck. Is this all just based on a trust that our collective consciousness will prevail?
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