Man, investors are a fickle crowd

[Argo]

Economy is recovering, job report is better than expected, yet the stocks go down because they're afraid interest rates will be raised. If the job report was negative, the stocks would still fall in price because people would be afraid for the economy.

Why can't people just invest and have some faith in stock prices going up in the long term.

 

[BCYL]

Yes! People should invest more money, make stocks go up so I can make some money!

 

[Zenmervolt]

They do have faith in the price going up. But when interest rates change, the market premium increases. Since the required rate of return goes up and the future value of the stock remains the same, the present value has to drop in order to ensure that the rate of return increases.

For example: Future value is expected to be $11. The current required return is 10%. Stock price will be $10. If the required rate of return goes up, then the current price has to go down because the expected future value does not change. This is a severely simplified example, but it's a very good basic explanation.

ZV

 

[DaveSimmons]

Actually Monday would be a great day to buy more stocks/funds before they bounce back up again.

I need to send another check off to Schwab to get more S&P500 fund shares while the getting is good

 

[rh71]

Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

 

[Zenmervolt]

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

 

[brigden]

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

The market perpetuates itself. It second guesses itself constantly. Mere speculation is enough to cause turmoil.

The market is fickle.

I like beer.

 

[Hector13]

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

please... seasoned wall st. vets have no idea how to "value stocks properly". There is no way a "freshly graduated" finance major will be know "how the market works".

I mean no offense by this -- it is just a simple truth. Same way that no weatherman knows for sure what the weather will be next week (and, if you ask me, predicting the weather is much easier than predicting the stock market).

 

[rh71]

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

 

[Zenmervolt]

Originally posted by: Hector13

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

please... seasoned wall st. vets have no idea how to "value stocks properly". There is no way a "freshly graduated" finance major will be know "how the market works".

I mean no offense by this -- it is just a simple truth. Same way that no weatherman knows for sure what the weather will be next week (and, if you ask me, predicting the weather is much easier than predicting the stock market).

You read a hell of a lot more into my post than there was.

Seasoned experts absolutely know how to value stocks properly. So do freshly graduated students. However, not all the variables can be predicted properly in the real world. I can't predict tomorrow's stock price because there is new information coming out every day. I absolutely can tell you if today's close price is within the proper range given the company's current long-term outlook and this is what I meant by valuing a stock properly.

As for knowing how the market works, no-one knows all the clockwork bits, you're correct. However, it is not hard to see that the market reacts predictably to certain stimuli. While the precise relationships may not always be completely understood, it's easy to understand the basic principles behind why prices rise or fall after certain market stimuli. My example earlier explaining why prices drop when interest rates rise is perfect illustration of this, and it's based on a freshman level understanding of the market.

Have you studied Finance? If not, you have no basis for the claims you're making. If you have, then you're clearing mistaking me for someone making far stronger claims than I am actually making.

ZV

 

[gopunk]

Originally posted by: rh71

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

 

[Zenmervolt]

Originally posted by: gopunk

Originally posted by: rh71

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Only a fool sticks to the minimum requirements.

ZV

 

[Orsorum]

Originally posted by: Zenmervolt

Originally posted by: gopunk

Originally posted by: rh71

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Only a fool sticks to the minimum requirements.

ZV

Wow, all y'all just come in here itching for a fight, eh?

 

[Orsorum]

Originally posted by: rh71That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

Please elaborate on what you mean by an interest in finance being unhealthy?

 

[Orsorum]

Originally posted by: gopunk
you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Could a CS student do so?

 

[rh71]

Originally posted by: Orsorum

Originally posted by: rh71That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

Please elaborate on what you mean by an interest in finance being unhealthy?

You can choose to do anything in the world with your course of study and you choose money. If you're obsessed over money, that can't be a good thing... because if you somehow struck it rich with the knowledge you gained from reading and studying, you wouldn't be here... why not do something more practical with your life ? Honest question.

Seems many finance majors just worry about making the money... making wise choices in creating income... spending their efforts in being frugal about other things... I read the book... Millionaire Next Door... describes how multi-millionaires are the most frugal people in the world driving non-exotic cars and wearing common clothes... there's nothing wrong with that, but why spend the effort when you can't even enjoy it ? And even so - by the time you can reap the benefits after years of 80 hour work weeks, you've already got gray hair. I laughed at that book. They can have their money.

 

[Orsorum]

Originally posted by: Hector13
please... seasoned wall st. vets have no idea how to "value stocks properly". There is no way a "freshly graduated" finance major will be know "how the market works".

I mean no offense by this -- it is just a simple truth. Same way that no weatherman knows for sure what the weather will be next week (and, if you ask me, predicting the weather is much easier than predicting the stock market).

/me nods hello to Hector and to Aaron

I would say that Aaron made some comments that were taken more strongly than they should have been. Most people with a background in finance (or economics, for that matter) can make reasonable predictions about the turn the market will taken given a certain stimulus - e.g. interest rates change, over the next few months we can expect most stock prices to change opposite to the direction of the interest rate change. No one can predict the daily or even weekly movements, of course.

Of course, we economists are just confused.

 

[Orsorum]

Originally posted by: rh71
You can choose to do anything in the world with your course of study and you choose money. If you're obsessed over money, that can't be a good thing... because if you somehow struck it rich with the knowledge you gained from reading and studying, you wouldn't be here... why not do something more practical with your life ? Honest question.

... I've met very few people who were obsessed about "money", even amongst finance and economics majors. I think your viewpoint is myopic, at best.

You can say the same thing about any field - if Gopunk was really good at CS, why doesn't he go invent some new algorithm and sell his research and retire off the royalties? Why is he still studying CS, or why does anyone else study anything at a university?

People will always have questions about how to prepare for the future, and how to save and invest for that future; likewise corporations will always need competent people to manage their finances, determine worthwhile investments, etc. The market is an extraordinarily complex organism, and without people who study finance it's often near impossible to make even basic decisions wisely.

The people who go into finance wanting to strike it rich by some magical investment strategy most often go into marketing instead - ever heard of Richard Kiyosaki? Anyone who goes into finance thinking that's what he'll do is in for a sore disappointment.

 

[petejk]

hahahah....sound like you got burned today...

i'm pretty much a pure technical trader...made 4 bills today.....
i'm a really short term/day trader and totally milked the market today....

anyway...i wish my $$ could settle quicker...so I can buy
all the stuff that is gonna be on sale this monday...shootz..

anyway...best luck to your investments....
if you're truly investing...one bad day shouldn't hurt at all
because you are investing for the long run.

 

[Michael]

Finance has been good to me.

I like my job and have done well. I'm not obsessed with money, not even close.

I know lots of theories on stock valuation, but then fact is that a stock is worth what someone is willing to pay for it.

How they decide what to pay for it is up to them.

Michael

My trip next week

 

[Dacalo]

The stock is legalized mass gambling.

It is irrational.

 

[gopunk]

Originally posted by: Zenmervolt

Originally posted by: gopunk

Originally posted by: rh71

Originally posted by: Zenmervolt

Originally posted by: rh71
Money is overrated. Honestly. I see finance people (majors, etc. who come into the real world) crying over the smallest thing... I mean... most of us work to live, not live to work.

This Finance major (freshly graduated) just wants a wife and kids and a little old farmhouse in the middle of nowhere, thankyouverymuch.

Just because we understand how the market works and know why certain things make current prices fall doesn't mean that we live and die by it. We just understand how to value stocks properly.

ZV

That's all well and good, but you could've gotten that knowledge in $3.00 worth of late charges at the public library (I like that line) instead of going to school for 4+ years for it. Obviously you have more interest than how the market can go up and down... and I personally feel it's unhealthy. Just my opinion about finance people in general... no offense to any particular people, including my fiancee.

you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Only a fool sticks to the minimum requirements.

ZV

i know, i was just replying to his comment

 

[dmcowen674]

Originally posted by: Dacalo
The stock is legalized mass gambling.

It is irrational.

Not to worry, The Rich Boys have made their money with this game.

 

[gopunk]

Originally posted by: Orsorum

Originally posted by: gopunk
you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Could a CS student do so?

yes

it's entirely possible to get a good grade and still be unmarketeable

 

[Orsorum]

Originally posted by: gopunk

Originally posted by: Orsorum

Originally posted by: gopunk
you can get just about any knowledge contained in the minimum requirements for a bachelors just from self-study.

Could a CS student do so?

yes

it's entirely possible to get a good grade and still be unmarketeable

I'm not exactly sure what point you're trying to make. Are you saying that a bachelor's degree isn't valuable or that it is? Or that it's not necessarily a predictor of performance?