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Does anyone understand the stock market?

*Gully Gull*
post 1.Mar.2007, 12:06 AM
Post #1


I have never amanged to understand the stock market.

For example:

- the markets will suddenly plunge with no warning, even to experienced traders.

- world markets plunge and US economic growth is revised from 3.5% to 2.2% - the Dow Jones goes **UP**

- when Ericsson issues an amazing report with record profits their shares go ... DOWN. But a few years ago when they issued some very mundane reports, their shares shot UP.

- and finally, most share markets just seem to more or less mimic whatever the Dow Jones does, give or take the odd day.

How does anyone make sense of this?
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Braderunner Rennuredarb
post 1.Mar.2007, 12:09 AM
Post #2
Location: Not in Sweden
Joined: 24.May.2005

That is why some make money playing it...and while others lose everything. If I told you the secret...then it would not be a secret! :wink:
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Mike
post 1.Mar.2007, 12:11 AM
Post #3
Joined: 14.Mar.2005

There are warnings. Plunges are cyclical, and the experts have been awaiting its arrival for quite some time.
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FR
post 1.Mar.2007, 12:12 AM
Post #4
Joined: 22.Oct.2005

QUOTE (Gully Gull)
I have never amanged to understand the stock market.

For example:

- the markets will suddenly plunge with no warning, even to experienced traders.

- world markets plunge and US economic growth is revised from 3.5% to 2.2% - the Dow Jones goes **UP**

- when Ericsson issues an amazing report with record profits their shares go ... DOWN. But a few years ago when they issued some very mundane reports, their shares shot UP.

- and finally, most share markets just seem to more or less mimic whatever the Dow Jones does, give or take the odd day.

How does anyone make sense of this?


1. There was warning. China decided to come down on illegal investing (borrowing money to invest), causing a downturn in the Chinese markets.

2. GDP revision was expected to be revised to 2.0, not 2.2. Because 2.2 is higher than 2.0, market goes up today as they had corrected to the 2.0 figure yesterday.

3. Profits reports are not the only driver of an individual stock's price.

4. Read a book called A Random Walk Down Wall Street.
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Mike
post 1.Mar.2007, 12:15 AM
Post #5
Joined: 14.Mar.2005

QUOTE (FR)
1. There was warning. China decided to come down on illegal investing (borrowing money to invest), causing a downturn in the Chinese markets.


Actually, it was Asian markets. The Chinese market wasn't disturbed.
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FR
post 1.Mar.2007, 12:19 AM
Post #6
Joined: 22.Oct.2005

QUOTE (Mike)
Actually, it was Asian markets. The Chinese market wasn't disturbed.


Link to/show us chart of yesterday's activity please.

ps I'm asking because I saw the disturbance.
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Ezpen The Caveman
post 1.Mar.2007, 12:36 AM
Post #7
Joined: 27.Oct.2005

laugh.gif
Not even stock traders understand the stockmarket...
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FR
post 1.Mar.2007, 01:01 AM
Post #8
Joined: 22.Oct.2005

They're an emotional bunch.
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sphincter
post 1.Mar.2007, 01:30 AM
Post #9
Joined: 26.Feb.2007

I am a stockbroker and I am willing to answer any questions you have.
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Ezpen The Caveman
post 1.Mar.2007, 01:37 AM
Post #10
Joined: 27.Oct.2005

Why are stockbrokers so emotional??
And why are you called Stock Brokers?
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sphincter
post 1.Mar.2007, 01:39 AM
Post #11
Joined: 26.Feb.2007

QUOTE (Mike)
Actually, it was Asian markets. The Chinese market wasn't disturbed.


Actually, it was the Chinese market that caused the ruckus.

The two main exchanes in China are Shanghai and Shenzhen, Shanghai being the more heavliy weighted (busiest).

As opposed to othe major exchanges, like London, NYSE, TSE, OSE, Simex, NASDAQ or CAC, the majority of the names issued on the Chinese exchanges are not available to foreign investors.
Now, what the Chinese lacks is transparency, in other words - they don't have a system in place that tracks who the shareholders are, so a lot of Triad money, as well as individuals that want to dodge taxes use the Chinese stock markets to launder money.

On Monday or Tuesday a rumour went around saying that the Chinese gov't was going to crack down on this practice, which spooked the market and triggered a big sell-off, that spread globally (the beauty of globalisation).

However, this was an artificial slump and it will recover shortly. If you want a tip, buy the Japan markets now. Not only will they recover, but it will reach pre 9/11 levels within 6 months.
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talktome
post 1.Mar.2007, 04:50 AM
Post #12
Joined: 13.Aug.2006

QUOTE (Gully Gull)
- the markets will suddenly plunge with no warning, even to experienced traders.


The undisputable fact is that NOBODY can predict the markets. The only thing that the stock market shows us is what has happened right up until this very instant in time. Anything else is just guessing...THAT is the secret that the many experts won't even admit to themselves.
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talktome
post 1.Mar.2007, 04:55 AM
Post #13
Joined: 13.Aug.2006

QUOTE (sphincter)
If you want a tip, buy the Japan markets now. Not only will they recover, but it will reach pre 9/11 levels within 6 months.


Oh yeah, he's a stock broker alright. Brokers fascilitate transactions and make money from commissions...buyer beware.
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sphincter
post 1.Mar.2007, 04:56 AM
Post #14
Joined: 26.Feb.2007

QUOTE (talktome)
Oh yeah, he's a stock broker alright. Brokers fascilitate transactions and make money from commissions...buyer beware.


What's wrong with trying to make an honest living?
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talktome
post 1.Mar.2007, 05:07 AM
Post #15
Joined: 13.Aug.2006

QUOTE (sphincter)
However, this was an artificial slump and it will recover shortly. If you want a tip, buy the Japan markets now. Not only will they recover, but it will reach pre 9/11 levels within 6 months.


This is not 'honest' IMO.

Whilst I agree with you to an extent about the 'artificial slump', no one knows. Like a typical salesperson you state all of this as if it's a foregone conclusion and you use your profession to add weight to your opinions.

Demonstrate how you have made money consistently, year on year, for the last ten years...in good times and bad, and I'll withdraw my statement. Otherwise, it remains, BUYER BEWARE...do your own research.
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