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Ack! Can someone explain how stocks work??

slipgate
Look at this...

http://www.thestreet.com/_myway/markets/analystsactions/10336303_2.html

Google (GOOG - Cramer's Take - Stockpickr - Rating) numbers raised at Jefferies: GOOG numbers raised at Jefferies. 2007 EPS estimates increased to $14.66 from $14.59. Raised target price to $600 from $520. Reiterates Buy rating.

Google price target increased at Goldman: Goldman is raising its target on GOOG to $620 from $595 based on expected upward revisions to revenue/earnings and continued demand for search and display advertising that should benefit from better inventory (YouTube) and content agreements with Sony, MTV, and Warner Music. Maintained Buy rating.

Then explain this...

Last Change Day's Range Volume
483.01 -18.49 -3.69% 482.69 - 506.01 14,280,717

Everyone upgrades yet the price drops 4%!!!
http://finance.myway.com/jsp/qt/full.jsp?symbol_search_text=GOOG
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Comments

13 comments

Date Votes
  • ripley16
    It's easy..

    they go up--you buy,

    they go down--you lose money,

    stock broker makes money.
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  • elkoholic
    quote:Originally posted by slipgate
    Look at this...

    http://www.thestreet.com/_myway/markets/analystsactions/10336303_2.html

    Google (GOOG - Cramer's Take - Stockpickr - Rating) numbers raised at Jefferies: GOOG numbers raised at Jefferies. 2007 EPS estimates increased to $14.66 from $14.59. Raised target price to $600 from $520. Reiterates Buy rating.

    Google price target increased at Goldman: Goldman is raising its target on GOOG to $620 from $595 based on expected upward revisions to revenue/earnings and continued demand for search and display advertising that should benefit from better inventory (YouTube) and content agreements with Sony, MTV, and Warner Music. Maintained Buy rating.

    Then explain this...

    Last Change Day's Range Volume
    483.01 -18.49 -3.69% 482.69 - 506.01 14,280,717

    Everyone upgrades yet the price drops 4%!!!
    http://finance.myway.com/jsp/qt/full.jsp?symbol_search_text=GOOG


    EPS is earnings per share..check out this link it has a good working definition...
    http://stocks.about.com/od/evaluatingstocks/a/eps1.htm

    Last is the EPS at the close yesterday.
    Change is the Change from yesterdays close in $ and %.
    Day's Range is the variation of EPS throughout the trading day.
    Volume is the number of shares that changed hands that day.


    As for the price drop...it happens fairly frequently after you see the analysts start pushing something. Not sure why..just more reactionary buying and selling by investors who feel like they are waiting for the other shoe to drop.
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  • Dak To 68
    Just off the ticker.
    Elevators are up, escalators are down, and envelopes remain stationery.

    Seriously, to get a reasonably good picture of how the stock market works you need to spend quite a bit of time in the appropriate classes, or do quite a bit of personal research on the subject. It's not really simple, it's one of those endeavors that people who spend their lives working at say it's an ongoing learning process.
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  • jbc23060
    Many try, but few succeed. As Ripley so elloquently stated, the only people who consistantly make money in stocks are the brokers and even THEY have their moments. Put your money in a mutual fund. Misery loves company.
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  • He Dog
    The average small investor sees stocks going up, maybe setting records and buys in. When the market takes a "correction," he panics and sells low losing money. The best way is to buy when stocks are low, be patient, and sell when they are high. When stock prices are way up and going higher, the only one that will make money on your purchase is the broker.
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  • 11b6r
    Think it was WC Fields that said "I have all my money in stocks and bonds- silk stockings, and bonded whiskey".
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  • HAIRY
    quote:Originally posted by ripley16
    It's easy..

    they go up--you buy,

    they go down--you lose money,

    stock broker makes money.
    Well, two out of three ain't so bad. [:D]
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  • Grasshopper
    Cramer can take a flying F for all I care.. Scam artist,,,Believe me if someone is that good he doesn't need to be on the tube, blabbing his mouth pretending to be the next coming of Christ... Do your own D.D. and go from there.. Very hard game for the little investor....imo..nambu
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  • tccox
    It is very simple, buy high, sell low. I have made an art form out of this kind of investing. Tom
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  • nards444
    get a broker.
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  • dlrjj
    Google beat the analyst's projections, but not by as much as they have in the past. When you deal with a speculative investment like Google the perception of the future is everything. There were quite a few investors who were disappointed in the size of the margin between projections and the actual report. Speculative investors are extremely fickle, just look at what oil did over the last year or so. If you are expecting the returns to beat the projections by 20% and they only beat the projections by 5 or 10%, you end up being disappointed and the stock takes a drop.[:)]

    BTW, that price is nearly a 50 PE Ratio. There are lots of different opinions, but generally PE's of 1 to 6 or so are higher risk, 8 to 25 or so are investment grade, and 30 - infinity are speculative issues. Those are guidelines, not rules, but they work for a starting point. If you don't like those numbers pick your own, but 50 is definitely speculative. That's only 2% earnings on market value, so you're totally depending on future growth.
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  • FrancF
    quote:Ack! Can someone explain how stocks work??

    Bank stocks- Buy @little price-

    BIG banks Eat little banks, hang onto stocks for 15 years+ and triple value. Ask me how I know[:D]
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  • danlittle
    If you feel lucky & want to play in the stock market, then Hedge Cattle, you can make SEVERAL Thousand dollars in just a few hours or you can lose in just a few minutes.
    Lets say you open your account with $50,000.oo dollars & you lose $10,000.oo in a day , you will get a call to update your account [pay the difference back to org. amount by wire transfer} on the other hand you can withdraw your earning right away.
    I have a good friend that made well over a Million in less than a month, & lost it all the following momth.
    Good Luck
    Dan
    Personally I buy cattle on futures contracts
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