| There are so many website today containing | | | | many of which have nothing to do with the |
| stock market content, it's easy to get lost | | | | company: however, long term it always value |
| in a sea of information. It's time to cut | | | | the company according to it's earnings and |
| through the clutter and find out what really | | | | actual profitably. |
| makes the live stock market work and the | | | | |
| driving forces in play. | | | | Think about the craze and the 1929 stock |
| | | | market crash. This was again a situation |
| The first thing you have to realize about the | | | | where many analysts were telling people to |
| stock market content is that it's driven | | | | buy, and like a herd, they did. |
| largely by the actions of uneducated | | | | |
| investors. For instance, many people often | | | | Therefore, companies were selling for |
| times will purchase a stock based merely on | | | | astronomically high prices even though there |
| speculation that it is about to rise, or that | | | | was no profitability behind it. When people |
| oil prices are going up or down, etc. | | | | finally realized were no profits behind the |
| | | | madness, the businesses came crashing down. |
| Often times, these factors really have | | | | |
| nothing to do with the companies overall | | | | So what's the lesson in all this? Don't |
| profitability, and more to do with the | | | | follow the crowd. Instead, take the time to |
| economy as a whole. Unfortunately, uneducated | | | | educate yourself on how to read a companies' |
| investors will usually make their investment | | | | financial statements, and determine how |
| decisions based on how they perceive the | | | | profitable that particular company is. |
| economy to be doing, and not their particular | | | | |
| company. | | | | Only once you've determined this and made |
| | | | sure a company is a least reasonably |
| This is the primary reason for the market | | | | profitable should you even consider investing |
| crash in 1929 and it's the reason for every | | | | with that company. The most important factors |
| market downturn since. When uneducated | | | | to read up on for the company in question is |
| investors get into the market, they have a | | | | their profit margin, net profits, debt levels |
| tendency to act as a 'herd'. | | | | (obviously the lower the better), and |
| | | | probably most importantly, how long they have |
| In other words, when the financial analysts | | | | been turning a profit for. |
| are saying to buy, they all act as one and | | | | |
| often times buy, driving the stock market | | | | Very simply, if a company has only been |
| prices up even if a company isn't doing | | | | making money for the past two or three years, |
| particular well financially. Likewise, | | | | they probably are not a great company to |
| everybody could sell in a chain reaction to | | | | invest with, because they haven't proven they |
| some news pertaining to the economy as a | | | | can be profitable for the long term. Try to |
| whole that really doesn't have anything to do | | | | find companies that have exhibited good |
| with the particular company they are holding. | | | | profit levels for at least 10 years, and |
| | | | preferably longer. |
| In both scenarios, the stock market is either | | | | |
| severely over or under-valuing a particular | | | | Finally, the best places to find a stock |
| company, with little regard to its' actual | | | | market ticker and information is probably on |
| profitability. This is the nuts and bolts of | | | | the internet. You can get up to the minute |
| how the market works. | | | | stock information online, and it's becoming |
| | | | increasingly easy to invest your money online |
| Keep in mind: short term, the stock market | | | | as well. This, in a nutshell, describes the |
| tends to severely over or undervalue a | | | | stock market content and how you need to |
| company because of a number of factors, often | | | | direct your investing decisions. |