1. Great Stock Market Stories
During the bull market, everybody is great because everyone is making a lot of money. But when the bear market comes, that’s when the men separate among the boys. Most people jump into the stock market when they hear stories from others that the stock market is high. It’s when the barbers, taxi drivers, your officemates are encouraged by somebody to invest in the stock market. They will say “Hey there are hotcakes in the stock market”. People talk about stocks when they make money and when you make money it simply means that the stock market is at its high. It creates the bull market, the excitement and most people make money within the day, hours or even minutes. People become greed and the stocks soar.
During the bull market, everybody is great because everyone is making a lot of money. But when the bear market comes, that’s when the men separate among the boys. Most people jump into the stock market when they hear stories from others that the stock market is high. It’s when the barbers, taxi drivers, your officemates are encouraged by somebody to invest in the stock market. They will say “Hey there are hotcakes in the stock market”. People talk about stocks when they make money and when you make money it simply means that the stock market is at its high. It creates the bull market, the excitement and most people make money within the day, hours or even minutes. People become greed and the stocks soar.2. Force Majeure or Acts of God
Japan Tsunami/Earthquake. Japan stocks went down by as much as 14% in one day. And that 14% is worth a staggering $500 billion. It was wiped out from their economy. The effect is being felt in the Philippines also. I just bought Nickel Asia on the 1st week of March because it has growth potential. It's income is 400% bigger than the previous year. It launched its IPO only last year. Nickel prices are rising and the commodity is in demand all over the world. All of sudden, tsunami struck and one of the customers of Nickel Asia has temporarily shutdown its operations. This customer comprises 30% of Nickel Asia and also owns 2% of its shares. The impact on the profit is enormous. Nickel Asia revenues will slid down and they will scramble to find a new customer which is most probably in China, a growing country. Whew! It's share price is now going down as an effect of that events.3. US Unemployment
The unemployed people in US is a good barometer whether the stocks will rise sooner or later. Unemployed people in US normally can claim food stubs from the US government. These food stubs are numbered and measured by the government. If the people claiming food stubs are down, it means some people got a job and that business is picking up. If the people claiming food stubs increases, it means a lot of people got terminated or fired because of poor economic conditions. During poor economic conditions, the revenues of the Companies normally goes down and in some instances they go bankrupt. Since our economy is partially dependent on the economic conditions of America, the stock prices goes down when US Economy is down. Why is this? The big investors goes out of the stock market in the US as well as in other parts of the world including Philippines and invest in other areas like bonds, interest rates, currency, futures, options, etc.
The unemployed people in US is a good barometer whether the stocks will rise sooner or later. Unemployed people in US normally can claim food stubs from the US government. These food stubs are numbered and measured by the government. If the people claiming food stubs are down, it means some people got a job and that business is picking up. If the people claiming food stubs increases, it means a lot of people got terminated or fired because of poor economic conditions. During poor economic conditions, the revenues of the Companies normally goes down and in some instances they go bankrupt. Since our economy is partially dependent on the economic conditions of America, the stock prices goes down when US Economy is down. Why is this? The big investors goes out of the stock market in the US as well as in other parts of the world including Philippines and invest in other areas like bonds, interest rates, currency, futures, options, etc.4. Interest Rates
When the interest rate is high, the investor would normally pull out his investment in the stock and put it in the bank. Example, if the interest rate in the bank is 5% and returns on investment in your stock market is averaging 10%, you will let your money stay in the stock market. However, if the interest rate in the bank goes up to 8%, of course you will pull out your money in the stock market and put it in the bank because the difference in return is 2% only. Interest earned in banks are fixed while returns of investment in stock is volatile. 5. Political Unstability
When President Aquino took over as the main driver of our country, the investors suddenly flocked in our country. The stock market goes up breaking all previous high records. The investors are looking for a sense of control and certainty in a country before jumping in. For example, if I am a global investor and is looking for a country to invest, do you think I will consider investing in Libya, Iraq, Afghanistan and other war torn country? Of course not! My money will be in trouble especially if the head of the government is nothing but a crook.6. Analysts Opinions
I remember when Duestche Bank lowered its rating on SCC shares from BUY to HOLD, SCC shares goes down dramatically. Since Duestche Bank is managing the wealth of high net worh individuals and corporations around the world, these individuals suddenly dumped their shares of SCC. Since there are many sellers than buyers in SCC shares, its share price went down. Likewise with Citiseconline, when the recommendation changes from HOLD to BUY, the stock price normally goes up because there will be more buyers for that stock price than the sellers, thus the share price goes up.7. Company Performance
No comments:
Post a Comment