3 ms·

At the end of the day, securities pricing is based on supply/demand for the security. Predicting precise sales numbers isn't that important, stock prices move

At the end of the day, securities pricing is based on supply/demand for the security. Predicting precise sales numbers isn't that important, stock prices move based on a plethora of other factors. How many times have we seen a company out-perform expectations and then the stock plummet, or a company under-perform and rally? It's cool that they're able to do this but it's not that big of a deal...

xwowsersx 7y ago
Of course stocks moved based on supply/demand, but there are drivers and catalysts which bring the marginal buyer/seller out to play. So I don't think saying that stocks moved based on supply/demand is adding anything really. If you're suggesting that all equities price changes are meaningless, that is simply not the case. If you're not suggesting that, my apologies, but the way you phrased it reminds me of something I often hear which seems to be a popular misunderstanding (and embraced in much of academia).
axlee 7y ago
> How many times have we seen a company out-perform expectations and then the stock plummet, or a company under-perform and rally? Far, far, far less than a company's stock surging after a good quarterly, a great product launch or tanking after a bad earnings report. You are nitpicking. Yes, outliers and "irrational" market reactions exist, but there is an obvious arbitrage opportunity in deriving accurate sales numbers or other indices before the market gets its hand on them.
- AznHisoka 7y ago
  It is uncommon for a company to outperform expectations and plummet but very common for it to simply not react or dip slightly. Thus making it hard to make any serious money if you can predict outperformance However it is more common for a stock to tank if it misses expectations. If you can predict underperformance, you can make some serious bank.

3 ms·

At the end of the day, securities pricing is based on supply/demand for the security. Predicting precise sales numbers isn't that important, stock prices move

by Mikeb85 7y ago

xwowsersx 7y ago
Of course stocks moved based on supply/demand, but there are drivers and catalysts which bring the marginal buyer/seller out to play. So I don't think saying that stocks moved based on supply/demand is adding anything really. If you're suggesting that all equities price changes are meaningless, that is simply not the case. If you're not suggesting that, my apologies, but the way you phrased it reminds me of something I often hear which seems to be a popular misunderstanding (and embraced in much of academia).
axlee 7y ago
> How many times have we seen a company out-perform expectations and then the stock plummet, or a company under-perform and rally? Far, far, far less than a company's stock surging after a good quarterly, a great product launch or tanking after a bad earnings report. You are nitpicking. Yes, outliers and "irrational" market reactions exist, but there is an obvious arbitrage opportunity in deriving accurate sales numbers or other indices before the market gets its hand on them.
- AznHisoka 7y ago
  It is uncommon for a company to outperform expectations and plummet but very common for it to simply not react or dip slightly. Thus making it hard to make any serious money if you can predict outperformance However it is more common for a stock to tank if it misses expectations. If you can predict underperformance, you can make some serious bank.