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Stock price is mostly a matter of public opinion, and often diverges wildly from fact.

batbomb 12y ago
...often diverges wildly from fact What is it called when somebody writes a book titled "The Decline and Fall of [company still around]"
- astrodust 12y ago
  Blackberry is technically still around.
Crito 12y ago
If IBMs stock price were nothing more than uninformed public opinion, then it would have been plummeting for what, the past decade? Most non-technical people don't know IBM still exists (they nearly entirely disappeared from the general public's view when they stopped making consumer products); and most people in the trendy half of the tech industry seem to think that IBM is not long for this world.
- VLM 12y ago
  Its a speculators market so applying logic is a fools errand. None the less, if you buy IBM you're trading a very liquid $185 cash for a very liquid share with tradition of paying a quarterly dividend around $1. Thats an equivalent interest rate "yield" of 2.40% or so. My local credit union is only paying 1.44% on a similar long term-ish investment. Its not completely worthless, but its being milked like a cash cow not treated like a tech company. The PE ratio is like "ten" compared to googles "thirty" or facebook which off the top of my head is like "a hundred". Comparing the yield of this dead horse to a company that actually matters like Caterpillar or XOM its about the same, around 2.5%. Of course .gov guarantees return of my capital from my credit union, but who knows what'll happen in the market WRT IBM, so it should return a bit more. CAT and XOM are actually worth something as a going concern. IBM, well... So.. rate of return below real world inflation rate, no prospects for growth, no one in the market expects future growth (not paying a high price now for earnings later). Doomed. Maybe google or apple will buy them for pennies on the dollar? IBM has patents...
WalterBright 12y ago
If you're good at determining when the public is wrong about the stock price, you can make a quick fortune by going long or short on those stocks.
- pessimizer 12y ago
  Unless the incorrect opinion of the herd sustains a day past your margin call.
  - xxs 12y ago
    One of the first lessons to learn is to cut your losses early and let your profits ripe.
  - WalterBright 12y ago
    A short sale doesn't have an expiration date. And you don't get margin calls if you're not buying on margin.
    - pessimizer 12y ago
      A short sale doesn't have a limit to how much you can lose, either. I'm sure you get my point.
      - WalterBright 12y ago
        If you're sure the market has a stock overvalued, how can you lose?
        pessimizer 12y ago
        Again, by running out of money before the market comes to its senses. I'm not sure what's confusing about this.
    - bronson 12y ago
      The expriation date of a short sale is the day the interest and fees required to carry the transaction drives you to bankruptcy. Depending on your solvency and leverage, that's either close by or eons away away but it is real.

...often diverges wildly from fact What is it called when somebody writes a book titled "The Decline and Fall of [company still around]"

astrodust 12y ago
Blackberry is technically still around.

Crito 12y ago

If IBMs stock price were nothing more than uninformed public opinion, then it would have been plummeting for what, the past decade? Most non-technical people don't know IBM still exists (they nearly entirely disappeared from the general public's view when they stopped making consumer products); and most people in the trendy half of the tech industry seem to think that IBM is not long for this world.

VLM 12y ago
Its a speculators market so applying logic is a fools errand. None the less, if you buy IBM you're trading a very liquid $185 cash for a very liquid share with tradition of paying a quarterly dividend around $1. Thats an equivalent interest rate "yield" of 2.40% or so. My local credit union is only paying 1.44% on a similar long term-ish investment. Its not completely worthless, but its being milked like a cash cow not treated like a tech company. The PE ratio is like "ten" compared to googles "thirty" or facebook which off the top of my head is like "a hundred". Comparing the yield of this dead horse to a company that actually matters like Caterpillar or XOM its about the same, around 2.5%. Of course .gov guarantees return of my capital from my credit union, but who knows what'll happen in the market WRT IBM, so it should return a bit more. CAT and XOM are actually worth something as a going concern. IBM, well... So.. rate of return below real world inflation rate, no prospects for growth, no one in the market expects future growth (not paying a high price now for earnings later). Doomed. Maybe google or apple will buy them for pennies on the dollar? IBM has patents...

WalterBright 12y ago

If you're good at determining when the public is wrong about the stock price, you can make a quick fortune by going long or short on those stocks.

pessimizer 12y ago
Unless the incorrect opinion of the herd sustains a day past your margin call.
- xxs 12y ago
  One of the first lessons to learn is to cut your losses early and let your profits ripe.
- WalterBright 12y ago
  A short sale doesn't have an expiration date. And you don't get margin calls if you're not buying on margin.
  - pessimizer 12y ago
    A short sale doesn't have a limit to how much you can lose, either. I'm sure you get my point.
    - WalterBright 12y ago
      If you're sure the market has a stock overvalued, how can you lose?
      - pessimizer 12y ago
        Again, by running out of money before the market comes to its senses. I'm not sure what's confusing about this.
  - bronson 12y ago
    The expriation date of a short sale is the day the interest and fees required to carry the transaction drives you to bankruptcy. Depending on your solvency and leverage, that's either close by or eons away away but it is real.