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| You Wrote, Your Guide Answered! Hear what people are asking on Investing for Beginners | |||||||||||
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| Edition Four
A Comment from a Reader: Josh seems you are misleading people with this one: "A trader, on the other hand, is one who buys
a company because he expects the stock to jump in price, at which point they
will quickly dump it and move on to their next target.
Because it is not tied to the economics of a company, but rather chance and
human emotion, trading is a form of gambling that has earned its reputation
as a money maker because of the few success stories [they never tell you
about the millionaire who lost it all on his next bet... traders, like
gamblers, have a very poor memory when it comes to how much they have
lost.]" Response
The economics of a company don't affect the
stock price? What if people stopped drinking coke? How long do you think
the Coca-Cola stock would remain at its current price?
Although stock price is not tied to financial
fundamentals over short periods of time, it is irrevocably tied to a
company's balance sheet in the long run. At the end of the day, the only
thing that matters is how much money the business made.
"In the short term, markets are voting
machines. In the long-term, weighing machines." - Benjamin Graham.
Cordially,
Joshua Kennon
Investing for Beginners
Question: What is a Thrift Institution? Josh, I would like to know what a thrift
institution is. Can you help me? Suzanne D. Answer Suzanne, A thrift institution is essentially a bank or financial institution designed for the poor. They are very unstable and few have ever been successful as a business. Here's a short thesis paper on them: http://www.worldbank.org/html/dec/Publications/Workpapers/wps1540-abstract.html Hope this helps, Joshua Kennon
Question: Carl Ichan Hello, Answer Drew, Hope this helps, |
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