Fri, Apr 24, 2009
Apple, which just announced stellar earnings and astronomical iPhone growth is down in today’s trading. Microsoft, which just reported a drop in revenue for the first time in 23 years, is currently up $1.57.
Well the stock brokers don’t think like that. They don’t buy stocks because a company is doing good. They buy stocks in order to make money in the future.
If a (large) company is doing bad, then that’s a nice opportunity to buy some, because they’ll probably do better in the future. Hence a small “bump” because a large amount of brokers decide to get on the cheap train. And vice versa for when a company is doing good. A lot of brokers might decide that this company is doing so good that it’s unlikely it’ll keep up. Then they sell to cash in and hence a small dip.
The losers are the common people who buy because they read that company A is doing good, and sell when they hear that company B is doing bad. They’re making someone else very rich.
My 2¢ anyway
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