I am a financial noob. I wonder what are some intrinsic value of stocks. While purchasing a stock, I expect that the price of it will go up, and I'll sell it to gain the price difference. However, the price is determined by the mass, which also applies to currencies or such. If no one wants the stock tomorrow, its price will be zero. What, then, contributes to the price of stocks, other than the expectation for the price to grow?
4319
I read somewhere that companies are not required to pay dividends to shareholders (this is correct, yes?).   If so, then if company A never pays dividends to its shareholders, then what is the point of owning company A's stock? Surely the right to one vote for company A's Board can't be that valuable.   What is it that I'm missing?
75186
Suppose I buy 100 shares of Apple at $200 and I want to increase the share price. If I sell 1 share at $210, and at the same time log in to buy the share at $210, will the share price increase to $210 so that I can sell all my shares at $210?
101029
I am trying to understand how the US stock market works. From my understanding, there is one stock exchange where a company is &quot;listed&quot;. This stock exchange listing requires the company to adhere to the regulations of the stock exchange where it is listed. Once a company is &quot;listed&quot;, its shares can start to trade on any stock exchange. For example, once a company lists on NASDAQ, its shares can be traded on NASDAQ, NYSE, Boston Stock Exchange, Philadelphia Stock Exchange, National Stock Exchange, EDGX Exchange, EDGA Exchange, NYSE Arca, etc. Is my understanding correct? Is it true that once a stock is listed on a US stock exchange, the stock can then trade on any US stock exchange? Consider the Level 2 quotes for Microsoft (NASDAQ: MSFT). Microsoft is only listed on NASDAQ, but it also trades on the NYSE and other stock exchanges:  My questions are:  Does this mean that companies only need to be listed on one stock exchange in order for their stock to trade on other stock exchanges?  If so, do companies need to adhere to the &quot;listing requirements&quot; of all the stock exchanges where their stock is traded, even though they are not &quot;listed&quot; on those stock exchanges? Does Microsoft have to follow the listing requirements of the NYSE even though it is not listed there?  If stocks can trade on any US stock exchange regardless of which US stock exchange the stock is listed on, why don't NYSE-listed companies reduce their yearly listing fees by listing on NASDAQ instead?
36805
For example, if the ex-dividend date is next Monday, and I buy the stock on next Monday, would I get the dividend? Or would the person who sold the stock to me get the dividend?
38350
For stocks, I can easily look at the price/earnings ratio, and, according to The Intelligent Investor, stand clear of those with a ratio higher than 20.  How can I tell if the current price of an ETF is a good price to buy it? Are there such simple metrics?
48349
From , page 209:     Dividends   Dividends are income paid by investments. Both bond funds   and stocks can  pay dividends. Bond fund dividends (the interest paid   by the individual  bonds in a fund) tend to be higher (as a percentage   of the amount you have  invested in a fund). When a dividend   distribution is made, you can receive  it as cash (which is good if   you need money to live on) or reinvest it into  more shares in the   fund. In either case, the share price of the fund drops to  offset the   payout. So if you’re hoping to strike it rich by buying into a bunch    of funds just before their dividends are paid, don’t bother. You’ll   just end up  paying more in income taxes.    It is talking about mutual funds.   I've never played with stocks.  However, I would like to know more about it.  Does the bold text imply the stock price will drop because of a company giving out a dividend?
48409
First, my understanding is that the long-term capital gains tax rate is 0% for those whose marginal rate on ordinary income is 10% or 15%, and (ignoring the highest 39.6% bracket) the rate is 15% for everyone else. (See  and .)  My interest is in what happens at the crucial break between the 15% and 25% bracket, which is $73,800 for married/joint returns in 2013 (and presumably will be higher in 2014, though I haven't been able to find out what that is or if it has even been set yet). Let's say a household has $64,000 in wage income, and sells stock for a $10,000 profit.   Does their income for the purposes of establishing their tax bracket go to $74,000? If so, is the entire $10,000 profit subject to the 15% long-term capital gains rate? Is any part of the wage income subject to the higher marginal tax rate?   Since the amount of income subject to the higher marginal rate is, well, marginal, part 3 seems somewhat less important than part 2. The real issue is whether the capital gains rate hits the entire profit, since, in that case, it seems the household should only sell enough stock to generate a $9000 profit, and sell the remainder in a future year.
44252
Why does a stock price suddenly drop for no reason? There is no bad news coming out, the S and P 500 is going up. My stock dropped by 4% today. Should I be concerned there is some bad news that I don't know coming out soon?  Edit: The company is Chemours Company ticker code:CC.  Thanks for your help!
26652
I swing trade equity options every once in a while for fun. This morning I witnessed something I do not understand at all.  In the attached photo, why would someone purchase 6 contracts for .05 at $76.  I just can't wrap my head around this!    Scenario:   Underlying Asset: RY.TSX  Current Price: $71.70 Days to expiry: 4 Days     EDIT: It happened again the next day with 74, see new table with headers as per request:   My only reason for asking is because RY.TSX is the Royal Bank of Canada, this stock will not move multiple dollars in 3 days(expiry in this scenario).  Why buy 10 @ 74 for .04 each instead of just buying 10 @73 for .04 which would have gone through.  If you do the math(excluding commissions): .04 * 100(shares in a contract) * 10 contracts = $40 Stock moves to 74 and they are in the money lets say for .20 .20*100*10 = $200  I just don't see the reward as 99% of the time you will lose this wager, it is just not worth it even if it does happen once in a blue moon.  I can think of much better things to do with $40.  For the skeptics another screen shot to actually confirm this order:
63930
A company has made an application for new Ordinary Shares. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares. Also the company issues Ordinary Shares in respect of the satisfaction of the initial tranche of deferred consideration for an acquisition to vendors at a strike price of 12.5 per Ordinary Share.   My understanding is that the above mentioned sellers bought the new issued shares at the price of 12.5. However the market price at the time was 8.37. Could you please explain what happened here as it is not likely that one will buy shares at a much higher price than one can buy on market.
48557
I don't really know how to anticipate the changes in an option's price.  If I have an call set to expire the following Friday at $10 above the current share price, I know in the absence of other changes it loses value with each day that passes getting closer to its expiration. (Talking about American options.) But it gains value as the share price gets closer to the strike price.  So, if two days pass but the stock goes up $3, would the option have gained value or lost value? Is there any way to calculate this?
9808
When I place my trade order in the stock exchanges, I know the price matching happens and only when there is a buyer and seller at the same price a trade happens.   But how does the quantity matching happen? For example, if I want to buy 1000 shares at $100, but there is only one seller to sell 10 shares at $100, what happens then?
58933
Let's suppose one sells an asset for a $200,000 profit after holding it for 10 year but then immediately sinks the entire sale price into another asset. Is one still expected to pay the capital gains tax? What cash is one expected to pay the taxes from? How do tax liabilities work in this scenario?
30945
I use the quotations because generally the people touting these the most (John Bogle) are also ones selling the index funds. Being biased doesn't mean they're wrong, but it does mean they may not be telling the whole truth.   I understand the idea that index funds are better than managed accounts. Lower fees, probably better returns, etc. etc., but generally when this topic is discussed those are the only two options considered as if they were the only investment options out there. I also agree that they probably make a lot more sense as "fire and forget" type investments for people to invest as passively as at all possible.   But are investment funds really all that much better than just buying stocks for long term investing? Index fund fees may be incredibly low, but they're still yearly fees. Whereas with a stock you can (in theory) purchase a significant ownership stake in a company for $5 and it will cost you another $5 to divest. (Oversimplification, I know.)  Also major index funds may represent a more diverse investment, also in theory, but take for instance the S&amp;P500 where 50 companies make up about half the market cap.  Why would it not make more sense to invest in a handful of these heavyweights instead of also having to carry the weight of the other 450 (some of which are mostly just baggage)?  Even Warren Buffet has been touting the index fund for a while now, but I haven't heard that Berkshire Hathaway has major holdings in an S&amp;P500 index fund. So it seems like there's more to the story.   Where do you think the tipping point really is here?  Edit: had to be away from the computer most of the day. Don't mean to insinuate at all that index funds are bad. Just questioning whether they're the right call for someone willing to be active enough to check their investments a few times a year.   Edit2: Just because it seems like some people may still be misunderstanding me... the comparison that this entire question revolves around is long-term, mostly passive invesments in companies rather than almost all the eggs in the index fund basket. This may be a better way to think about it rather than my question of picking stocks... ie: "[PickaCompany] has historically done pretty well, their business models seems pretty good, people like their product, I expect them to continue making profit for a while, they have a large customer base and a good share of the market in their industry, they seem like a good investment." Oversimplification by far, but it's generally these things that put companies in index funds and at the top.
29706
Suppose you buy stocks from company FOOBAR at price X. After a while, the price is Y = X * 1.25, so you decide you want to collect that 25% profit. You sell the stocks, cashing out your original X plus a 25% profit. Yay! You made money. But haven't you also put yourself out of the trading business by not having stocks anymore? If you just want to take profit but also continue investing, you collect the 25% and you are back to having just X to invest. Now stocks from FOOBAR are too expensive for you (current value is Y). What do you do? Do you select another cheaper (pontentially worse) stock just to be able to buy it? You wait until FOOBAR price is X again? (losing time and also maybe the stock is not as attractive now?). Does this mean stocks are mainly for the long-term-collect-once type of investment? How do short/middle term traders make money, without falling in a diminishing returns type of situation? Thanks!
28299
When I look at my Google finance page, and I look at a company, lets say Citigroup for example, and I see that the market cap is 83.45 billion, what does that mean?  Does that mean Stock Price X Number of shares outstanding?  Because if so, that doesn't add up.  Also, by issuing more shares of a stock, does a company affect their market cap?
111380
I have read in many personal finance books that stocks are a great investment for the long term, because on average they go up 5-7% every year. This has been true for the last 100 years for the S&amp;P500 index, but is there reason to believe this trend will continue indefinitely into the future?  Look at other markets. The  trades much lower today than the same day 10 years ago, and the  has not grown for the last 20 years. Is the standard assumption of 5-7% growth true only for American stocks?  Can we expect the trend for the S&amp;P500 to continue? The last 100 years have been a period of economic prosperity for the US, so it's no surprise that stocks have done so well, but is economic prosperity required for such stock growth?