Not exactly. The price of gold has been up for the last week or two.porn_lover said:TSX is overweight commodities and resources. The fall in oil and gold prices has bought down all commodities stocks. Also financials are not helping either.
When the tide goes out, all ships decline.Why Not? said:Not exactly. The price of gold has been up for the last week or two.
The problem is that people and financial companies are going broke and need cash. Funds of all types, hedge, mutual etc. are experiencing massive redemptions. Investment banks are having huge losses. All of these force sales of stocks to generate cash flow. In such a forced situation you have to sell your good stuff, not the crap, to get cash. So we have the bizarre situation of companies who are profitable being hammered by investors who are either scared or desperate for cash or both. A lot of stocks are significantly undervalued right now.
.... You're right Radio_Shack - the real "terrorists" are the ones looking after our money - and the Head of them all is George W. Bush! They should be building more prisons in the US and hauling all of these assholes off to jail - George W., all of the Republicans, all of the CEO from the collapsed financial institutions, anyone who approved and signed money to someone purchasing a home who had no ability to pay in the first place, and all of the "bright whiz kids" who have all made a fortune off the regular working stiff! Crooks and criminals all of them - perhaps the odd public execution would be in order as well!Radio_Shack said:Stock markets are nothing more then a lotto at best. The prices move not on company performance but rumours and misinterpreted statistics. One minute they tell us to buy the blue chips stocks like banks cuz they are so rich in tradition bricks and mortor, next they telling us the banks can all go under cuz they fucked up how they invested our money. Who can you trust? Even when these companies fuck up the CEO and top dogs all walk away rich out of it.
Radio_Shack said:Stock markets are nothing more then a lotto at best. The prices move not on company performance but rumours and misinterpreted statistics. One minute they tell us to buy the blue chips stocks like banks cuz they are so rich in tradition bricks and mortor, next they telling us the banks can all go under cuz they fucked up how they invested our money. Who can you trust? Even when these companies fuck up the CEO and top dogs all walk away rich out of it.
......... granted - and with a whole host of unscrupulous people involved - i.e. anyone who approved and signed money to someone purchasing a home who had no ability to pay in the first place, there is also that added "risk" as well.JohnLarue said:Not quite
Over the long haul i a companies earnings/ cash flow / dividends grow so will the stock price. The market assigns a Price to earnings, Price to cash flow or yield to a stock. Example PE ratios 10 to 30 time earnings
If a company was producing $1.00 / share of earnings the market might pay say$15 / share
During turbulent times such as these the multiples contract & the market might only pay say $12 for every $ of earnings. Often these are great buying opportunities
If that same company is able to grow it earnings to say $ 5.00 / share you can bet your last dollar the market will pay more than $12 -15 / share
MacDonald's is a good example. It has grow its earnings, cash flow & today raised its dividend. It is up today & most recently made new all time highs (even during this nightmare market)
By the same logic if Rotten Ronnie's (MacDonald's) was to slow down its growth in earnings, cash flow & dividends, down gos the stock.
GE announced it is cutting its earnings forecast. it was sold off.
The forecast for oil , gold / minerals & banks have greatly decreased, so the TSX gets punished
IMO the stock market is not a lotto, instead it can be very rewarding for the patient and savvy investor who takes the time to do the homework & buy quality companies. The stock market can also be cruel and unforgiving to those who do not take the time to understand what they are investing their hard earned cash in& more importantly understand the risks involved in the market
