Stock questions?

Question

Like does the stock price go up when people buy the stock or is it when people buy products.

Answer 1

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Answer 2

People buy the products, then earnings are usually expected to go up if costs are less than revenues, then the stock becomes more valuable in anticipation of those future earnings,  then investors buy the stock and bid the price up.

Answer 3

Stock prices go up when people are willing to pay more for the stock. It is really supply and demand.

Now the question one should ask is this - When are people willing to pay more for a stock?

The answer is that people will pay more for a stock if they think the company will be more successful in the future. Companies that are more profitable will have generally have a greater return on investment.

Financial ratio's like the Price-Earnings ratio (P/E ratio), etc allow the public to analyze how good a purchase a stock might be. How good is the company today? How profitable will it be tommorrow? Does it have an experienced/seasoned/respected management team? What is its past growth rate? Will it be able to maintain similar growth?

Think of buying a stock as buying a part of a company. Think of the earnings per share (EPS) as the interest you make on the investment each year. The EPS times the number of stock you own in the company is the profit that YOUR part of the company is making. You can use the stock price and the EPS of past quarters and look at the stocks trend (growth rates/etc) to figure out how profitable the company will be for you.

In the short term stocks might go up and down based on unreal expectations. In the long term stocks tend to go up and down based on the profitaility of the company and its valuation (generally, not always).

Do stock prices go up when people buy stocks?

Generally yes. When supply is constant and demand increases, you will find that the stock is no longer available for buying (ie. the bid prices are below the ask prices). Now to increase supply you will have to increase the offering price for the stock.

Buying or selling massive percentages of a company's stock can influence its short term stock price. Over the long term though, the profitability of the company is the most accurate measure of determining the stock price.

Answer 4

people buy products

Answer 5

stock price go up according to the company's gain.