My wife seem to regard it make no sense buy a expensive stock. How do I explain to her that it doesnt matter
For example we have a discussion give or take a few apple and I needed to buy it at almost 130, but she didnt deduce it be a knowledgeable choice because of the giant price. So instead we settled for a lower priced stock and bought more shares. Is within anything in writing that I can show to her that breaks it down in dummy lingo. Its adjectives base on gain and not stock prices. I know some can be over or underneath valued, but thats a together different orb of wax. In my mind the stock price is irrevelant, its adjectives base on your total investment.
Answers:
Show her two hypothetical companies, respectively worth $100. Divide one company up into 10 shares, and once company up into 100 shares. Buy $10 of respectively company (one share of one company and 10 shares of the other).
Now increase the convenience of the companies to $150 respectively. Show her what happen to the share prices (they increase to $15 and $1.50), and your total investment in respectively company (up from $10 to $15, regardless of the price of the share).
I would suggest showing her the P/E ratio of two different stocks (one near dignified price, one beside lower) where on earth they own like peas in a pod P/E. This will give a hand her to infer she is buying returns and how the stock price alone can be disingenuous.
Good luck.
tell her to look at Berkshire Hathaway (BRK.A on theNYSE)
$112,900 per share. Market boater of $174 billion - run by Warren Buffett.
Cisco - CSCO - $30 per share - $177 billion souk cap
Sun Microsystems (SUNW) - $5.00 per share and a $17 billion souk cap
You can probably find more extreme examples of companies next to similar souk cap and broad range share prices... or find companies approaching Sun that own split their stock too frequently and presently are underneath $10 per share.
Makes no difference.
Well, the hypothesis is to buy low and flog glorious. You should look at the stock's chart, see what analysts hold to utter roughly speaking it, look at the industrial indicators (to see if it is overbought or oversold), and see what other products they enjoy surrounded by the pipeline to generate adjectives revenue. Also, what is the stock's price within comparison to their competitors?
You are right within the sense that a stock at $15 isn't necessarily better than a stock at $130. G00GLE is a well-mannered example of a stock that have a soaring cost per share a couple years ago, but have continued to progress up. However, that doesn't expect Apple will verbs to budge up. Again, do some research. Also, consider the overall robustness of the discount. If something happen and the cutback tank, relations won't be buying $600 iPhones.
Would you a bit own 100 small houses worth $10 million or a single Trump hotel beside 100 rooms worth $10 million?
Try to natter more roughly the total sum of money self invested short even worrying just about the number of shares. If she can't deduce that share price is completly irrelevant, you shouldn't even be chitchat in the order of # of shares beside her. Stick to $ invested and which companies 'look honourable' to both of you.
Tell her you are going to contribute her a currency offering:
She can chose between three envelopes, one containing one hundred $1.00 bills, one containing twenty $5.00 bills, or one containing five $20.00 bills. Which one does she want?
Why?
You are right, it make NO difference!
The ONLY difference beside a stock price is that more recurrently than not, a highly developed stock price indicates greater bazaar confidence. So a stock trading at $100 a share is FAR more promising to still be doing very well a year from immediately than one explicitly trading for $6 a share!
hmmm the bigger query here...
will victorious the arguement assistance your marrige? or is this one that should be silently won?
I'd buy the book "investments for dummies" and "learn" next to her the different ways valuation is calculated... pointing out that price of stock isn't one of the methods.
or.. if this be something i feel similar to argueing.i'd try to catch her to school me how she would settle on if a stock be expensive. is it P/e ratio? price to sale? price to book? share price? and urge her to final up her points as one valid methods...
ultimately at hand are heaps ways to deecide if a stock is expensive and different professionals own different methods.. but share price isn't one of them unless its surrounded by context of other things .. similar to sale or book appeal etc.
afraid i dont know of any TRUE thurough even so simple websites... but here's a start
http://en.wikipedia.org/wiki/stock_valua...
Clearly your wife have an belief as to what stock price is too glorious. You could, contained by those instances, buy the option instead at a much cheaper price. That instrument you'd detain the price move lacking holding the stock and also enjoy the alternative to buy the stock if you really considered necessary to at the price you select to some extent than at the souk.
I am thinking of investing in penny stocks.?
Why would you work surrounded by a wall?
No. of mutual fund companies within Indian & International souk??
Give me some information something like stock exchange?
Do u know any polite penny stocks (stocks that cost vastly little per share)?
Answers:
Show her two hypothetical companies, respectively worth $100. Divide one company up into 10 shares, and once company up into 100 shares. Buy $10 of respectively company (one share of one company and 10 shares of the other).
Now increase the convenience of the companies to $150 respectively. Show her what happen to the share prices (they increase to $15 and $1.50), and your total investment in respectively company (up from $10 to $15, regardless of the price of the share).
I would suggest showing her the P/E ratio of two different stocks (one near dignified price, one beside lower) where on earth they own like peas in a pod P/E. This will give a hand her to infer she is buying returns and how the stock price alone can be disingenuous.
Good luck.
tell her to look at Berkshire Hathaway (BRK.A on theNYSE)
$112,900 per share. Market boater of $174 billion - run by Warren Buffett.
Cisco - CSCO - $30 per share - $177 billion souk cap
Sun Microsystems (SUNW) - $5.00 per share and a $17 billion souk cap
You can probably find more extreme examples of companies next to similar souk cap and broad range share prices... or find companies approaching Sun that own split their stock too frequently and presently are underneath $10 per share.
Makes no difference.
Well, the hypothesis is to buy low and flog glorious. You should look at the stock's chart, see what analysts hold to utter roughly speaking it, look at the industrial indicators (to see if it is overbought or oversold), and see what other products they enjoy surrounded by the pipeline to generate adjectives revenue. Also, what is the stock's price within comparison to their competitors?
You are right within the sense that a stock at $15 isn't necessarily better than a stock at $130. G00GLE is a well-mannered example of a stock that have a soaring cost per share a couple years ago, but have continued to progress up. However, that doesn't expect Apple will verbs to budge up. Again, do some research. Also, consider the overall robustness of the discount. If something happen and the cutback tank, relations won't be buying $600 iPhones.
Would you a bit own 100 small houses worth $10 million or a single Trump hotel beside 100 rooms worth $10 million?
Try to natter more roughly the total sum of money self invested short even worrying just about the number of shares. If she can't deduce that share price is completly irrelevant, you shouldn't even be chitchat in the order of # of shares beside her. Stick to $ invested and which companies 'look honourable' to both of you.
Tell her you are going to contribute her a currency offering:
She can chose between three envelopes, one containing one hundred $1.00 bills, one containing twenty $5.00 bills, or one containing five $20.00 bills. Which one does she want?
Why?
You are right, it make NO difference!
The ONLY difference beside a stock price is that more recurrently than not, a highly developed stock price indicates greater bazaar confidence. So a stock trading at $100 a share is FAR more promising to still be doing very well a year from immediately than one explicitly trading for $6 a share!
hmmm the bigger query here...
will victorious the arguement assistance your marrige? or is this one that should be silently won?
I'd buy the book "investments for dummies" and "learn" next to her the different ways valuation is calculated... pointing out that price of stock isn't one of the methods.
or.. if this be something i feel similar to argueing.i'd try to catch her to school me how she would settle on if a stock be expensive. is it P/e ratio? price to sale? price to book? share price? and urge her to final up her points as one valid methods...
ultimately at hand are heaps ways to deecide if a stock is expensive and different professionals own different methods.. but share price isn't one of them unless its surrounded by context of other things .. similar to sale or book appeal etc.
afraid i dont know of any TRUE thurough even so simple websites... but here's a start
http://en.wikipedia.org/wiki/stock_valua...
Clearly your wife have an belief as to what stock price is too glorious. You could, contained by those instances, buy the option instead at a much cheaper price. That instrument you'd detain the price move lacking holding the stock and also enjoy the alternative to buy the stock if you really considered necessary to at the price you select to some extent than at the souk.