What is a Commodity? A commodity as it is defined in the financial markets is a physical good that is considered the same as all other goods of that same commodity classification. For example: cattle is a commodity. One cow … Continue reading
Short Answer Buying stock in the company you work for is usually but not always a bad idea. Emotional Objectivity You have to evaluate the prospects/value of the company. If you work there, you will be sucked up in the … Continue reading
Definition of Shorting The usual ways of thinking about stocks or commodities is that you buy them at a given price and then you later sell it. Shorting reverses that process. When you short something you borrow the stock or … Continue reading
Overview The market was essentially flat this month. For the quarter, everybody made money. Brexit and the Stock Market The market this month gave me an obvious topic for this newsletter. Fear. Or more specifically stark raving panic. The UK … Continue reading
Short Answer As an investment strategy, day trading is theoretically junk. Random Walk Theory Stock movements for short periods of time are completely random. The drunk staggering left and right from a light pole. There is no pattern. The “random walk theory” has … Continue reading
What is Fundamental Analysis? Fundamental Analysis is a way that people attempt to find how much a company is worth. They then try to buy the stock when the market price is below the actual value of the company. They … Continue reading
Short Answer: No, that is not a valid reason to leave the stock market. Market Timing is Impossible: You know the stock market has declined, you don’t know what it will do next. You do not know when there will be a massive correction. It may … Continue reading
What is a Stock Market Crash? The stock market declines or advances on a regular basis. Some of these swings back and forth are large. A market crash refers to major decline in stock prices. It happens every few years. The market … Continue reading
It is true that stocks have a higher expected rate of return over long periods. It is not true for each period. Stocks will sometimes do better and sometimes worse than bonds. The fluctuation is risk. If bonds are steady … Continue reading
Predicting future stock prices is theoretically impossible. The market is essentially efficient, meaning that all publicly available information is almost instantly reflected in the stock price. Anything you read or study about the company can not be used to predict. … Continue reading