stock share business for beginners
This question is more interesting now. Looking forward to the response. Good educational stuff. Remember there is no right or wrong. Only reasoning based on probabilities.
Re: stock share business for beginners
Money market ki baat batai mujhai, mai phir kalma keh dungi! 
Re: stock share business for beginners
Very good.
Can you give the reason why you selected stock A?
because stock A earning per share is 10
Re: stock share business for beginners
Now let us assume both stock earn the same - 10 Rs per share. Everything else is the same. But Stock A sells for 50 Rs per share. And stock B for Rs 100 per share.
Which stock will you prefer to buy out of the two. (Of course you DON'T have to buy either, but play along).
Please state why you made your choice.
now i will buy stock B because its selling price is high
Re: stock share business for beginners
now i will buy stock B because its selling price is high
Since stocks A and b are identical why would you want to pay more?
If there are two identical gold rings one shop sells it for Rs 50 and other for Rs 100 which one will you buy
Remember what Mr. Slims posted - buy low, Sell high.
Another example - Why do you think people line up overnighy outside stores during Thanksgiving sales. So they can be first inside the store to pick up items on SALE. That is, an LCD screen which was selling for 10000 rupees may be marked down to 5000 rupees. They snap it up at 5000 rupees
Re: stock share business for beginners
Since stocks A and b are identical why would you want to pay more? If there are two identical gold rings one shop sells it for 50 and other for 100 which one will you buy
exactly
Re: stock share business for beginners
exactly
Thanks for your support, Mr. Hunt.
Re: stock share business for beginners
Absolutely right Southie, but what about money market exchange? How do currencies sell against each other? jane jaana!
Re: stock share business for beginners
I don't play the currency market. For me money market is simply where I keep the cash when I rebalance. So as stock mkt has gone up, the money mkt portion has seen an increase as some mutual funds and individual stocks were sold. Hope that answers your question.
Re: stock share business for beginners
because stock A earning per share is 10
And why would you not buy stock B? In other words why are you buying the stock with greater EPS
Re: stock share business for beginners
Since stocks A and b are identical why would you want to pay more? If there are two identical gold rings one shop sells it for Rs 50 and other for Rs 100 which one will you buy
Remember what Mr. Slims posted - buy low, Sell high.
Another example - Why do you think people line up overnighy outside stores during Thanksgiving sales. So they can be first inside the store to pick up items on SALE. That is, an LCD screen which was selling for 10000 rupees may be marked down to 5000 rupees. They snap it up at 5000 rupees
oh i took it in another way like i will sell them.so based n that point i replied B
Re: stock share business for beginners
oh i took it in another way like i will sell them.so based n that point i replied B
Ok. So far we have only talked about buying.
Again, just so I am sure you get it, explain in detail what stock you would buy and why. Please don't respond in ultra short sentences.
I also asked you why you would buy stock A with EPS of 10 (vs stock B with EPS of 5). Please give an explanation.
Re: stock share business for beginners
Just so I am clear - so far we have had two quizzes. For each quiz, please explain your selection.
For example
Quiz 1 - I chose stock a because it's EPS is 10. While stock B EPS is 5. I chose the one with higher EPS because .....
Quiz 2. I chose stock ?? Because it's price is ??. While other stock price is ??. And everything else being the same I prefer to buy the stock with a (lower of higher) price.
This way you focus your thoughts. And develop a rationale for your picks.
stock share business for beginners
Sometimes if the price to earning ratio is too low, it could spell trouble so do your research first.
Re: stock share business for beginners
Sometimes if the price to earning ratio is too low, it could spell trouble so do your research first.
Very true rizwanfareed.
In this hypothetical scenario, all other metrics are indentical.
The goal here is to simply provide significance of each metric - p to e p.to cash flow - operating, free, p to sales, debt to equity, net debt, competitive advantage, prospect for the specific industry, price to book, dividend yield etc.