oh its a well established fact that share prices change every few seconds, but I was drawing attention to this to make a point. logic is based on beginning with the obvious,
say you go into Tescos, people say buy butter, that purchasing is completely erratic. 10 minutes go by none bought, next minute 3 people buy etc. total chaos, but the price DOESNT CHANGE FOR MONTHS!
so just because products change hands continually erratically doesnt mean the price must change continually. Marks and Spencers exchange rates are constant for the entire day. You can shop around and return to the unchanged rate. house prices also can remain unchanged for quite some time, even a year. interest rates also stay constant for ages.
there is something STRANGE about the stock exchange.
when you say people buy to sell or sell to buy, the more mercenary people such as myself do this, but that is to evade the inevitable retractions or stalling.
but it all depends, eg I have one share where I buy and hold BECAUSE the spread is 4%.
buy-sell-rebuy would lose 8% on the spread, and 8% is equivalent to a modest rocketing. it took months before I was in profit because of the spread, but now its one of my best ever investments. the price does retract but its difficult to judge right, and some of the seasoned traders have misjudged by waiting for the price to go down an extra pence and instead the price rocketing. this particular share is ranked below 1500th on the stock exchange. Its difficult also to sell at highs, as these are very brief and at unpredictable prices.
but a lot of people entirely buy just the one company, and they buy to hold. the way many here buy ONLY RMG. often they have a personal association with the company.
I have so many shares, I have to count them, right now 12. I am thinking of gradually selling out every share once the profit is reasonable because the talk of the biggest ever crash in history on american mailing lists is ever louder. on one list they say the police are bankrupt in some parts of america, the US is becoming like the USSR in 1989 where the state no longer functioned properly.
@princeofdarkness the FT100 shares are very problematic, the 4 I bought on Wednesday are all ranked below 600. Honestly aside from some exceptional cases such as RMG, you should avoid the FT100 like the plague. the great thing about low ranking shares is the funds arent interested. The main hazard is to evade boiler room scams and hype, but you can usually infer that a company is for real, eg if they appoint someone from some high ranking company. I am pondering putting a 10% limit sell order. for the moment I buy and sell manually, my entire portfolio is experimental. IMHO you shouldnt hold FT100 shares indefinitely, because they always have unpleasant corrections.
note that its in euros, so unless its to pay the GLS fine, it must be for expansion in europe.
this will lead to a big increase in the company, and thereby the share value, so its definitely a good long term investment, and must eventually rocket. when a market saturates, floated companies expand overseas instead.
reverse psychology is a very powerful form of metalevel inference, and is particularly powerful for the stock exchange. one of the rocket shares I bought on Wednesday is already more than 13% in profit, yesterday it was in negative territory. Reverse psychology is just the process of discerning a probable motive for some action, and then figuring the probable effect that is being engineered, and then making an action of your own to exploit the effect. its about building a cart because you think someone will give you a horse, and the 13% I made today is testimony that it works.
I sold out recently from RMG, but you bought 5000 quid at 4.6105, with a commission of 6 quid, that would be 1077 shares costing 4996.33 on Friday 18th July. those shares are now worth 4743.57, so you have lost 252.76 quid in 1 week, which is 36.11 quid a day, why didnt you wait and buy today? an easy 252.76 quid!
you talk of the dividends, but at 4.6105, the existing dividend of 13.3p is 2.885%, needs to be above 6% to interest me.
Now I think you'll make healthy profits from the share price.
and I am not averse to micro-economics etc, but I need to see an explanation with an example trade, where I can study and see if it works, ie a paper trade done now, and say a timewindow and or limit sell price. until you give such an argument, I remain unconvinced. You can explain your Gordon model if you want, I hope its not a Gordon Brown figurine.
as regards tea leaves, that is divination, I dont use divination but divination does work, its the harnessing of the subconscious externally. religion + prayer are also divination, and are no better/worse than tea leaves. both are based on externalising the subconscious mind and both work. I dont use these because I prefer eg reverse psychology,
with a speculative topic, you have to change your opinion as new facts emerge! DUH! Central banks and IMF change opinions all the time!
If you want to dispute my predictions, you need to give your own prediction and we see who is right. but if I am the only person predicting, then I have the upper hand even if my predictions are wrong. no use being wise after the event. so where do you think the price is headed? today's low 440.7 is an all time low, the earlier lowest low was 445.1, it's in freefall currently.
It is an extremely difficult company to value. Prior to its part-privatisation bankers' estimates varied between ~300 and ~800 (from memory). Spreads amongst analysts since have been similarly wide. It has both political and competitive problems to address. I hope they are getting on quickly with positive restructuring - they seem to be- and are not being held back in any way by the government still owning 30% - I don't think they are. There must be,you'd hope, some assistance by the regulator to allow them to compete better with the 'cherry pickers' and offer their product (parcel delivery) at a market price. If there is and GLS is further developed and expanded (despite the little local difficulty in France) then I think they could have a bright future. As it is, with all the political furore and the downwaves in the sp, it's clear confidence in them has,to some extent, been lost by the market; a shame really because I don't think, in my experience, the postal delivery service has ever been so good. Our cycle-less postman with his parcel pram certainly seems well motivated. Cold comfort, but at least for family investors in the IPO, the return is still many times bigger than available interest rates. Mine will continue to hold -the doldrums won't last forever, the upturn in the economy will be an enormous help.
If I had a spare 5k or 10k I would invest in Royal Mail at £4 if it got that low but if the shares were a hospital patient it would be icu as it does look like it been in a car crash in the last three month or so
I have not sold but wish I had, all the worst that I predicted has come true and near my worst overall share price forecast and have kept quite since then, my stance is still a sell but I feel it has virtually reach the bottom but I can still see lows of £3.80-£3.90 level short term before it settle out but for the long term investor it crying out a investment but give it 3-4 months and all the sellers will be out of the market by then but the bear are in town and will do there best to tank this already nervous market on Royal Mail but I think 12 month target is def £5.10-£5.25
Perhaps these shares were not as under priced as press thought they were originally priced at modest discount to carefully calculated value what was possibly overlooked were tracker funds and pension funds etc that have to reflect ftse constituents in their holdings They had to buy whether they want wanted to or not.Most now have the holdings they need and the price is slowly but steadily finding its natural level as a multiplier of its projected dividend yield. I am no expert but would guess this will be at premium to the issue price or about what it is now. Long term if company profits rise so will the share price if they fall price will as well - this will be down to buy and sells of the shareholders that are not locked in.
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