Posts Photos Archives About

Subscribe: RSS JSON

2018 August

2018 May

2017 November

2017 May

  • It's market pricing, except the market moves very fast. There is no single entity determining what the prices should be. It's a whole bunch of individual buyers deciding "this is the price I'm willing to buy at" and a whole bunch of individual sellers deciding "this is the price I'm willing to sell at". They adjust until they meet at some point.

    Think about how it happens in the real world. Let's say you open a lemonade stand, and you want to make a lot of profit, so you sell lemonade at $100 a glass. Everybody who walks by thinks that ridiculous, so even if they're thirsty, they don't buy your lemonade. Then someone else puts up a lemonade stand near you and sells lemonade for $1 a glass and everyone buys from him. Sellers decide how much they want to sell at, and buyers decide how much they want to buy at, but for transactions to actually happen, the buyers and the sellers need to find prices where other people are willing to transact.

    Selling stock works the same way. For any stock, there is a current market value, which is (simplified) the price of the stock for the last transaction it was sold.

    If I want to sell my shares in that stock, I can choose to:

    • sell at market value - since someone recently bought at that price, it's likely that someone will buy my shares at that price too
    • Or I can choose to sell at a higher price, and hope that no one else is selling at a lower price (since I would get undercut) and that there's someone willing to buy at that price.
    • Or I could choose to sell at a lower price, since I would be more likely to find buyers that way

    Buying a stock goes through a similar decision-making process.

    How do buyers and sellers determine what price to sell at? Everyone has their own rules. People new to stock trading might just stick to market price all the time. Shares in companies that do well (have more profits, etc) are more desirable (because they can give our dividends), so if people think a company is doing well recently, they might be willing to pay a higher price for those shares. If a company is involved in a scandal, the stock price for that company might go down, since people will view it as less valuable.

    There is no magic formula that predicts what stock prices will be (whoever discovers that first will be rich). It's largely a matter of perception and psychology. Sometimes stock prices move mainly because of rumors or speculation.

2014 January

2013 December

  • Us Catholics have a Pope; the protestants don't. I'm not sure if the protestant religions even consider us proper Christians (edit: Of course we all believe in Jesus; what I meant by the last sentence was that I've been to places where if you say "Christian church", it refers to a place of worship that is protestant, but not Catholic).

    Catholics were around first, until the 1500s when some guy named Martin Luther started a movement that created protestantism. The protestant movement started because some people didn't like the way the Catholic Church handled things and I guess they wanted to get more back to basics (that is, focus more on the Bible rather than all the Catholic traditions) - that last part may be my personal opinion.

    The protestants have a common set of 3 fundamental beliefs: that scripture (the Bible) alone is the source of all authority (unlike Catholics that have a Pope and a Church that can decide some stuff), that faith in and of itself is enough for salvation, and the universal priesthood of believers (which means that any Christian can read and interpret and spread the word of God, unlike Catholics which have a dedicated priesthood).

    Among protestants they have different denominations - Baptists, Presbyterians, etc. They all observe the same fundamental beliefs mentioned above, but they vary in their practices and on what stuff they focus on.

2013 September

2013 August

2013 July

2013 June

2013 May

2013 March

2012 September