2006-07-14 14:03:52 · 6 answers · asked by Abcd 1 in Business & Finance ➔ Investing
There are a variety of methods used to value stocks, each of which has it's pros and cons. For example, there's the PE Ratio method which compares stock price to company earnings.
The 2 main schools of thought are technical analysis and charting. Technical analysis is a methodical and statistical approach to stock valuation. Charting is simply looking at the historic prices on a chart to see if there is a trend.
2006-07-15 05:04:38 · answer #1 · answered by msoexpert 6 · 0⤊ 0⤋
A bit complicated to explain here just by a few words.
First there are fundamentalists. They base on company performance and earning strength to predict the price in long term.
Besides, there are people who believe in technical analyses. They think history can be repeated and always form a pattern.
In short term, different news and information affects the prices too.
2006-07-14 14:19:05 · answer #2 · answered by linerak 3 · 0⤊ 0⤋
The market drives the price of the stock. Supply and Demand.
2006-07-14 14:07:54 · answer #3 · answered by wildcatter76 1 · 0⤊ 0⤋
They are often predicted using cash flows and industry multiples. Its all b.s. because it assumes a certain rate of growth, which is just a guess.....and is often wrong.
Analysts are losers. Don't trust them....they are not looking out for the investors best interest.
2006-07-14 15:28:44 · answer #4 · answered by jadz 2 · 0⤊ 0⤋
It's fairly complicated. The best way to pick a good stock, is to pick agood sector and then pick the best of breed
2006-07-14 14:08:34 · answer #5 · answered by Anonymous · 0⤊ 0⤋
If they were predictable with any certainty, I wouldn't be wasting time answering your question.
Answer...they arten't
2006-07-14 15:03:25 · answer #6 · answered by Nick C 3 · 0⤊ 0⤋