Why do investors say this?

Question

That the stock price doesn't matter?
lets say that I have $70K and bought 70K shares of a certain stock($1/share), if the stock went up to 10 I'll make$700000.however, if I bought 2800 shares of a stock($25/share) and it went up to 10,I'll only make 28000$.

Answer 1

Not sure where you heard an investor say that unless they were just joking to irk someone .
30 years , I have Never heard that .

The entire concept revolves around price .

Either they were joking or they were clueless .
And your 'what if ' scenario was Not related to "prices not mattering" .
It related to the % rise in the price and not the absolute price .
Your 70K shares had a 1000 % rise and the 2800 shares had a 40% ,
Ya , so ?
Are you confused about something ?

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Answer 2

The focus, when you have a set amount of money, is actually on the percentage by how much you can get the money to grow.

If I have $5K and want to invest it... people might say get the $10/share stock and not the $65/share stock because you can buy more shares and the stock only has to rise by a lesser amount. This is flawed logic, because the pricier stock may have more momentum behind it, and although I only purchased 76 shares of the $65 stock, what matters is by how many percent it will grow. I bought as many shares as my $5K budget would allow.

If the $65 stock grows by 10% or $6.5/share (times 76 shares) and the $10 stock grows by 7% or $0.70 (times 500 shares), the end result will be that the portfolio with the highest percentage increase is worth more money. The portfolio w/ 76 shares is now worth $5,494, while the portfolio with 500 shares is now worth $5,350.

So, people are not saying ignore the amount of money per share, but the concern is the percentage of increase for the over-all portfolio. Pursue the stock with the highest percentage momentum. The price only tells you how many shares your fixed amount of money can buy, and that's not important when talking about portfolio performance.
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Answer 3

If there was a broken guitar you could buy for $1 and a working guitar for $25, does price really matter? The only way the broken guitar will increase in value is if someone comes along and fixes it, or if 2 people who desire the same broke guitar start bidding up the price.
It's the same principal with stock -- a $1 stock that's not making any profit probably isn't better than a $25 stock that is making a profit.
I hope this was of help.

Answer 4

Why do you use the word "ugly" in your identity?

...They were using jargon to de-emphasize the share price vs the percentage increase. Investors know that it matters, but what matters more is the appreciation of any stock which ultimately gets you back to share price, if you know what I mean.

The percentage increase is not the same although each stock increased by $10. The dollar stock increased 1000% while the $25 stock increased by only 40%.

Now you know that stock price does matter. Invest wisley.

Answer 5

Because stock price DOESN'T matter, your math is seriously flawed!

Your first stock went from $1 to $10, ie TEN TIMES what you paid for it.

If your second stock did the same thing, it would not go up 10, it would go up $225/share!

Who is richer, a man with 1000 $1 bills, or a woman with 100 $10 bills? Or a child with 10 $100 bills?

I think you are misinterpreting how stock prices are reached. Please do not invest your own money until you understand!

Answer 6

Sells fluff. Judging from all the answers given already, you cannot come away from here and not know that stock price matters.

Your own example proves it: Seventy thousand shares of the $25 stock would be $1,750,000. If price were not a factor, you would not have adjusted the amount of shares your were able to purchase with the same $70K.

Furthermore, it is imperative that you get a handle on percentages when you are dealing with quantities.

Good luck.

Answer 7

The saying is an over-simplified way of saying that the price of the stock is not the most important factor.

For example, let's compare two stocks.

BRK-A last traded at $117,100.00 per share. OMOG last traded at $0.0001 per share. If the price of the stock is the most important factor, it would be far better to buy 1,171,000,000 shares of OMOG than to buy 1 share of BRK-A. However, in my opinion it is quite likely that any money invested in OMOG is likely to be lost when the stock becomes worthless. It is also my opinion that one share of BRK-A is likely to continue to increase in value as time passes, so I would far prefer to own one share of BRK-A than 1,171,000,000 shares of OMOG.

Answer 8

how right you are.