What causes stock prices to move dramatically during TRADING HOURS?

What causes stock prices to move dramatically during TRADING HOURS?

Earning reports and conference calls usually happen outside of trading hours. What are the catalysts that create volatility during the trading hours?

Ans:

Right now there are many things that cause volatility. The whole Europe debt crisis is the main one that comes to mind, but I also believe that uncertainty about the economy as a whole also plays a large role.

Talking about earnings reports, Expectation and perception are two of the biggest influences of stock valuations. If more people are selling than buying then the stock price will go down, simple supply and demand. If however something called the "whisper number" is not sufficient enough for investors to highly value the company then that could cause the price to drop. An explanation of the whisper number is the expected quarterly or annual number that analysts expect from the report. It is purely 100% speculation.

Another thing to think about is that volatility works on the up side and the down side. So in theory, it can work in your favor.

Source(s):

Independent Investor

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Can a movie that does well in the box office increase a stock?

Can a movie that does well in the box office increase a stock?

If a movie makes upward of $500k in box office, or has a huge opening weekend, will the production company's stock increase?
if so, how soon after it comes out?

Ans:

Depends on how much they spent on making the movie ($500K is actually a pretty weak performance for anything outside small, independent releases), and how much they were expecting to make.

If it beats expectations, a bump in stock price would occur as early as the Monday after release.

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Does India need tougher laws to tackle insider trading?

Does India need tougher laws to tackle insider trading?

Ans:

There are enough laws only problem is their implementation with iron hands.

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When the super rich start selling off currencies and start investing in farmland is that a good time to start?

When the super rich start selling off currencies and start investing in farmland is that a good time to start?

Additional Details

acmeraven...I meant to give you a thumbs up and now that thumbs down is there forever....crows and ravens are the coolest animals on the planet...that is until we get our **** together. lolz

who is #1: Yeah I love the video, made me tear up :P Good song too! I'm going to be doing things differently in the coming year that's for sure. I had no idea about that aquifer, that's actually really scary too...especially since my new home base isn't so far from the old one ha ha.

Close to where I am now they were proposing to put a landfill on the only rising aquifer in the area....

*facepalm*

Ans:

http://www.thesurvivalpodcast.com/food-s…

Some prominent wealthy people have been investing in farmland for several years now. Because there has been a worldwide food shortage. If i recall correctly, in 8 of the last 10 years the world's grain crops have not been enough to meet effective demand.

And of course once we stop fighting over oil we will be fighting over water. One huge problem in America is that our midwest once was the bread basket of the world, but that's only been possible because (see map)
http://en.wikipedia.org/wiki/Ogallala_Aq…
they've been pumping water from a source which is ancient and may never refill itself. Already agricultural towns are becoming ghost towns because they pumped the water from a shallow place and the water level has dropped below where they can get at it.

And about 30 years from now, wars will be fought over sources of phosphates, which are necessary to grow food.

Right now, storable food is a great futures investment. Prices are already rising, but not as much as they should, because producers have been absorbing costs and playing little tricks like keeping the price the same while reducing the 16 oz box to 14.5 oz of contents, to keep the price per unit the same.

But people are adapting and there is a cultural revolution going on in America which will not be televised. Veggie gardens are springing up all over America, people are getting prosecuted for growing veggies in their front yard, and you will love this video:
http://www.youtube.com/watch?v=F8UPsSU_E…
Jack talks for 2 minutes, 10 seconds and then the song begins
THE REVOLUTION IS YOU
and 120 pics submitted by fans of
the survival podcast "Helping you to live a better life NOW, if times get tough or even if they don't".
http://www.thesurvivalpodcast.com/

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Why do people buy stocks which don't pay dividends?

Why do people buy stocks which don't pay dividends?

What's in it for me if I buy a stock which pays no dividend?

I own a piece of the company fine, but what does that do for me if I don't get a share of their profit?!

Ans:

When a company has cash earnings, it has two choices about what to do with those earnings. They can pay them out as dividends or they can reinvest them back into the business. If they choose to reinvest them back into the business, the business grows and your stock represents ownership of an ever-growing business. The larger business should create even more earnings. This is compounding.

Further, you don't get taxed on reinvested earnings but you do get taxed on dividends. You only get taxed on reinvested earnings when you sell the stock.

That means that if a company chooses to reinvest dividends you get compounding and tax deferral and you can still create your own "dividends" by selling some shares of stock whenever you want. In finance, there is a principle called "Dividend Irrelevance" that says that the dividend rate is irrelevant to the stock price for the reasons I've just listed.

In the real world, there is some evidence that you can get better total returns from buying stocks with dividends (though I doubt it's true if you include tax deferral) simply because dividend paying companies have reliable cash flow. You can certainly get at reliable cash flow in better ways than just looking at the dividend rate (e.g., AAPL has relaible cash flow but no dividends).

There is also some advantage to dividends if you are living off them as selling some stock every month or so would be painful and frought with errors.

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Where in an NPV cash flow analysis do you insert further equity investment beyond Yr 0 and is it plus or minus?

Where in an NPV cash flow analysis do you insert further equity investment beyond Yr 0 and is it plus or minus?

I am looking at a Capital Investment Appraisal question and money to fund the project (an MBO) is obtained from both equity and bank borrowings. In the middle of the project (years 2 and 3) more cash is needed which is provided by the shareholders. How is this extra funding shown which actually enhances the cashflow but is an investment like the Year 0 one which is a minus figure ? Is the additional money poured in negative (from the investor's viewpoint) or is it positive (from the cashflow viewpoint).

Ans:

Generally, the additional capital is considered to finance the negative CF of that period - i.e. the negative amount that gives rise to the need to raise (and contribute to the project) additional capital.
So THAT add'l capital is not a cash flow of the project, it is simply considered to be available to FINANCE the negative cash flows that I assume appear in years 2 & 3.



Consider...
When the net CF is goes negative, than at that stage the company owes money, so a high discount rate is not cautious but too optimistic. Some people see this as a problem with NPV. A way to avoid this problem is to include explicit provision for financing any losses after the initial investment, that is, explicitly calculate the cost of financing such losses. In your case, the cost to finance the losses is the cost (the required return) of the NEW equity raised for the project.

If you account for the cost of the new equity this way, you wouldn't change the discount rate to reflect the new capital structure because this would be double counting the cost of the new equity.
Example: r = begining discount rate
ke = cost of new equity
Basic CFs of the project (no new equity) ....(CFYr2)/(1+r)^2 + (CFYr2)/(1+r)^3....
above shows base negative CFs from the cash flow..add to year3's base cost (- i.e. increase the negative amount by), the cost of the new equity required to finance the base negative CF in year 2. In year 4 (which I assume by this time is positive) account for the costs of financing the base negative amounts in years 2 and 3. (I am assuming that the amount of add'l equity raised is equal to the sum of the 2 base negative years.) The cost of this financing continues for the remaining years of the project (unless you buy back the new equity out of those cash flows <unlikely.)

Again, don't change the discount rate or you'll be double counting.

Example:
CF2base = (10,000)
CF3base = (8,000)
CF4base = 6,000
Add'l equity req'd yr 2 = 10,000 * (ke) rate new equity, say 8% = add add'l $800 expense to CF3 before discounting
Add'l equity req'd yr 3 = 8,000 * 0.08 = $640 (+previous $800)=add add'l expense of $1440 to CF4 AND ALL subsequent CFs before discounting
Adjusted CFs to discount:
CF3 = (8,800)
CF4 = 4,560
etc.

Hope this helps....

Source(s):

http://en.wikipedia.org/wiki/Net_present…

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What is a good company to invest in right now?

What is a good company to invest in right now?

In stock market there is very large company available at very attractive level how to choose from all first you decide which sector is good my choice is metal and banking and than select good stock.

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