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We _do_ know to sell sharesWe _do_ know to sell sharesPosted Jun 16, 2004 1:36 UTC (Wed) by djabsolut (guest, #12799)In reply to: We _do_ know to sell shares by lakeland Parent article: Red Hat's Red Flags (Motley Fool) Besides the insider-trading questions, what you have described is consistent with sheep mentality thinking. Apart from the sudden and temporary price drops, thinking like that also causes silly stock bubbles (e.g. dotcom if anybody needs reminding). In both cases the trends are unstable: the true value of a stock is best calculated as an average over a period of time (say a few months).
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We _do_ know to sell shares Posted Jun 16, 2004 1:52 UTC (Wed) by lakeland (subscriber, #1157) [Link] Er, yes? Your point? Trying to second guess the mob is a dangerous game.Made more so since they are all trying to second-guess you. If you are relying on the mob continuing to live a delusion and suddenly reality rears its head then you're in for serious trouble -- especially if you're a little slow. Of course, instead of making a profit on the share price you can make a profit on dividends and ignore the share price. This is certainly a much more stable income and does not present any of the moral or ethical dilemmas inherant in out-guessing the mob. But as the Fool article states, RHAT is already grossly overvalued in terms of dividend payout so I can't imagine why any investors would own shares in Redhat for the dividends.
Sure you can rely on dividends ... Posted Jun 16, 2004 18:30 UTC (Wed) by smurf (subscriber, #17840) [Link] ... assuming that the company will in fact pay a dividend, which is by no means certain.Besides, the stock price is automagically valued down when the dividend is paid, so the company is either going to be worthless somewhen in the future, or they'll make more money. Which you can't count on either. The bottom line is, in case some reader doesn't know it already, that there's no magic way to make money on the stock market. :-/
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