Why does anyone buy individual shares?

capital0ne

cloud_dog wrote: »

Isn't this thread another of CapitalOne's FIFO posts?

It certainly is - Cheers :beer:

capital0ne

eskbanker wrote: »

You spelt GIGO wrong....

hehehehe :rotfl::rotfl::rotfl:

[Deleted User]

talexuser wrote: »

Gosh, what wisdom. It would have come in useful 24 years ago.

I can provide a more recent link, talexuser:
https://forums.moneysavingexpert.com/discussion/6037441/zingpowzing-v-bowlhead-challenge&highlight=zingpowzing
jump to #16

John_Smith_2019

ZingPowZing wrote: »

Glaxo is a prime example of a share whose price never goes anywhere but keeps paying a healthy dividend. It has its place but plainly isn't a stock in which to invest for stellar performance.

An example of a growth stock would be Aapl. It's share price was about the same seven years ago but, since then, they have diluted shareholding by a factor seven so, if you follow my rough calculation, the value of their shares has multiplied by seven in the interim. It really was not that difficult to find; it is the most most heavily traded stock in the world.

But when push comes to shove, I reckon most people would prioritise their medications over a new iphone.

Eco_Miser

Thrugelmir wrote: »

If no one researched the companies how would the share price be struck?

Market-maker looks at current demand and supply, and picks a price to make them balance (and himself a profit).
No research, just people acting on gut instinct. This is definitely what happens in bubbles.

John_Smith_2019

Thrugelmir wrote: »

If no one researched the companies how would the share price be struck? Tracker funds piggy back on others work.

That is true.

Thrugelmir

Eco_Miser wrote: »

Market-maker looks at current demand and supply, and picks a price to make them balance (and himself a profit).
No research, just people acting on gut instinct.

Investors will still undertake their own research to determine as to what they are prepared to pay for a share or alternatively decide that the share is overpriced and sell it. Market makers will also react to RNS feeds etc.

poppy10_2

It's generally only old boomers who buy individual shares these days - the sort of people who kid themselves that they have such great insights into the stock market that they can pick out stocks which are undervalued, where massive global financial firms with teams of highly paid PhD level analysts have somehow failed to spot the same.

Generally individual stock pickers do worse than a monkey throwing darts at a FTSE 350 table. But they will fool themselves that they can beat an efficient market. Let them have their fun - their malinvestments benefit the rest of us who are in passive trackers.
https://www.investopedia.com/terms/e/efficientmarkethypothesis.asp

Eco_Miser

Someone else who thought he had algorithms that could stock-pick: https://www.amazon.com/dp/073521798X/ref=as_li_ss_tl
They were only right 50.75% of the time, but made billions.

Thrugelmir

Eco_Miser wrote: »

About half the people buying individual shares will beat the market - the other half will lag it.

Depends when investors actually buy and sell. Share prices are more volatile than year to year performance suggests.