Вначале рассмотрим classical representation of the mechanism by which the price is formed on one or another product. When the market price formation supply and demand are key in the formation of prices and vice versa. For example, demand decreases as price increases and supply increases. In this example, the number of buyers the market decreases and increases sales. Increasing the number of products in the market causes a decrease in prices and the price is the same. With this mechanism, we have a balanced system.
The above mechanism works for any goods. Consider another example, the increase in prices for certain product increases the number of people who do not agree to buy it or choose a cheaper ekvivalent. Therefore, the higher the price of a commodity - the smaller will demand. And vice versa - reducing prices leads to an increase in demand for goods.
This mechanism does not work when the goods are the shares of the company the stock market.
value of shares can be viewed from two sides. Firstly, the action - is a security document which confirms the ownership of Part of the company. Share is entitled to vote at the shareholders meeting, the right to receive dividends, and much more. The "fundamental Analysis can determine the value of the enterprise and determines the "real price" of shares of this company. Danae "real price" will determine the value of the stock to potential buyers.
Secondly, due to high liquidity (the property for a short time and relatively cheap converted into money and vice versa) shares on the stock market turned into an effective means of investment. At the same time, high volatility (the quantity volatility) of shares in comparison with other financial instruments, make this an interesting market for both long-term investors, and for speculators that came on the market for a short time. Although the presence of their risk is quite large, but the number of market participants is growing steadily. Due to this A separate class of active people for whom the action is no longer acting as a share of the business and are interested only as commodities.
laws for what is formed speculative demand for action, are fundamentally different from above. The phenomenon of an increase in demand for price reduction does not occur, if Traders predict a further decline. The greatest influence on the formation of stock prices make the expectations of traders and their mental attitude. "The real price "may vary significantly from the market if traders believe the price change. For example, if a majority believes that the price per share will increase and starts to buy it, price is very much grows in comparison with the "actual price". And if some stocks are losing confidence and well-read in large sell, the price may drop by several times compared to "real". If traders continue to be Skydan shares, the price will fall until long as market participants decide that it is the price has fallen enough and further decline is not followed. Very often we can see, when traders are infected with enthusiasm coming into the game and then you can see panic selling and panic buying, which often replace one alone.
This approach pricing shares on the market, due to the influence of speculators and investors, strongly rejects the price of "real". Important is that supply and demand generated by expectations of price changes rather than on objective indicators. Expectations of price changes can be of different types, for example, they may be caused by the alleged changes in indicators of the company or based on the expected price dynamics.
At first sight, psychological factors should not be strongly reject share price from the "real", at least in the long run, but the market price may be as in the many times higher, and many times below "fair". Because expectations of price changes is increasingly important factor in establishing a market price for the change to "real" value of the shares.
The above mechanism works for any goods. Consider another example, the increase in prices for certain product increases the number of people who do not agree to buy it or choose a cheaper ekvivalent. Therefore, the higher the price of a commodity - the smaller will demand. And vice versa - reducing prices leads to an increase in demand for goods.
This mechanism does not work when the goods are the shares of the company the stock market.
value of shares can be viewed from two sides. Firstly, the action - is a security document which confirms the ownership of Part of the company. Share is entitled to vote at the shareholders meeting, the right to receive dividends, and much more. The "fundamental Analysis can determine the value of the enterprise and determines the "real price" of shares of this company. Danae "real price" will determine the value of the stock to potential buyers.
Secondly, due to high liquidity (the property for a short time and relatively cheap converted into money and vice versa) shares on the stock market turned into an effective means of investment. At the same time, high volatility (the quantity volatility) of shares in comparison with other financial instruments, make this an interesting market for both long-term investors, and for speculators that came on the market for a short time. Although the presence of their risk is quite large, but the number of market participants is growing steadily. Due to this A separate class of active people for whom the action is no longer acting as a share of the business and are interested only as commodities.
laws for what is formed speculative demand for action, are fundamentally different from above. The phenomenon of an increase in demand for price reduction does not occur, if Traders predict a further decline. The greatest influence on the formation of stock prices make the expectations of traders and their mental attitude. "The real price "may vary significantly from the market if traders believe the price change. For example, if a majority believes that the price per share will increase and starts to buy it, price is very much grows in comparison with the "actual price". And if some stocks are losing confidence and well-read in large sell, the price may drop by several times compared to "real". If traders continue to be Skydan shares, the price will fall until long as market participants decide that it is the price has fallen enough and further decline is not followed. Very often we can see, when traders are infected with enthusiasm coming into the game and then you can see panic selling and panic buying, which often replace one alone.
This approach pricing shares on the market, due to the influence of speculators and investors, strongly rejects the price of "real". Important is that supply and demand generated by expectations of price changes rather than on objective indicators. Expectations of price changes can be of different types, for example, they may be caused by the alleged changes in indicators of the company or based on the expected price dynamics.
At first sight, psychological factors should not be strongly reject share price from the "real", at least in the long run, but the market price may be as in the many times higher, and many times below "fair". Because expectations of price changes is increasingly important factor in establishing a market price for the change to "real" value of the shares.
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