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Don't Believe All Stock Trading Myths-It Could Cost You

ck Trading Myths - Share Price and P/E Ratio
A common misconception among investors and traders is that a stock along $5 per share namely"cheaper" than a stock trading along $500 per share. This seems to be common sense,merely within reality, it equitable isn't true. Christian Louboutin Sale
Many investors,especially newcomers to the earth of trading, are tempted along the Christian Louboutin Sale allure of a cheap stock trading by under $10, failing to realize that the stock may never be low after all
For many this lesson namely theoretical the hard way - through the loss of hard-earned money. Here are some easy concepts and examples illustrating what actually makes a stock low"
Stock Trading Myth #1: All Stocks oakley outlet Are Created Equal
The fantasy that cheap oakley sunglasses a stock trading as a triple-digit share price namely extra priceless than a an trading as less than $10 namely an of the most persistent and yet entirely baseless of all trading myths.
On the surface, this stock trading legend makes faultless sense. After all a decanter of wine that sells as $280 namely undoubtedly extra invaluable than a flask of the same size that sells as $2. Sure, you Louis Vuitton Handbags would anticipate the $280 bottle of Christian Louboutin Shoes wine to be of higher quality,merely that's a matter of personal preference not fact
The truth of the matter namely that the 2 bottle of wines are equal among terms of size,only never surrounded terms of cost - an namely priceless and one is Christian Louboutin Shoes cheap.
When it comes to trading, the distinction namely that not all shares of stock are created equal. They are,within fact,not all the same size. If a company has a utter of one million shares of stock outstanding, and you own 100,000 shares, you own 10 percentage of the company.
If christian louboutin sale afresh company has a perfect of 10 million outstanding shares, and you also own 100,000, you own equitable Louis Vuitton outlet 1 percent http://www.editions-nathan-adamou.com of the company. Unlike the 2 750 ml bottles of wine, these two stocks are never oakley outlet equal within any access.
Stock Trading Myth #2: Sirius Is Cheaper Than XM
Take the example of Sirius (SIRI) and XM Satellite Radio (XMSR). Sirius trades for nearly $5 per share and XM trades at $15. On the surface, it would seem because nevertheless XM were three times as priceless as Sirius,only upon closer inspection, Sirius namely evidently http://www.osiplastics.com/ the accessory priceless of the 2
This namely because XM has around 258 million absolute shares outstanding, whereas Sirius has one.4 billion. If you owned 10 million shares of XM, you'd own approximately oakleys sunglasses four percentage of the company, whereas whether you owned 10 million oakley outlet shares of Sirius, you'd own less than 1 http://www.ohiosteel.com/ percent of the absolute shares. Cheap Christian Louboutin
Neither Sirius neither XM have made affirmative earnings (profits) because of additionally Sirius had annual sales of $325 million within 2005, whereas XM had sales of $663 million.
Per share, this equals sales of about $0.24 per share of Sirius. Louis Vuitton Neverfull XM had sales louis vuitton outlet per share Louis Vuitton Purses of $2.88. Since the share cost of Sirius is almost 1/3 that of XM, it would be fair to develop Sirius's results forward three
Even making this improvement $15 of Sirius stock earned sales of impartial $0.72 within 2005, http://www.atulocal1300.com/ whereas $15 of XM stock earned $2.88. XM namely,along all reasonable measures, much cheaper than Sirius. Christian Louboutin Shoes
Do you perceive the insanity of thinking that Sirius is cheaper just because its share price namely lower? A stock trading by a inexpensive share spend is never christian louboutin mens shoes necessarily low A stock along a high share cost namely never necessarily invaluable
The aboard instance used sales data because nor company has turned a profit as of additionally Normally, earnings (profits) data would be acclimate to make sure the stock's oakley outlet P/E (price-to-earnings) ratio.
Conventional wisdom says that a stock at a lower P/E ratio is cheaper than a stock trading along a lofty P/E ratio, and in this rare oakley prescription sunglasses case, conventional wisdom namely correct. But anyone who says that a stock by a lower P/E is a better value than a stock trading along a higher P/E takes http://www.yafatima.org/ the conventional wisdom too distant
Just think of the wine example: Some $2 wine might be because agreeable for some $10 louis vuitton bags wine. Cheap Louis Vuitton In this case, the Christian Louboutin Sale $2 flask is a bargain. But some,if I were you highest $2 wine namely cheap for causative The same is true for a stock by a cheap P/E ratio.
Stock Trading Myth #3: Low P/E is Good; High P/E namely Bad
The opener to making money oakley outlet aboard a stock is to find a stock oakley sunglasses outlet along a value Mere
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