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I'm willing to risk that amount starting out but is that enough for most stock? The price is in between 80 and 90.
Additional Details
I'm new, so is $1000 a good starting ... |
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Metaphysical Identity | Do big companies have an advantage over the common person when trading in the stock market? |
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Magically Ambitious
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Yes, they have the advantage or resources. There are full time employees who do nothing all day but research the company you're thinking of investing in.
That being said, the little guys advantage comes from not only moving in and out of the stock and not affecting it's price, but two other reasons.
1st, when the big guys decide to move in to a stock, they have to justify their decisions to board of the directors... it's their job so the last thing they want to do is look incompetent and get fired (and not be able to get another simmilar job at another fund). So they will want to invest in companies that other big guys are investing in, so if they go down they don't look stupid. So you can use this information to make contrarian investment decisions with big name companies.
2nd, if you're looking into micro-cap's and you actually know something about the business you're about to invest in, you have a great advantage because the big guys typically will ignore micro-caps or even a lot of small caps. Where this is especially useful in investing is when you find a company who's business you understand and you see a bright future... you notice that it's only followed by 1 or 2 analysts or maybe none at all, it might be a great time to buy, because as soon as an analyst discovers it and gives it a buy rating the price will shoot up and you will make money.
These are a couple of reasons why the small investor is never going to go away.
Good Luck! |
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steven s
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are you serious , of courses they do |
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CC
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of course they do. they are called institutional clients. that's how ipos work: investment bankers privately sell large amounts of shares before the ipo at set price, and then on the ipo day the big companies profit by selling them to smucks like us at inflated prices. |
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OPM
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No, and in fact, the studies show the reverse is true and for a remarkably simple reason, volume. A person investing $10,000 in Wal-Mart will not impact the price at all, that is just a little over 200 shares. An institution trading in just 1000 shares will lower the price or increase the price by around 4% and Wal-Mart is extremely liquid, go to 10,000 shares and the impact is larger and go to 100,000 shares and special measures have to be taken to prevent disturbing the market price. Research shows that size is a statistically significant drag on returns, the bigger you are the more difficult it is to make a good return.
Big companies do possess one advantage and that is in private equity transactions, they can get in or out at prices a small investor would not be permitted to even think about. |
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Joey Michaels
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Yes, so do off market investing. |
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Dont_taze_me_bro
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What do you mean by the term, Big Companies? Do you mean mutual fund managers? |
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d/dx+d/dy+d/dz
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Big companies generally have more resources and information than a small investor and may even have enough influence to hold a seat on the board of directors. A large investor can certainly more the market up or down and may do so to manipulate prices. Please note that there is as much advantage to moving a stock price down as to moving a stock price up. A large investor may, for example want lower prices in order to acquire more shares or higher prices to sell shares. Only a fraction of the stock manipulation is noticed by regulators and an even smaller fraction is prosecuted. The common person has one advantage: agility. A small investor can dump 100 shares without changing the price whereas a large investor cannot easily unload 100,000 shares. |
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thebigm57
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Anyone with sufficient resources available to buy a company outright has an advantage...In other words you or I probably can't afford to buy out even a low capital company of say $5 million in value...others have that ability sometimes can and do manipulate the price of said stock. Yeah, there are "safeguards" to protect the little guy from this manipulation...but it does happen on occassion and usually it's folks like us left holding the proverbial bag. PEACE! |
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Mark S IV
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The correct answer is yes, and no. They are at a disadvantage because the volume of stocks that they buy and sell at, effects the market. They can't buy 1,000,000 shares without driving the price up, or sell them without driving the price down. Whereas the market wouldn't flinch if you or I decided to trade our measly 100 shares. So on a normal everyday basis, they are at a disadvantage, but they have certain areas where they have a distinct advantage.
They have the advantage when it comes to IPO's and private equity. They will be the first ones that the brokers will go to when they have a lot of shares to sell. You and I will only get what the big boys don't want.
Plus, the very fact that they are buying 1,000,000 shares of a particular stock, will influence others to buy also, driving the price up further. All that you need to do is say that Warren Buffett took a stake in some company, and there will be a stampede of smaller investors following suit. In this way they can actually influence the prices of stocks to their advantage. Something that you or I can't do. |
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witwicky000
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not really.
i guess but i think you must be awaire with the market
thing is the advantage they get is hell alot but its not something they dont deserve.
they pay alot so they loose alot. when market is going down.
as the resources of information is more then a common person, so decision they do is with the much information which help them in where to invest and where not.
because there investment is on larger scale so profit they gain is more.
common person can cover no more den two fields. because information he alone can get is not possible
as the company has more people to think of and do so they can cover up more fields which give them benefit to invest in field which has more chance to go successful
but individual can not adopt all what is going in market so he will rather stay away or guess in choosing a stock an which is like gambling.
plus the bigger benefit for them is quote or hint which you must be awaire of ......
they get hint or quote from different resources of market . |
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diceccon
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Absolutely, they have the buying power so they can buy a million stocks in a company and sell them when the stock goes up one cent. Unfortunately the average joe has to get lucky and have his stock go up a few dollars before he makes a couple thousand dollars. A broker does what a larger company will, but it's your choice if you trust them or not. Another idea is to put your money into a fortune 500 tracking account which invest your momey automatically into the fortune 500 companies, unfortunetly you may not be able to get your money back for a few years. If you want to go long term, choose a company that isn't going to go out of business and open a drip account with them, if you put 1000 dollars on 100 stocks, any money that is made on them will automatically buy new stocks in that company, excellent for retirement.
Hope this helps! |
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