Questions tagged [stock-market]

Markets in which ownership stakes of firms (e.g. stocks/shares) can be traded.

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500 views

At what rate can a multi-billionaire liquidate his assets without significantly affecting the stock price?

Let's consider three different billionaires: Jeff Bezos, Bill Gates and Warren Buffett. Now let's say the three of them (at different times) decided that they want to liquidate all their assets and ...
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27 views

Stock price and exchange rate is correlation, but VAR model order is zero

It is well known that Japanese stock price and exchange rate(USD/JPY) is correlation, So I built a VAR model in python about stock data(Tokyo stock price index) and exchange rate(USD/JPY) and I fitted ...
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2answers
581 views

EMH: Difference between market price and fundamental value?

I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
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3answers
76 views

ROI and stock rates

I'm an engineer with minimal to zero knowledge about economical topics, please be patient with me if the following question makes no sense or is too basic ... Currently I'm working through the "...
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1answer
48 views

Banks and Stock Market in Germany

Why does Germany have such a small stock market, but very large powerful banks?
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142 views

Get Annualized return from a time series of daily returns

I have a time series of data which has daily returns over 15-year time period. I understand that you get multi-period simple return using the following formula. $$1 + R_{t}(k) = \prod_{j=0}^{k-1}(1 +...
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20 views

List of important business and economic news events between 1850 and 1930?

I'm collecting data on important business and economic news dates in the late 19th to early 20th century. The only list I found is this: https://www.encyclopedia.com/history/news-wires-white-papers-...
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1answer
42 views

Fall in share due to litigation

Recently, I read a news article stating Indiabulls Housing Finance shares plunges on reports of litigation against company Why do shares plunge when company finds itself in a litigation process? ...
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1answer
36 views

Why does equity have historically poor performance after rate cuts?

I am struggling to understand why equity markets seem to suffer shortly after fed rate cuts. Here is a rather telling chart: Question Assuming not some kind of spurious relationship, what's the ...
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4answers
231 views

Does stock picking work?

Does stock picking work? Why/why not? What does the research say about it? (I was expecting that this should already have been asked and looked quite extensively for such a question but couldn't find ...
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1answer
170 views

How to calculate cost of equity?

So i have this question on leverage and cost of capital: Leverage and the cost of capital Gamma Airlines has an asset beta of 1.5. The risk-free interest rate is 6%, and the market risk premium is 8%....
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1answer
582 views

How to calculate standard deviation of a portfolio?

So i have this information: Suppose that 60% of your portfolio is invested in Johnson & Johnson (JNJ) and the remainder is invested in Ford. You expect that over the coming year JNJ will give a ...
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19 views

Stock Price vs Stock Return Autocorrelation

There are a lot of paper that claim stocks follow a random walk and therefore not predictable. A basis for this statements often times a autocorrelation test of the returns. However, what if there is ...
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33 views

Decomposition of stock index movements

I want to decompose stock index movements. I know the estimated 12 months earnings growth rate ($g_1$), estimated long run earnings growth rate ($g_2$) and the index value. I am about to use two-...
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1answer
24 views

Open offer made by companies to take over [closed]

What is open offer in simple terms? What is its meaning in cases of taking over the major stakes in other company?
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12 views

Commonly used indicators for currency pair strength?

I am attempting to write a program in Python that monitors a single currency pair, GPB/NZD to be specific. My main focus will be to run constant calculations every 2 to 3 minutes in order to give ...
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3answers
91 views

Why does a company want the value of its stocks to be as high as possible?

My professor claims that a company want the value of its stocks will be as high as possible. Why should the company care? The company "minds its own business" and make its money. Why should it cares ...
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1answer
48 views

Is this lottery like stock market? [closed]

Consider the following imaginary lottery (motivated by Massachusetts' Cash WinFall): Ticket money obtained in the previous draw are given to the participants of the next draw proportionally to the ...
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0answers
18 views

Where to find a list of marketplaces (NYSE,LSE) and the financial products they offer?

I'm looking for a list (csv/json/api...) of all marketplaces (New York Stock Exchange...) and the financial products that are offered on those market places. Preferrably worlwide but US and EU will ...
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21 views

Average Return for Commodity

Suppose I have a function of a varying values represented by randomness. A stock or price of a commodity would be a good example. What is the average return for that stock on any given interval of ...
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38 views

Can a government invest in public companies so their dividends can finance the government

Is it possible that a country could use the money in its sovereign wealth fund to invest in different country's Stock Market and use the dividends to finance its government thus increasing spending ...
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1answer
35 views

How to find data about earning per share of S&P 500

I am working on a small project regarding PE ratio of SP500,for which I need historic earning per share data of SP500. I searched finance yahoo, but it has only prices data. Could anyone tell me the ...
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1answer
90 views

How time zones affects causality?

Considering that markets open in different time zones, in general the opening and closing times are different. I suppose that a stock market opening later (in the same day) receive information on the ...
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1answer
60 views

Is this market monopoly or duopoly?

Could you help me to identify monopoly, because I got confused. There is a company with market share of 54 %. The second one has market share of 21 %. Can this market be characterized as monopoly or ...
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1answer
26 views

Is it possible for shareholders to get a companies assets in place of currency?

To my knowledge being a shareholder is owning a portion of a company. Then by that logic shouldn't a shareholder be able to request a companies assets instead of money? As an example, if I own 100 ...
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1answer
82 views

log returns in finance

Why are log returns used in finance? For example to calculate a stocks performance. There are a lot of articles on that topic yet I don't find them very helpful. Could somebody please explain step by ...
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2answers
461 views

Why does firing employees appear to increase the share price of a company?

The last case is GM in the USA. I fail to understand why does this happen. I understand that laying off jobs means higher dividend for the share holder and thus higher stock prices but in the long run ...
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4answers
254 views

Bank Runs During the 1930s

Why were there numerous banks run right after the stock market crash of 1929? Why would a bank fail because the stock market crashes?
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1answer
43 views

Is it possible to commodify the State?

Karl Marx said that capitalism commodifies everything. So I'm wondering if that rule applies to the very State itself.
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2answers
107 views

How are the price signals of stocks in the stock market centralized?

We can look up the price of a stock, like that of Google, and it gives a particular figure. I would like to know how the price signal is "centralized". What I mean is: if the trades happen between ...
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2answers
127 views

How is the GDP growing when nothing else seems to be?

We've had strong GDP growth all three quarters this year. To me, that would indicate that, in at least some areas, we should be seeing growth. However, from my extremely ignorant armchair, it doesn't ...
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2answers
859 views

What does a stock market index stand for?

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, ...
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1answer
25 views

How are final stock prices arrived at?

'Everybody' knows that prices are generally governed by offer & demand, but I am wondering on the details of the stock exchange here. How are stock prices (the ones which are nicely listed every ...
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1answer
48 views

Why will the holder of a broad-based index fund, by definition, achieve the average return for the market?

A Random Walk Down Wall Street (2015 11 ed, but an 2019 ed. is upcoming). pp. 271 Bottom – 272 Top.   All “smart beta” strategies represent active management rather than indexing. Capitalization-...
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1answer
28 views

What would an investment bank have to gain by warning of an impending financial crisis?

After reading a recent article and a discussion with a friend, I was left wondering what an investment bank would have to gain by claiming that a financial crisis is coming. I can see an obvious ...
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0answers
127 views

Value of companies with circular ownership [duplicate]

Given two companies, total assets of $100 million each. Company 'A' owns \$50M of company 'B'. Company 'B' owns \$50M of company 'A'. If you look at the value of both companies do you get \$200M or ...
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2answers
108 views

Why is the stock market always rising?

I asked myself: How is it that the stocks are always rising? How is money generated every year so that the value of a company rises? I mean, at some point there is a finite amount of money in the ...
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1answer
50 views

what does historical volatility explain?

Let's assume we have close prices of one stock of period one year. As far as I understand historical volatility is standard deviation of log return, however I do not understand what this actually mean....
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1answer
60 views

Are stock exchanges market makers?

Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
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1answer
37 views

Where can I find data on market capitalization?

I am working on Home Equity/Bond Bias and need data to calculate the indicators of Home Equity Bias. So where can I find data on market capitalization (stocks and bonds) by year for each country? ...
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1answer
40 views

Market Value Changing in Response to News

On May 24th the DJIA dropped and the news has been attributing it to Donald Trump's cancelation of a talk with North Korea (see image below). My understanding is that the companies making up the DJIA ...
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1answer
25 views

Growth in dividends will equal growth of earnings

Let $Div_t$ be the dividend per share at date $t$. $\displaystyle Div_t=\frac{\text{Earnings}_t}{\text{Shares Outstanding}_t}\times\text{Dividend Payout Rate}_t$ ------------------- (1) My textbook ...
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0answers
44 views

How does a stock market work under a command economy

If a central government owns the means of production and controls business, what ramifications does that have on a stock market? Under such an economy are shares still traded as they are in a mixed/...
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5answers
5k views

Can the stock market grow faster than GDP indefinitely?

My understanding of conventional wisdom is that average long-term growth of advanced economies is expected to be significantly lower than the average long-term growth of the value of the largest firms ...
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0answers
22 views

Why does US jobs and inflation have an affect on European equities?

There are articles such as 'European shares crawl higher as investors eye US inflation data'. Is this just put down to Americans may have more money to spend overseas so investors speculate higher ...
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3answers
2k views

What is the exact relationship between the efficient-market and random-walk hypotheses?

The efficient-market and random-walk hypotheses are often discussed together as formalizations of the idea that "you can't consistently beat the stock market". But in my experience, they're often used ...
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2answers
44 views

What does a “sell-off” mean if every stock transaction is balanced?

If every stock transaction is "balanced" (1 sell = 1 buy), then what does a "sell-off" actually mean and how does it move the price of a stock? Ex. If millions of people sell a stock, there's ...
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1answer
43 views

Alternative measure for market capitalization, company “value”

I wonder what the term "value" of a company, currency, etc could mean. The most obvious, to me, is market capitalization (related: Clarifying the meaning of market capitalization) Is there also ...
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3answers
15k views

How to calculate average buy price when you buy, sell and rebuy

I wanted to get my avaerage buy price for some stocks I bought and see if I made money. So far for just buying and then later selling I have been calculating the avaege buy price using this formula <...
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0answers
58 views

What caused the increased market trading since late 2016?

I was looking at the market (DOW) performance today and noticed an oddity: Beginning late in 2016 trading activity roughly tripled. The change was sudden and remarkably consistent. What would cause ...