Chat Thread ver.2

[K73SK]

Kind of like how it is now. We're talking about how we hate random spamposting. Or at least you guys do. It depends on the conversation. Sometimes I enjoy it, other times I don't.

In other news, I'm studying the stock market.

[Nightshade]

Exactly, but beforehand, it had devolved, and I wanted to express disapproval and move back on to some topic or another.

What about the stock market are you studying? I can't guarantee that I can help, but maybe I know something or another from one of my economics classes, though I am not a finance professional and certainly am not a stockbroker.

[Zup]

*Spampost*

[GoldenPower89]

Eating SpongeBob-shaped mac and cheese makes me feel younger.

[K73SK]

Exactly, but beforehand, it had devolved, and I wanted to express disapproval and move back on to some topic or another.

What about the stock market are you studying? I can't guarantee that I can help, but maybe I know something or another from one of my economics classes, though I am not a finance professional and certainly am not a stockbroker.

Answer this question for me (which has yet to get a response...)

http://www.askmehelpdesk.com/finance/ge ... ost3635836

I really need to know how to get the calculation before I can safely jump into the stock market.

[Nightshade]

Disclaimer: Not a finance major.

Well, I think your calculation is basically correct, but somewhat lacking in order to determine a share price.

So, if your company has assets of 5 billion and has 500 million shares outstanding, it is true that the book value of the company is $10 / share.

But that's an inaccurate representation of what the company is worth (and therefore, what the actual share price is), insofar as that the company is worth more than just the value of its assets on paper.

You also have to take into consideration that owning the company also entitles you to a share of the future profits that the company will bring in.

Assuming that the company is earning profits of 50 cents per share * year and a market interest rate of 4% per year, there is a net present value of the corporation's profits of 50 / .04 = 50*25 = $12.50 per share. Add in the potential for growth and other intangibles that can't be assigned a paper value, and you can see why the price of a stock can be significantly higher than book value.

[K73SK]

Right, but the main reason I want to get the book value of a stock is because I want to know the "risk" of buying stocks from a company. If I get a company that has a price/book ratio that's really high, then there's a big risk in it.. I'm searching for ones with lower ratios (as recommended by some of the rich guys such as Phillip Fisher). And of course, from companies that I can trust and *know*.

The part of that equation that I need, which is missing, is the preferred equity (I think). The reason I say that is because I did find a link on a website that showed me a book value for intel (at the time it was 15.6) and when I tried to do the same calculation as noted above, the book value did not match at all (I can't remember what I got, but it was something like $10). Unfortunately, you have to be a paid subscriber to them to get book values for most companies so I couldn't just use it as my source of information lol.

[TheRavenfreak]

So uh hey guys. The forum has been a bit dead lately. Let's change that shall we? Anyone else got Goat Simulator? Do you play it as much as I do? I've got like 4 hours put into this game. xD

[Nightshade]

No?

I already have one game to dump too much time in (Cookie Clicker); 2000+ hours spent into it.

I don't require a second such game.

[GoldenPower89]

I have never heard of this Goat Simulator. I agree though... it's been quiet lately.