Stock Market Case Study

1032 Words 5 Pages
Qualitative values help to figure out and judge the psychological side of the stock market. As humans, there’s always an emotional side to our judgements, and although it may seem unreasonable to buy a stock without actual substantial facts, people often can’t resist the temptations of following the hype. There are several factors in looking at the qualitative side of a stock. The company behind the stock can significantly affect the consumer and buyer’s attitude towards their stock. The employees of the company affects the productivity and the quality of their service and goods. In particular, management serves as a integral part of making a company’s decisions and in turn their direction and fate. An individual should have a grasp of the …show more content…
Example of such a phenomenon occurred following the super bowl as companies who invest in a advertisement during the game saw a increase in their stock prices, as consumer become interested in the marketing of said products. Therefore, it’s key to know the actions and movement of the companies that an individual wishes to invest, and to stay current with news stories concerning the companies. In turn, it must be note, the tremendous effect media has on a company and its stock. Media constantly monitors companies’ movements and serve as a watchdog and herald of news following the company. If any incidents were to happen, it would quickly spread and become known to the general population. Likewise, if any significant innovation or improvement would happen, it would become quickly known, too. Although, some people argue that “media is choosing to cover extreme cases of people losing money in the stock market, simply because they make for good stories and good tv” (Value Trap Blog). However in the widespread essence of investigative journalism, such actions can quickly filter out by double checking or triple checking such information, and mix with an individual’s own observation and opinion can serve as a effective indicator. Therefore as a investor, it is …show more content…
These reports and opinion from these “professionals” can significantly alter the general public perception of a stock, and often times they serve as great indicator of whether a stock would increase (Cai, Zilan). If several analyst were to pick the same stock on their recommendation as “must buys:, then typically the stock would seek to follow the ruling of said expert either due to actually having high potential or the hype generated by the expert would influence others to invest in it. Likewise, the same can happen for a must sell” then the stock would suffer in turn due to the analyst’s influence (Market Watch) . In most occasions analyst’s opinions are often correct, however one must keep in mind that these experts are humans too and are liable to make mistakes like everyone. This truth in turn creates a dividing line in the field as some believe “Analysts conducts extensive research on a stock and then issue a recommendation in combination with their expert analysis to determine what the future holds for company” creating a trustable and valid judgement of the stock (Hensen). While others state the obvious moral pitfall of such evaluations, “analysts reports can offer some great information on the health of a business, but be aware that they tend to be biased for ‘buy’ ratings” as the bias can create a nonexistent red flag and inaccurate determination of the stock (Market

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