Chapter 6

Why Stock Prices Rise and Fall

In This Chapter

arrow Finding out how a company becomes a stock

arrow Digging for online data that might affect a stock’s price

arrow Finding academic studies online and profiting from them

arrow Reading quarterly earnings statements online

arrow Getting a handle on economic data

arrow Gaining insights from long-term successful investors

Investors often wonder why bad things can happen to shares of “good companies.” It’s common for a company to report seemingly solid news, like sharply higher profit, and its stock will fall anyway. It doesn’t seem right to many investors. This chapter answers the burning question you and many investors might have: “Why do stocks rise and fall?” It’s a two-part answer because one set of forces causes stocks to move in the short term, and another set influences stock prices in the long term. I explain what moves stocks and show you online tools ...

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