How is the Stock Price Determined? | Stock Market for Beginners (Part 1) | Lumovest
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- čas přidán 20. 09. 2018
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How is the stock price determined? In this video, we'll explain how the stock price is calculated in simple terms and take you through the logic behind how everything works. This is perfect for stock market beginners who want to learn investing. People will tell you that the stock price is determined by market supply and demand, but that's really vague. For example, what's guiding how much people supply and demand for a particular stock? The truth is, it really comes down to the intrinsic value.
Let's establish what the stock price is. The headline stock price we see quoted in the stock market is the price at which the latest stock transaction occurred. It's not the price at which you can buy the stock but the price at which the last trade happened.
Buyers of a stock determine how much they're willing to pay for a stock by calculating the intrinsic value of the stock. Likewise, sellers will do a similar exercise to determine the price at which they would sell. And when both the buyer and seller agree to a price, they make a trade and the stock price changes to reflect this latest price.
Therefore, intrinsic value is the guiding force of the stock price.
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Hey guys! Do you now understand how the stock price is determined? I hope so. If not, tell me where you're stuck and I'll try to clarify things for you.
Have the shares in your company went up after this informative video? Lol
Here's a great question I'd love to see some thoughts on, "Priced in." Ok, how? Why can't I find information explaining how news or uncertainty has been priced in? Do a buyer and a seller agree on the "priced in?" A price is never set by just one party, it takes two, does "priced in" mean "ignored." It was priced in they say, ok, how, what happened, where can i see this?
If a company doubles its worth buy developing and selling a new product while all of the shareholders stop selling them, is it possible for the price of the share to increase?
Unlimited QE by the FED will change everything in anyway.
@Chris yes, already considered in the past, or "ignored." I wish people would quit saying "priced in," price is numbers and numbers are a system of measurement. It makes it sound too fancy lol
Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what’s about to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
Could you kindly elaborate on the advisor's background and qualifications?
The advisor that guides me is Sonya lee Mitchell, most likely the internet is where to find her basic info, just search her name, She's established.
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Really clear explanation about how stock price changes. i have seen around 50+ videos on the same topic, but this is worth watching it.
Thanks for the kind words!
It has a lot to do with people who don't really fully understand what they are talking about lmao
Exactly
Impressive.
This video is perfect for people who don't understand the stock market at all cuz this is literally all that matters with the stock market determine if it's a good price and if so buy. Not complicated once you understand what causes the price changes.
This is the only video which actually explained technically that why does the stock price changes & in which direction. Thank you very much Sir!
Best Videos on Stock Market i ever watched...thanks from India, lotsa love !!
Thanks for the support!!
Best video on stock market ever.
Before this whole explanation of "future value" and "intrinsic value", I thought stock market was just a gamble but now I understand how the price of a share is really determined.
I appreciate your conceptual clarity..!
Hey Mayur, thanks for watching!
Really clear explanation on stock prices! I am an accounting student and I am currently taking Intermediate Accounting 2 and I just couldn't figure out how stock prices would be accounted for and how much cash is going to be received! Thank you so much!
All my life I’ve been interested in the stock market but not understood or had stupid explanations, this is the ONLY video I’ve ever seen that has been useful. Well fucking done mate b
I learned a lot. Thanks for simplifying everything.
Thankyou for such a great knowledgeable talk about stock market.
Support from generous fans like yourself make this possible!
Best video I have seen in recent times , great work !!
i definitely recommend this video to my friends🤗. Awesome.
Clearest video of all times ! Many Thx
Easily the best explanation I have seen.
Thx man for explain how stock market determine and also fluctuates !!
No other channel explained intrinsic value the way you did. Really worth watching it.
The market is more volatile than ever. I've been holding cash since '20 pandemic crash, but just went "all in" bought up $250k worth of ETF's & individual stocks at discount, and hoping to average down on ailing companies, , open to any recommendations that come in handy
this is quite huge ! much more info needed please, what did you invest in?
excellent share, just inputted her full name on my computer and searched online, top-notch credentials. Ive seen commentaries about advisers, but not one looks this phenomenal
One of the best videos I've watched on stocks
Your presentation and the marketing strategy at the end tells how good you are at commerce and economics. I am glad to see good content from experts like you
Haha and your supportive words tell how kind you are. Thank you :)
This was done beautifully. I made the exact same Google search, thankfully i found this video!
I THANK YOU SO MUCH!!, THAT'S WHAT I'VE BEEN SEARCHING FOR A LONG TIME
This gotta be the new youtube financial GOAT. Very clear explanation sir 👍🏻
I'm trying to get my girlfriend started with investing and she gets fed up when I start babbling about philosophy, understanding P/E ratio, understanding revenue, earnings, eps, ROIC, NOPLAT, dividends and so on... This video was very well put together easily and straightforward explained, with good animations!
And very helpful for her!
@@charlesludwig9321 he clearly answered yes :P
Charles Ludwig she's 16
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Awesome video.....I would love to hear of some examples where your 'investments' haven't paid off or have fallen through and how you managed it and what you learnt from it. I think that would be really helpful!
Stop with the music.. it's difficult to concentrate
Yeah that's supposed to be correct.. But for some reason the music is making me more relaxed 😅
I don't think it's the music... it's you
Kevin P Lol exactly
It didnt bother me before i rode this lol i didnt even realize there was music now it does tho
This is so intuitively presented. I would highly recommend this video to anyone new to investments.
This video finally put everything together for me. I wanted to know how this works so I could simulate it myself, but I could not find a reliable answer anywhere until I found this video. Thank you. :D.
Thanks for this simplified explanation.
Seriously, you guys are the best of the best
4:24
There it is! As easy as it can be explained. Thanks
Recommendation: Add subtitles for beginners to better understand along the way :)
Ya
Thank you so much for this video.
Absolutely loved this video
Well explained bro! Keep it up!
Thanks for the kind words!
Been on tons of workshop, i didn't know i could gotten all off cash flow explanation for free in lumovest :( please keep making this video
liked the way you explained it all I such a simple way!
Really clear video! Nice job :)
Hey would you please tell ,how much should I assume a growth rate of explicit for cast period, aka continuing value ,thanks
Very informative guys.!
wow, this video by far is the best explaining stock price
Thanks Kenny!
Made-easy.... looking for more.
More will be coming! And there are also hundreds of videos on our Lumovest website :)
Simple and easy to understand the basic concept but very important.
Extremely helpful, new subscriber for the long haul 🙂
I'm glad Steph :)
Wow very clear and precise
To be honest, I was shocked that this channel only has 41.6k subscribers , with these contents, I thought this channel already have 100k+ subscribers. All the best! Im sharing them!
Thank you!
This is absolutely phenomenal! I’m pretty good with numbers, but your explanation and examples made it super easy to follow. Thank you so much, I have subscribed.
Hi, I just watched your channel and subscribed. Please keep up your good works. Thanks
well done, exactly what i was looking for
subscribed . GOOD QUALITY CONTENT
Clear Explanation❤️. I think this is the undervalued You tube channel on stock market. I wish this channel gets more subscribers in the future.
amazing , easy to understand
Greatest video. Thank you
Thanks Ana :)
I appreciate your effort....
Thanks for the video....
Love from Nepal....
Thank you Pratik!
Welcome.....
May you gain enough views and subscribers...... Keep moving.... Hard work pays.....
Great vid thanks
Unlimited QE by the FED will change everything in anyway.
Very informative. Thanks a lot!
Amazing explanation 👏👏👏👏👏👏
This is great. Thanks!
Fantastic video! Super clear explanation of everything that most people just skip over. Really appreciate the detail!
New subscriber here! This really helped me on my studies. Thank you so much ❤️ looking forward to your other videos..
You're welcome :)
Have you been trading on stock?
I nvr comment on youtube videos.. Ur video was engaging and crisp.. Kp up the good wrk
Hello , helping video
Thanks Sir
What a logical explanation😎,superb
Thanks man!
Loved it !
Thanks!
excellent video. Really very useful for beginners.
So much better than the number 1 video for this topic. That's a thumbs up and subscribe from me.
8:34 It’s the S curve that should move to the right, reflecting more sellers. That in turn will drive the prices down. All in all, great video.
Supply is not increasing, the demand is decreasing because of fear (selling)
S H If you had shares in company X and you believed that the stock price is now overvalued, you would sell, right? If everyone did the same, the S curve would shift to the Right, Increasing supply
Yes that makes sense to shift the supple curve right
Because everyone is rushing to dump their shares, thus increasing supply
But even though the demand has increased due to more people selling (as more people would also be buying), the corresponding quantity demanded to a certain price would also have decreased due to larger supply, hence it would also make sense to move the demand curve to the left right?
Outstanding bro👍👍👍👍
You should upload more videos,you are great
Bro your videos are incredible. I want to start trading and your videos are very helpful up to a point . You keep it simple , graphics design awesome, and the voice . Keep going
Thanks so much!!
oh this makes me much clear about the stocks
thnk u
Excellent simplified explanation about how the prices are determined, I consider myself pretty ignorant with regards to the intrinsic value factor, super important now that I saw this video, can you create a video just focused on demystifying intrinsic value with a couple of deeper examples, something like using yahoo finance and their profile details on some stock e.g. APPL? Thank you for all your great information and hard work.
thank you
Clear as crystal
New subscriber 🙋🏽♂️ here to help on your road to 1000 nice channel keep it up !
Haha thanks man. Welcome to the club!
I can die in peace now! Thanks a lot for such a great and simple explanation frandddd
This is a great video! Great work.
Thanks!
This video is gem.
very conceptual video❤️❤️❤️
Great information... superb video... 👌👌
I have a question : How often do we calculate and update the intrinsic value of the stock in a year ????
U got a new subscriber. Sharing 👍
Other videos only talk about demand and supply but never bother to explain how demand and supply increase or decrease. This video has gone an extra mile in explaining the concept of free cash flow and intrensic value which basically is the driving force behind a stock value.
So from what just happened with GME, was the increase in share price due to the surge of buyers and the shorted stocks being settled at the higher price? And then the marketplace restricted public buys on platforms internationally. During this time hedge-funds continued selling between each over really fast on the exchange, stepping down the price gradually as it averaged against incoming public purchases? I’m a noob just interested what caused that particular price to change.
Thank you much
I think I understand. At 8:42, I can translate that directly to when im trying to buy stock from a brokerage when there's different types of orders (market, limit). My decision on a specific stock then gets calculated along with many other people's decision for that same stock and you end up certain transactions going through and certain ones not happening.
Great and interesting
Informative video! Where is part 2?
Great video brother, keep it up.
Thanks man!
Great information
helps so much
Ok, i understand many things, apart from
Like for example you mentioned that bidding takes place and buyer with 223 dollars will be sold stock and now 223 is the atock price,how does that bidding takes place, when as i open market to buy i can only purchase that stock at lets say 223 dollars, where is the bidding taking place here?
Great video.
One question
Does the price get affected by the value of the transactions or the amount of transactions
Great video! One question, do you have a video on how to determine future and intrinsic value?
Any book recommendations for beginners to further concepts learned in the video ?
Here you go: www.lumovest.com/reading-list/
Keep it up! Nice video
Thanks.
How do you calculate cumulative free cash flow
Well explained