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Old 07-26-2008, 01:09 PM   #1
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Howdy from the great State of Texas..Swore off individual stocks back in 2000 or 2001 whenever I lost quite bit of money..Well gonna give it a try again..First question..

I don't really understand where all these shares are..If I own stock in company ABC and something really big happens that drives the price up say 20% on some big announcement where do the shares come from that people buy within minutes after the announcement? I'm told that for every share sold a share must be bought and vice versa but people don't normally list their shares to be sold at a upper limit price when selling..I understand the use of a limit price when buying but how does someone buy shares within 20 minutes of an announcement that causes the value to go way up..Most shareholders don't even know abut the announcement at that time so how could they possibly have shares for sale at the much higher value?
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Old 07-26-2008, 01:48 PM   #2
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Welcome aboard lawman. Care to tell us a bit more about yourself?

Pros in the management of Mutual Funds is one place for certain and individual investors like myself who put in standing order to sell when we have a certain increase. Also, the daytraders hop in on good news and out again with a modest upside. The buyers who are late to the party get to hold the bag if it drops right after a run up.
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Old 07-26-2008, 02:38 PM   #3
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Welcome aboard lawman. Care to tell us a bit more about yourself?
Sure, I'm 52 years old, retired from the Houston Police Dept. and am now a precinct constable in rural East Texas..The wife works in public education and only child is grown..I am not optimistic about the prospects of this economy..I think for the first time the next generation will have lower standard of living than the previous..I think inflation is in the early stages of some serious destruction to all of us and I think the energy crisis is real and will get worse but is a problem that can and will be solved but not for at least 15 - 20 years. I am very conservatively invested with only 30 % of my portfolio in stocks..My philosophies closely parallel those of Stephen Leeb and I think the only money to be made in the U.S. stock market for the next few years will be for those who will be the lucky few who buy in at the dips and sell at the temporary upswings..There is still money to be made for those who know how to profit from the ever decreasing supply of oil for an ever increasing demand by the developing nations such as India and China. Commodities and precious metals will go even higher than present levels..The best defense will be to posture yourself for high inflation and consider stocks as specualtion..I've bought some lately and will buy more within the next few months..I will buy SPY and oil futures on any big dips..If the dips don't come I'll watch inflation claim my cash..My largest holding is I-bonds..
Nice to be abooard and I look forwrd to enjoying this DB..
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Old 07-26-2008, 03:54 PM   #4
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Howdy from the great State of Texas
Sounds like Aggie-talk to me.

Welcome here lawman.


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Swore off individual stocks back in 2000 or 2001 whenever I lost quite bit of money..
Me too. Only own one stock and I plan on bailing out before 1-1-09. I'm now a diehard passive investor looking to the long term for all of the benefits of equity ownership and none of the grief.
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Old 07-26-2008, 05:50 PM   #5
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Howdy, lawman! Welcome to the forum.
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Old 07-26-2008, 06:34 PM   #6
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Old 07-26-2008, 07:05 PM   #7
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Old 07-26-2008, 07:08 PM   #8
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Old 07-26-2008, 07:31 PM   #9
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...where do the shares come from that people buy within minutes after the announcement? I'm told that for every share sold a share must be bought and vice versa but people don't normally list their shares to be sold at a upper limit price when selling..I understand the use of a limit price when buying but how does someone buy shares within 20 minutes of an announcement that causes the value to go way up..Most shareholders don't even know abut the announcement at that time so how could they possibly have shares for sale at the much higher value?
Crazy Connie got most of it, but I would also point to what are called Market Makers and/or Specialists. Market Makers are firms that have seats on the exchanges that provide liquidity in a certain stock by always standing ready to buy or sell in that stock. If a buyer or seller can't find someone on the other side of the trade, they can always go to the MM or Specialist and make the trade. They work differently on the different exchanges, and that's about all I know, but you can read more here.

What is a Market Maker and How do Market Makers Make Money
Market Maker
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Sure, I'm 52 years old, retired from the Houston Police Dept. and am now a precinct constable in rural East Texas.
It looks like we're former co-workers. I sent you a PM introducing myself, even if we don't know each other we probably have seen each other somewhere over the years in court or dropping someone off at the back door of 61 Riesner.
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Old 07-26-2008, 07:44 PM   #10
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but how does someone buy shares within 20 minutes of an announcement that causes the value to go way up..Most shareholders don't even know abut the announcement at that time so how could they possibly have shares for sale at the much higher value?

Because for every dupe stock buyer chomping at the bit to escape unharmed there is a mark looking to-get-rich-quick for a bargain. This is known as the "looking for a greater fool" method of investing -- a very popular form of entertainment.
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Old 07-26-2008, 07:59 PM   #11
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Leonidas,

I tried to answer your p.m. did you receive it?
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Old 07-27-2008, 01:47 PM   #12
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Howdy, since you are a lawman, perhaps you could set me straight on what I think may be a pack of lies! about Texas, that is. Fire ants, excessive heat, gully washers, dull scenery, must be all lies to keep Texas for Texans? I had lunch on the train with a lady from Houston. After I mentioned that someday I plan to take the train ride all the way across the Lone Star State she said, yes it really does take more than 24 hours but trust me, you really don't want to do that!
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Old 07-27-2008, 02:04 PM   #13
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Real Texans ALWAYS discourage visitors from other states...We're really not into this cultural diversity thing too much you see..
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Old 07-29-2008, 04:27 PM   #14
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Leonidas,

I tried to answer your p.m. did you receive it?
Yes, I'll reply before I log off today.
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...After I mentioned that someday I plan to take the train ride all the way across the Lone Star State she said, yes it really does take more than 24 hours but trust me, you really don't want to do that!
Across the state, VIA Train? Man, I think you have to measure that in days rather than hours. I took a train from San Antonio to Houston once...the actual trip was only about 5-6 hours, but after factoring in delays at the station, it took a little over 13 hours. From the Golden Triangle to El Paso? That's got to be a couple of days. Heck, it's probably a 20-24 hours trip VIA car. Maybe less now since the speed limit goes up to 80 once you get about 50-60 miles West of San Antonio.
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Real Texans ALWAYS discourage visitors from other states...We're really not into this cultural diversity thing too much you see..
Plus we are trying to save the poor dears from the perils that might befall them here.
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Old 07-29-2008, 04:36 PM   #15
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I don't really understand where all these shares are..If I own stock in company ABC and something really big happens that drives the price up say 20% on some big announcement where do the shares come from that people buy within minutes after the announcement? I'm told that for every share sold a share must be bought and vice versa but people don't normally list their shares to be sold at a upper limit price when selling..I understand the use of a limit price when buying but how does someone buy shares within 20 minutes of an announcement that causes the value to go way up..Most shareholders don't even know abut the announcement at that time so how could they possibly have shares for sale at the much higher value?
Every stock has a book of standing orders from market makers, the big mutual funds, etc. For example, a stock such as GE trading at 29.00 might have a buy-side book of 1000@28.99, 1500@29.98, 15000@29.97, 20000*29.96, etc. If an announcement causes a sudden flood of market sell orders for 200,000 shares, that might take out all standing orders down to 28.90, dropping the 'last trade price' down to that level.
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Old 07-29-2008, 09:34 PM   #16
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I am not optimistic about the prospects of this economy..I think for the first time the next generation will have lower standard of living than the previous..I think inflation is in the early stages of some serious destruction to all of us and I think the energy crisis is real and will get worse but is a problem that can and will be solved but not for at least 15 - 20 years. I am very conservatively invested with only 30 % of my portfolio in stocks..My philosophies closely parallel those of Stephen Leeb and I think the only money to be made in the U.S. stock market for the next few years will be for those who will be the lucky few who buy in at the dips and sell at the temporary upswings..There is still money to be made for those who know how to profit from the ever decreasing supply of oil for an ever increasing demand by the developing nations such as India and China. Commodities and precious metals will go even higher than present levels..The best defense will be to posture yourself for high inflation and consider stocks as specualtion..I've bought some lately and will buy more within the next few months..I will buy SPY and oil futures on any big dips..If the dips don't come I'll watch inflation claim my cash..My largest holding is I-bonds..
Nice to be abooard and I look forwrd to enjoying this DB..
I'm with you on that to a large extent.

I made a fair amount of money following Leeb's advice on energy stocks a few years ago. I subscribe to his newsletter (and get a lot of annoying e-mails from his people trying to sell me more of them).

A lot of what is going to happen will depend on whether it produces inflation or deflation.
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Old 07-30-2008, 05:47 AM   #17
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....Across the state, VIA Train? Man, I think you have to measure that in days rather than hours. I took a train from San Antonio to Houston once...the actual trip was only about 5-6 hours, but after factoring in delays at the station, it took a little over 13 hours. From the Golden Triangle to El Paso? That's got to be a couple of days. Heck, it's probably a 20-24 hours trip VIA car. Maybe less now since the speed limit goes up to 80 once you get about 50-60 miles West of San Antonio.Plus we are trying to save the poor dears from the perils that might befall them here.
"Perils that might befall them"? Enron! Thanks, guys, I'll keep this info under my hat but Texas has gone to the top of my "to visit" list.
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