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I've been told that stock/share value is 100% controller by supply/demand -- nothing more/less.

Financial history of the company is supposedly zilch -- so is any profitability/etc.

Basically, companies trading at sky-rocketed prices can have dirt-poor financial caps -- and super-profitable companies can trade for pennies on the mark. It's supply/demand based on a myriad of reasons -- not all of which are related to company performance but investor expectancy.

Given such, past or future projecting of company performance is not a guarantee for a high value stock. What determines price is only the equilibrium between buyers and sellers outstanding. If someone is buying more than selling, the difference is reflected in higher shares -- and vice-versa.

The true way to get your shares to go up would be to assure people buy at alarmingly higher rates than they sell -- not about whether a company does good because that's just one factor. Correct?

Given such, one would need to worry about more investors buying the shares they are holding -- not about how well the company does (unless they are sure this will lead to more buying).

In this figure, one can never know what can drive buys/sells in every case. I could tell you that some guy bought shares in "Golden Goose Drunkards" because he thought their logo was cool -- that's it; or maybe he liked the name. If other people follow along, the shares are worth more.

Given such, how can we reliably predict or help assure ourselves higher demand of our shares?

Charge of Coats
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What you’re ignoring is that stock market analysts are pretty good and pretty influential, and so supply and demand for a stock are largely driven by the company's financials. Not its financial history, which is irrelevant except as a forecasting tool, but its projected financial future. So it’s best to act as if the stock price depended directly on the financials, even though it technically doesn’t, because it works just the same as if it did.

Mike Scott
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  • Isn't that a pipe dream though? If people largely believe that buying more in to the idea that the company will be worth more in the future when it's technically only worth more by demand, it's indirectly increasing its value in a non-proportionate way -- ergo, analysts technically do nothing but play Simon Says and line their pockets because people listen to them. Value is by demand by far -- not by corporate success. – Charge of Coats Nov 20 '17 at 07:17
  • The smart thing to do would become a "stock analyst" to profit from stocks, based on what I figure. I can't speak for any other investor, but I invest solely because I want a stock to be worth more -- not because of how good/bad a company does. I just hope that others think the same thing more often than not. – Charge of Coats Nov 20 '17 at 07:18
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    @ChargeofCoats You’re forgetting about dividends. Most of the future value of owning a stock is in the dividend stream, not in the current stock price. A company increases in value by sustainably increasing its dividend, not by increasing its stock price. – Mike Scott Nov 20 '17 at 07:19
  • True only in the case of shares that pay dividends -- all don't. When there's no dividend, the prize lies in the demand of the shares you hold. So you hope others follow suit and think alike so everybody in it wins it. – Charge of Coats Nov 20 '17 at 07:20
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    @ChargeofCoats Even for stocks that don’t currently pay dividends, their value is based on expectation of future dividends. There’s no such thing as a for-profit company that plans to never pay a dividend of any kind (including share buy-backs, which can be a more tax-efficient way of sharing profits with shareholders) at any time. Paying dividends is the purpose of for-profit companies. – Mike Scott Nov 20 '17 at 07:21
  • Some never pay dividends and as such people will cross their fingers and hope the steady growth becomes worth it sometime in the future since you have nothing else to hope for. Dividends aren't all. – Charge of Coats Nov 20 '17 at 07:23
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    @ChargeofCoats No, they don’t currently pay dividends. A company that will never pay a dividend is worthless. – Mike Scott Nov 20 '17 at 07:24
  • Not if its value increases and provides meaningful future growth potential for generations of investors who'll buy/sell. A corporation doesn't need to issue dividends to be worth anything -- otherwise, why are people buying in to many now and prices reflecting such? Obviously, demand is there regardless. – Charge of Coats Nov 20 '17 at 07:25
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    @MikeScott "A company that will never pay a dividend is worthless" Not in all cases. Dividends are the most common cash flow source for stockholders, but companies can grow without paying dividends, and you can realize the value of owning stock from a future buyout or merger. – D Stanley Nov 20 '17 at 14:33
  • @DStanley But if a company will never be in a position to pay a dividend, no one will buy it. It's only the ability to pay a dividend at some future time that makes a company worth buying, even if it never actually does pay a dividend. – Mike Scott Nov 20 '17 at 15:19
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    @MikeScott I'm saying a buyout can be an alternative future cash flow. If you own 1% of a company that gets bought for $1M, you still get $10K in some form. A dividend isn't the only way to realize an equity investment. – D Stanley Nov 20 '17 at 15:29
  • Also realize that a dividend reduces the value of a company by the same amount. Companies grow (increase value) by buying and utilizing assets, not by increasing dividends. – D Stanley Nov 20 '17 at 15:31