I have always wondered about the stock market and the companies with the high valued stocks, Hereās the list of most expensive stocks in the stock market today. Does anybody even buy such stocks since the future value cannot be great and whats the use of buying this much stocks when you can buy more stocks from good growing companies.
Diversified, unmanaged index funds are what I invest in. The go with the market, as opposed to trying to beat it (which I compare to gambling). Thatās all I do along with a Roth 401K. Take that with a grain of salt, Iām hardly a financial guru.
Iām going to deconstruct your question because it shows a misunderstanding of how equities are discussed (maybe because of a language barrier?)
The list youāve linked to is high priced stocks, not high valued ones. Price can be discussed in absolute terms (stock ABC is $50) while value is price as a function of some other factor (stock ABC is trading below itās 200 day moving average or stock ABC has a PE ratio in the bottom quintile of itās industry). It doesnāt follow that high priced stocks are necessarily associated with companies with a high valuation (however you care to measure that).
Secondly, the price of a stock has no bearing on the future value of the stock. This should be easily understood as the price of a stock is simply the market cap divided by the number of outstanding shares. The price holds no information about the potential for future growth.
Lastly, there is no positive economic reason to split a stock but there used to be a strong negative reason not to. Before e-brokers took off (mid-90s), commission on a stock sale was based on the number of shares sold. To split a stock 10:1 meant your shareholders would have to spend 10x the amount in commission to sell their holdings. Buffet is on the record saying this was one of the rationales for not splitting BH. Also, (as of my time in college 20 years ago), there was no strong research showing a stock that split out-performed a stock that didnāt split over longer holding periods. You would see a small bump in returns when a split was announced but the overall returns would regress to the mean once the initial excitement had worn off.
Generally, a stock split is seen as a modest positive signal from the company that they continue to see growth in their future.
I think it was on a pod cast I listen to - but Buffet place a million dollar bet he would choose one stock and it would beat the best hedge fund portfolio after 10 years ā¦ I believe it was made in 2008.
Anyway the podcast host (I want to say it was EconTalk) asked the hedge fund manager how he was doing in the bet with his portfolio against Buffetās one stock - the manager said heās getting smoked by like 20% or something like that.
Oh hell yesā¦Please let this happen. 1911ās are my favorite. I would love to have several gov. surplus 1911ās. I bet they would compete well with the better makes of 1911ās and (hopefully) be cheap as hell. I would get one for every member of my family. That would be my whole familyās next Christmas present. I would clean each one up, make it purdy and everybody could carry a proper gun with one shot stopping power.
Iād like them to do this with the old government issue .357 mag too. That would make my day!