You buy and price falls,you sell and price rises!
Posted on Apr 18, 2010 under Sell Time Share |
One say’s “I bought “XYZ Company” at Rs.2200 and immediately after I bought the stock price dropped to Rs.2000.” I feel sad. Another comes with a different version “I sold “XYZ Company” at Rs.2000 and it went up to Rs.2400 same evening” I made an imaginary loss of Rs.400 per share.
Solution:
You can buy more shares @ Rs.2000 and reduce your overall buying cost. This has to be done only if believe in the fundamentals,management and the future prospects of the company.
To do this you need to keep money ready.whatever money you have and want to invest,split it into two parts. Then keep 50% cash aside, only invest with other 50%.So if need to buy more of any stock when the price falls you have ready cash.
Also now if you have 200 shares of XYZ Company 100@Rs.2200 and 100@Rs.2000.Then the price goes up to Rs.2400. Sell only 100 of the shares.Then if the price further shot up, you have some shares to sell And participate in the rally to make money.
Next You sold the share and the price went up. The solutoion to this is never sell all the shares at one time.Sell only 50% of your shares.So if he price goes up later you still have the other 50% to sell and make profit.
The golden Rule is to first do your own analysis of the stock before investing and buy on tips. Also invest only in companies which declare dividends every year. To be sure that you are not investing in loss making companies.
Every Market expert advices to do your stock analysis before investind in the stock market.
But nobody tells you how.
Well in my next article I will write about how to do stock anaysis using various tools such as financial ratios and by checking the track records of the comapnies you plan to invest in.
P.S: If you are not Indian then replace the Rs. into your own local curreny to understand the artilce 
Jigar Vikamsey
http://www.articlesbase.com/finance-articles/you-buy-and-price-fallsyou-sell-and-price-rises-3914.html
April 18th, 2010 at 1:34 am
Price Discrimination Questions?
1. Many pharmaceuticals produced in the United States are sold at lower prices in other countries than in the United States. Proposed legislation would allow drugs sold by U.S. firms in Canada to be re-imported to the United States at prices available in Canada. If such legislation passed, which of the following would most likely occur?
A. The prices at which pharmaceuticals are sold in the United States will fall to the levels that now exist in Canada.
B. The price at which pharmaceuticals are sold in the United States will fall, and the price at which they are sold in Canada will rise.
C. The profits earned by pharmaceutical companies will not be affected because their patents give them monopoly power in supplying many types of drugs.
2. The EarthCom Company prices its wireless service differently in the two market segments it serves even though the cost of adding a new customer is the same in each segment. Market research has shown that EarthCom can increase its profits by price-discriminating, rather than charging the same price to all customers. Currently, the extra revenue that EarthCom obtains from a monthly subscription is $25 in market one and $15 in market two. (Note that these figures are marginal revenues, not prices.) Which of the following statements is most likely correct?
A. EarthCom’s price-discrimination policy is probably maximizing its profits.
B. From the information provided, we can’t determine whether EarthCom’s pricing policy is maximizing its profits.
C. EarthCom’s price-discrimination policy is not maximizing EarthCom’s profits.
3. After the patent on a drug has expired, the same pharmaceutical is often sold for very different prices under its brand-name label and as a generic (even by the same company).
True or False: This practice does not constitute price discrimination because all customers have the opportunity to buy the lower-priced generic drug.
a) True
b) False
4. An advertisement for a motel chain says that if you stay for three nights at the motel you can stay a fourth night for free. This represents a 25% reduction in price for people who stay four nights. Which of the following statements is more likely to be correct?
A. This practice represents market segmentation for the motel. It lowers the price for people whose demand for rooms is more sensitive to price.
B. If the motel were filled to capacity, it wouldn’t run this kind of "sale" on rooms. This practice is just off-peak pricing, not price discrimination.
5. You own the Whitney Farm in central Iowa. You grow and sell corn as do all the neighboring farmers. You and your fellow Iowa farmers grow essentially the same corn, most of which is bought by ranchers as feed for their livestock. Your experience tells you that some ranchers raise livestock that eat only corn while other ranchers raise livestock that will eat a number of different grains. In other words, different types of ranchers have different demands for corn.
Which of the following is most likely to occur, assuming you are a profit-seeker?
A. You will charge a higher price to the ranchers who have a less price-elastic demand for corn and a lower price to those who have a more price-elastic demand for corn.
B. You would like to price-discriminate but you don’t believe that it will be feasible in a market in which there are so many corn farmers.
C. You will charge a lower price to the ranchers who have a less price-elastic demand for corn and a higher price to those who have a more price-elastic demand.
April 18th, 2010 at 6:36 am
1. B
2. C
3. T
4. B
5. B
there ya go.
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