1. The price and the value of a stock are different
Price = how much you pay
Value = what stock is worth
Buy when Price < Value
Sell when Price > Value
The question in investing is determining the value
What is the value of a tree?
Fruits?
Cost of seed?
Value as firewood?
The price of a stock is forward looking.
It reflects the "vote" of investors. If investors believe the company will make more revenue and profit IN FUTURE, the price today will go up even if the company has no profits TODAY.
The stock market is a voting machine.
Over the long-term, the value of the company will reflect the earnings of the company.
Value and earning will correlate unless the company grows future revenues by
Acquisition
Internal reorganization to cut cost
External laws that favor company
1. educate yourself on how money works.....read about money, investing, budgets, etc.
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2. calculate how much cash you have to pay bills if you lose your job, get a figure in days/months. Have a plan to save/extend that figure as much as possible. for example, if you have just 1 week of "emergency funds" have a target to extend it to three months.
3. cut down on unnecessary spending, get a budget, stick to it.
4. Look for multiple sources of income, if you have 2 cars, start a private Uber, if you have a free boys quarters, rent it out, monetize your assets.
Chile is Capitalist ie free markets; target is equal opportunities
Venezuela is Socialist ie government controlled markets; target is equal outcomes
Chile is now richer than Venezuela who has probably the largest deposits of crude oil globally. Riches not based on crude oil.
NO government can create a job...ONLY the private sector can...all the government can do is redistribute .
Socialism has never made any nation rich, please note a capitalist nation can have an extensive social welfare programs eg Denmark, that does not make them Socialist.
"Socialist" government are governments that set prices eg for petrol, that own economic assets eg NNPC & even influence economic decisions like setting exchange rates for the economy.
The worst mixture is a Socialist government that is pursuing a welfare agenda like Venezuela