Stock Quotes

A stock quote in the financial market refers to the price at which a security is trading or has recently been traded. That is, the stock quotes are the latest prices at which the shares are bought or sold and the quantities associated with them. It is also called an asset’s quoted price. For example, the highest bid, lowest ask, and the most recent transaction price can be listed in a stock quote. There are basically two types of stock quoting-real-time and delayed. A delayed quote is free of cost in the US. But it reflects the market position 15-20 minutes ago. The range of the last trade or the quantity associated with a bid price is often reported by a stock quote. It is also known as a quotation. In trade, a price series for various quantities may be quoted. From here, we learn about the quantity discount, i.e., quote of a lower unit price for a large amount of quantity.

The most anxious people for the bid and ask quotes are the potential investors or sellers of the stock of a company. This is due to the fact that they are the ones who reflect the prices at which the stock can be bought or sold.

The official timings of the US stock market to remain open for trade are 9:30 AM to 4:00 PM EST, Monday to Friday. The price of the stock at 9:30 AM on an open trading day is known as open price. The trade between the close and open hours is called after hours (i.e., from 4:00 PM to 6:30 PM EST) and pre-market (8:00 AM to 9:30 AM EST) trading. The open price is often affected by the trading during these hours.

An investor must be aware of the common stock quoting terms that are mentioned hereunder:

Prior day’s close: It is the price of a stock at the closing time (4:00 PM EST) of the previous trading day.

High: It is the highest price at which the stock has been traded during the last trading day.

Low: It is the lowest price at which the stock has been traded during the last trading day.

Volume: It refers to the quantity of shares of a stock that have been traded during the last trading day. It is helpful in measuring the liquidity of a traded stock.

Average volume: It refers to the calculation of volume over an extended time period (usually a year).

Capitalization: It refers to the amount in dollars that equals the share price multiplied by the number of outstanding shares.

52-week high: It is the peak price at which the stock has been traded in the last 52 weeks (1 year).

52-week low: It is the lowest price at which the stock has been traded in the last 52 weeks (1 year).

EPS (Earning Per Share): It is calculated by dividing a company’s earnings by the number of outstanding shares.

Financial Investing

“Attempting to invest on the back of economic forecasts is an exercise in extreme folly, even in normal times. Economists are simply useless when it comes to forecasting. And it isn’t just growth that economists can’t forecast: it’s also inflation, bond yields, and pretty much everything else.” — James Montier, GMO

If you are wondering who James Montier is, he is one of the better stock pickers in recent years. James’ quote, as you can see, is pretty much to the point. Investors can no longer depend on economist to forecast the financial future.

What James did not say is that there is a reason for this lack of clarity in financial markets and the reason is easily seen in the diversity of the Global Business World. There are simply too many players in Global Financial Markets for economist to track. Add to this the political and cultural differences displayed by nations and you can easily understand why economic forecasting has become less than an exacting science.

If what I am saying here is true then the consequences for investors are significant. Think about it-the ‘old school of investing’ (Warren Buffet style) required some form of security price evaluation. In other words you simply did not buy overpriced securities and then expect to make a profit-the profit, in these cases, was made by the dealer who sold the securities in the first place.

So how is an investor supposed to proceed when ‘reliable forecasting’ has been thrown out the door? “Very carefully,” I would say. Having said that I am sure there are investors still profiting a great deal, there always are, but without some kind of reliable forecasts, financial investing is becoming more of gamble and less of an art form.

From a rationale standpoint the average investor is still best served by buying conservative, high earning securities and then watching those securities like a hawk. If all goes well and an investor does not get stopped out, it is possible to make a 10% or better annual profit. If that sounds too easy you are right-there is catch.

At the present time America is undergoing an unprecedented downturn in both interest rates and inflation. These low rates create a perfect financial environment for a Bull Market which thrives off of the ability to feed even the greediest of investors. Why would anybody want to put their money in a bank for 1 or 2 percent, if you are lucky, rather than in a relatively safe financial security offering 10% APR?

This is why financial markets are doing so well-they currently provide the highest rate of financial return. Most certainly a lot higher than banks or even high grade investment bonds.

Will this profitable investment trend continue? Absolutely not. Interest and inflation, by their very nature, are fluctuating financial entities. If you look at any long term interest chart and compare that chart with, let’s say, the DOW index, you will see a direct correlation between the value of the DOW index and interest rates. As interest rates rise financial markets eventually go down (usually sooner rather than later) and the same graphical comparison can be made with inflation figures.

If you noticed I just made a prediction. I suggested interest and inflation rates will have to rise. The truth is this forecast is relatively simple to get right as interest rates and inflation have nowhere else to go but up. Extending this forecast to financial market profitability then there is a very high probability, as interest and inflation rates rise, financial markets will go down-and as we all know financial markets do crash on occasion.

In essence I have told knowledgeable investors nothing they did not know, except perhaps the predictability of financial markets are becoming harder to predict and thus, for most investors, less profitable.

In closing I will urge anybody, who is new to investing, to seek professional guidance before risking any money in financial markets. I say this because, over the years, I have seen many professional investors go broke simply because they let greed rather than common sense guide their investment strategy-and if that implies profitable investing requires a great deal of self-control, you are right.

Jim Osborne is a retired programmer and Veteran living in New Mexico. Jim’s interest include writing, computers, investing, billiards and playing dominoes.

Jim’s favorite quote is by Jon Stewart…

“Living in the limelight, the universal dream for those who wish to seem. Those who wish to be must put aside the alienation, get on with the fascination, the real relation, the underlying theme — RUSH, Limelight; And now, here it is, your moment of Zen.”