Yahoo shares jump

[the_raven_group]

Shares in interent search engine giant yahoo jumped 9pc in New York today following news of a renewal of take over talks with Microsoft. There is one comdition to the renewal of talks however and that is the replacement of the entire yahoo management board.

[liowkc]

Icahn was making another attempt to oust the whole yahoo board. Another reasons for the spike in prices is due to analysts' buy recommendation.

[hwang]

Wow...9pc is quite a lot. Usually news like these will cause price to jump in the extreme. Good for the people holding Yahoo shares.

[Llamalord]

The problem is do they sell now or hope that it goes up more and more... until the talks stop and microsoft leave the picture just to see their shares drop

[hwang]

Hmmm...usually it's short-term investor here that is doing the quick buying and selling. But if you are long term investor one will forecast years ahead and to them, it's worth buying cause it might increase further with good prospect.

[the_raven_group]

Thats why i never understand why people sell shares when they are falling. Really its the best time to buy and then you can sell them all for a quick profit. Just my personel opinion and i'm no millionaire.

[liowkc]

It is called the herd instinct and when panic takes place, everyone sells and the bear market comes into play. Remember that the stock market is a zero sum game when somebody has to lose for another to gain.

[hwang]

Most of them buy on margins which is why when the market is falling, they have no choice and the broker will automatically sell on their behalf to close the trade.

[the_raven_group]

so if you do the buying and selling yourself there is a good opportunity to make money when shares drop by a large margin or do i not understand the financial market at all?

[liowkc]

If you bet right on the direction of the price movement, sure you can make. The adage: buy low sell high is very easy to grasp but the problem lies in what is "high" and what is "low".

[hwang]

Not exactly. When you say margin trading, it's about controlling larger amount of money using a certain amount of deposit as security. Some broker allow and provide you with the option but if the shares go different direction, they will automatically sell it off to protect their own interest.

Originally Posted by the_raven_group

so if you do the buying and selling yourself there is a good opportunity to make money when shares drop by a large margin or do i not understand the financial market at all?