money guidance and how to get rich_180

_{If a company's profits keep growing, its stock price will follow suit}

_{— eventually. Corporate earnings drive stocks in the long run. In}

_{the short run, though, there are many different reasons stock prices}

_{flitter up and down. Some of these reasons matter and some don't. It}

_{does help, though, to understand the factors that can move a stock.}

_{Some things that move stocks that matter to us Fools:}

_{• The company's latest earnings report. Strong and growing earnings}

_{and profit margins may push a stock up, while rising debt or inventory}

_{may depress it.}

_{• New products or services. Positive media coverage and strong market}

_{acceptance are cause for stock appreciation, while sluggish sales}

_{foreshadow depreciation.}

_{• Earnings report pre-announcement. If the firm expects to underperform}

_{Wall Street's quarterly earnings estimates significantly,}

_{expect the stock to fall. If the firm hints of outperformance, expect}

_{a rise.}

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_{• News about the company's ongoing business operations. Landing a}

_{monstrous new, long-term contract bodes well, as does news that}

_{the company's methodical global expansion is proceeding at a rate}

_{15% ahead of plans.}

_{Some things that move stocks that we Fools ignore, or even chuckle at:}

_{• Gurus on television or in financial magazines speculating that a company}

_{might be bought out at a premium price.}

_{• Company insiders selling some shares.}

_{• Soothsayers divining future stock prices by looking at charts of price}

_movements.

_{• Crowds of people snapping up shares of "hot" stocks without understanding}

_{the industries involved.}

_{Remember also that stock prices often rise or drop on rumors or hype}

_{— or for no reason at all. Perhaps a bird flapped its wings extra hard}

_{flying over the Zambezi River in Zambia and that set off a domino-like}

_{chain of events, eventually leading to people buying more shares than}

_{usual of a stock this morning. (This is a rather remote possibility, but}

_{hey — you never know.)}

_{Sometimes stocks will also rise or drop just because other stocks in the}

_{same industry are rising or dropping. And if most of the market is}

_{slumping or surging, it will take many stocks along with it for the ride.}

_{Don't sweat these small day-to-day moves. Focus on quarterly and annual}

_{earnings performance and the growth of the business over the}

_{next few years. Short-term pricing on the stock market can be irrational,}

_{but long-term values are driven by business growth.}