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Old 09-30-2008, 11:31 AM  
ADL Colin
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Join Date: Feb 2001
Location: Tube Titans, USA
Posts: 11,929
It is not such a great mystery. Stock represent ownership in a business. All of you have corporations, right? When you set up those corporations you declared how many shares represented ownership in your business and most likely gave yourself all those shares. the value of those shares is the value of the corporation divided by the total number of shares.

Now for a public company the price can vary quite a bit from one day to the next or one year to the next. This is because the price that someone is willing to sell their ownership in the business is determined in a market. That price is dependent on many things such as their mood, how much they bought it for, what other opportunities there are, interest rates or ever what everyone else thinks that day. In the short run the demand and available supply of shares can determine the price.

But a company and it's shares have real value. For one thing a business can take the bare minimum needed in order to maintain the business and reinvest it back in the business. The company can then distribute the rest to the shareholders as a dividend. There's a value to that. Something people are willing to pay for.

Anyway, yesterday everyone was in a bad mood.
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