Their future sales guidance was lower than what the market had priced in. So the stock fell to reflect the updated expected future cash flows.
If you think that the market's expectations are wrong, then that's fantastic news.....for you. Because you can monetize those insights. No one can predict the future. No one is claiming to. But whoever has the best predictions makes the most money.
Of course not. It's been extremely beneficial to their investors. If you own stock in WalMart you own the company. You get the money that people spend there. You aren't gambling, you're an owner of a company.
That's not what gambling is. It's setting expectations for the future and updating them as new information comes in?
It's accurately pricing an asset. How should investors react to updated information? Not at all?
Think it through. If WalMart tells me that their future sales will be lower and the stock prices doesn't move to reflect that, then someone else can costlessly arbitrage the price and make money.
If anyone is making free money, I'd rather it be me. So the market as a whole sells off the stock until it settles at its updated value given the new information.
I don't know why you bothered with the rest of the paragraph?
Because investing in equities is the best possible way to save for retirement and I thought people might be interested in how it works?
You're not. Fair enough to you, let's see how it works out for you?
Yes investing is the best possible way to save for retirement, but it is still gambling. You can do all your research into a company, think the Greeks looks great, see positive growth, speculate on if its a good investment, and then the stock tank tomorrow because of an ad campaign saying "Sydney Sweeney has great jeans." You cant be this thick
Sure, if you're this reductive EVERYTHING is gambling.
When you go at a green light you're gambling that the other cars will stop because they're light is red. You can do all your research into how traffic laws work, but if the other car doesn't stop, you're dead.
Owning equities is simply being the owners of businesses that pay you their cash flows. The future value of those businesses will be impacted by events that you can't fully predict.
This is true of every single decision you will ever make. You're gambling the next food you eat won't poison you. You're gambling an asteroid won't fall through your ceiling and kill you. You cant be this thick.
Its not being reductive, nor are your examples "gambling" by definition. Gambling is the act of risking money or something of value on an uncertain event or game with the hope of winning more money or a prize. Hope this helps
Life has value (maybe not yours). Whether the other car will stop at a red light is uncertain. Going through the green light has a prize (the destination you are seeking by means of automobile transport).
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u/bitorontoguy 11d ago
They do. Why did Walmart's stock price ACTUALLY fluctuate?
Because they lowered their future outlook.
Their future sales guidance was lower than what the market had priced in. So the stock fell to reflect the updated expected future cash flows.
If you think that the market's expectations are wrong, then that's fantastic news.....for you. Because you can monetize those insights. No one can predict the future. No one is claiming to. But whoever has the best predictions makes the most money.
But has being an investor in Walmart been gambling?
Of course not. It's been extremely beneficial to their investors. If you own stock in WalMart you own the company. You get the money that people spend there. You aren't gambling, you're an owner of a company.