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Trading 101: What “Directly” Affects a Stock’s Price? - YouTube
Channel: ClayTrader
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what directly affects a stock's price
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what is gonna cause this price to move
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let's talk about that a little bit
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deeper here before we get into this
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video down below I've done a video
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entitled you know how was a stock price
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determined and you can go and watch that
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if you want but you know that video
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essentially in a nutshell is supply and
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demand when people want shares when
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people want stock and a lot of people
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want it prices will go up when people
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don't want it when people you don't want
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to sell what they've already owned and
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bought then that's where prices are
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gonna go down but I got this question on
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a youtube comment and it's it's pretty
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much asking I think another layer deeper
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so going down another layer in terms of
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you know what is actually you know
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directly affecting a stock and it's
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pricing yes again overall supply and
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demand when people want something it's
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gonna go up in price when people don't
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want it it's gonna go down in price it's
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gonna go down in value but what is
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actually directly affecting this so
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let's first get to this comment and then
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you know we'll get into hopefully me
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being able to describe this at a little
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bit more of a narrower level now this
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person says a lot more but I want to
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just kind of focus on one comment in
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particular they say does the revenue of
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the company directly affect the stock
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price this whole concept is there's a
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lot of gray area because now that brings
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up the question well how are you
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defining directly what do you mean by
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directly affecting and at its core I
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like the way this was phrased because it
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brings up a dynamic of the market's
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revenue and revenue is just pretty much
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how much money a company is generating
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not the profit but this is not an
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accounting class but just how much money
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is a company generating from its sales
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and on this this being a piece of paper
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you know you have all sorts of documents
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that that companies have associated with
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them now you have balance sheets you
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have cash flow statements and you have
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lots of other different things that tell
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you about a company tell you how a
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company is doing
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and the persons question is all right so
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in this case you know revenue but you
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could definitely fill in the blank with
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any of these other things is that
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directly affecting the price no it's not
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directly affecting the price it is what
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it isn't and this is where I don't know
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quite understand what this person is
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saying by directly but I do know what
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they're understanding but my point here
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is the thing that is ultimately
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directing the price and affecting the
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price is not and I kind of lied I guess
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in the video I refer to down below
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because I was saying it's all about
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whining
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people not whining supply and demand
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there's actually another layer that
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encapsulates both supply and demand you
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know and then revenue and that is just
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called one word perception meaning what
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do people think about the revenue what
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do people think about balanced cash flow
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all of that what do people think what do
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people perceive about what they think
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may happen in the future as far as
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growth or maybe not growth that is
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what's actually affecting the stock
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price because with somebody's perceiving
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or with somebody's perception what
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they're perceiving what's that gonna do
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well that's gonna go and then that's
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where the demand may come from or if
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they're not you know their perception is
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what they're perceiving implies that's
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where maybe the supply is coming from or
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in other words people lining to sell and
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that's where prices would go down so
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it's all about perception does revenue
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directly affect it I would say no it
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doesn't directly affect it what directly
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affects things is the perception because
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perception is then going to cause people
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to go and make choices that are either
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creating demand or supply for that stock
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and to pay based on that that is where
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the price and what is going to affect
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the price comes from revenue all this
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sort of stuff it without doubt plays a
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role but is it the direct effect
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Howard argue no and we could probably
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get into a big semantics and
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philosophical argument about this
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and I'm aware of that but I mean as far
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as just trying to keep remembering this
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is in the trading 101 section of the
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site so this is not like some sort of
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I'm not trying to make this overly
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complicated but just answer these sorts
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of questions in terms of directly
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affecting the price at the end of the
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day it's all about perception how people
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perceive revenue quick little example
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and you know you can do this if you want
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but what I like to do is you know a
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company will release their earnings and
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I will go down and read through things
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and say oh well geez I am perceiving
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that as that sounds good that sounds
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good and then you watch the stock that
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day and the price goes totally down well
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which is the case well revenue was good
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you know the cash flow was good the
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bound statement was good but then the
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price goes and does something totally
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else well that is because the perception
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of what I'm seeing my perception is
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different so everybody's perception is
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going to be different and that's what
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makes a stock market such a fascinating
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thing it makes it the ultimate game upon
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games because it's who's best at
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perceiving what is actually going on
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revenue was just a number but how that
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number is perceived is what's gonna
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dictate demand what's gonna dictate
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supply and that's what's gonna autumn ly
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dictate you know how a price unfold so I
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don't know if I answer the question I
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think I did but it's a hard question but
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revenue all this stuff directly no it
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does not directly it plays a role at the
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end of the day it's all about perception
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and how people are perceiving revenue
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and the other dynamics within the market
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if you're out there trading alone
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currently and maybe are in the market
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looking for a community to join to
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assist you in your trading or to just
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help you you don't give you another set
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of eyeballs then I do have a private
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trading community where you can trade
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alongside me and other experienced
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traders so what you see popping up on
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the screen right now is both an
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information link so if you click on the
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inner circle one that is going to take
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you to the page where I explain all the
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details of what exactly come with the
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community both the chatroom and the
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newsletter and then the other image that
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has popped up is a behind-the-scenes
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tour where you can see exactly what is
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going to you know be contained within
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the community I take you through like I
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said a behind-the-scenes tour of
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everything and that way you'll know
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precisely what you are getting you know
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when you join so definitely check that
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stuff out if you are interested
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and thinking about you don't want it to
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join a community and let me know if you
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have any questions
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