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Technology Stocks : Apple Inc.
AAPL 280.65-1.2%Dec 4 3:59 PM EST
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To: Stock Puppy who wrote (170671)6/9/2014 3:37:58 PM
From: Ryan Bartholomew  Read Replies (2) of 213173
 
Psychologically is what matters since it influences human reaction.
Sure it matters in the short run, but earnings ultimately trump over time. If everyone was convinced that APPL was going to double earnings this year, of course it would shoot up even if there was no rational basis for the belief. But when earnings were actually known, if the belief didn't come true, it would adjust accordingly. So you can make an argument that irrational people will buy a stock at a lower price even through there's no difference in value after the split, and this psychology will drive the price up, but at best that's a temporary phenomena. I have yet to run into someone who invests less than $650 in a particular position, and while I know a few exist, I doubt they're very prevalent compared to the overall trade volume.
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