How is the Stock Price Determined? | Stock Market for Beginners (Part 1) | Lumovest

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How is the stock price determined? In this video, we'll explain how the stock price is calculated in simple terms and take you through the logic behind how everything works. This is perfect for stock market beginners who want to learn investing. People will tell you that the stock price is determined by market supply and demand, but that's really vague. For example, what's guiding how much people supply and demand for a particular stock? The truth is, it really comes down to the intrinsic value.
Let's establish what the stock price is. The headline stock price we see quoted in the stock market is the price at which the latest stock transaction occurred. It's not the price at which you can buy the stock but the price at which the last trade happened.
Buyers of a stock determine how much they're willing to pay for a stock by calculating the intrinsic value of the stock. Likewise, sellers will do a similar exercise to determine the price at which they would sell. And when both the buyer and seller agree to a price, they make a trade and the stock price changes to reflect this latest price.
Therefore, intrinsic value is the guiding force of the stock price.
ABOUT LUMOVEST
Lumovest is an online school that teaches finance, accounting, and investing. We teach you how to analyze businesses and securities like how it's done at the world's top investment banks and private equity firms.
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Опубликовано:

20 сен 2018

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Комментарии : 755

@Lumovest 5 лет назад

Hey guys! Do you now understand how the stock price is determined? I hope so. If not, tell me where you're stuck and I'll try to clarify things for you.

@triestodrum2215 5 лет назад

Have the shares in your company went up after this informative video? Lol

@dandagerman6604 4 года назад

Here's a great question I'd love to see some thoughts on, "Priced in." Ok, how? Why can't I find information explaining how news or uncertainty has been priced in? Do a buyer and a seller agree on the "priced in?" A price is never set by just one party, it takes two, does "priced in" mean "ignored." It was priced in they say, ok, how, what happened, where can i see this?

@danilocmsm 4 года назад

If a company doubles its worth buy developing and selling a new product while all of the shareholders stop selling them, is it possible for the price of the share to increase?

@jackcheung4301 4 года назад

Unlimited QE by the FED will change everything in anyway.

@dandagerman6604 4 года назад

@Chris yes, already considered in the past, or "ignored." I wish people would quit saying "priced in," price is numbers and numbers are a system of measurement. It makes it sound too fancy lol

@AmbroseSinclair-yn8rl День назад

What is the best strategy to succeed in the market now for someone with more or less than $7k

@BenjaminHayes-ok5gn День назад

You need a pro or someone good at navigating the market. Someone like Jared Brian Watkins

@EmmaRodriguez-nf7vq День назад

Almost gave up due to constant losses, but Jared turned my luck around

@OliviaPeterson229 День назад

Leveraging market changes is a remarkable talent Jared has

@JordanTran850 День назад

My monthly yield with Jared is crazy high. I finally quit my 9 - 5 last month

@AmbroseSinclair-yn8rl День назад

In what way can I getthrough to him

@HugoBergmann-lu4nd Месяц назад

Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.

@StacieBMui Месяц назад

Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.

@cowell621 Месяц назад

Uncertainty... it took me 5 years to stop trying to predict what’s about to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.

@LiaStrings Месяц назад

Could you kindly elaborate on the advisor's background and qualifications?

@cowell621 Месяц назад

The advisor that guides me is Sonya lee Mitchell, most likely the internet is where to find her basic info, just search her name, She's established.

@crystalcassandra5597 13 дней назад

I looked her up, and I have sent her an email. I hope she gets back to me soon. Thank you

@vmkkannan 4 года назад

Really clear explanation about how stock price changes. i have seen around 50+ videos on the same topic, but this is worth watching it.

@Lumovest 4 года назад

Thanks for the kind words!

@define7433 3 года назад

It has a lot to do with people who don't really fully understand what they are talking about lmao

@mansisrivastava0001 3 года назад

Exactly

@ericm9305 3 года назад

Impressive.

@jack-gf6jw 3 года назад

This video is perfect for people who don't understand the stock market at all cuz this is literally all that matters with the stock market determine if it's a good price and if so buy. Not complicated once you understand what causes the price changes.

@AnishStocks 4 месяца назад

This is the only video which actually explained technically that why does the stock price changes & in which direction. Thank you very much Sir!

@utilityunified8114 4 года назад

Best Videos on Stock Market i ever watched...thanks from India, lotsa love !!

@Lumovest 4 года назад

Thanks for the support!!

@johnyhawkahsan 3 года назад

Best video on stock market ever. Before this whole explanation of "future value" and "intrinsic value", I thought stock market was just a gamble but now I understand how the price of a share is really determined.

@mathiasbrekkan4826 4 года назад

I'm trying to get my girlfriend started with investing and she gets fed up when I start babbling about philosophy, understanding P/E ratio, understanding revenue, earnings, eps, ROIC, NOPLAT, dividends and so on... This video was very well put together easily and straightforward explained, with good animations!

@mathiasbrekkan4826 4 года назад

And very helpful for her!

@Chris-ci8vs 4 года назад

@@charlesludwig9321 he clearly answered yes :P

@mathiasbrekkan4826 4 года назад

Charles Ludwig she's 16

@karinajabonska4436 4 года назад

Change your girlfriend

@JenghisMusic 4 года назад

finally what im searching for

@mahsadoorfard3202 3 года назад

I learned a lot. Thanks for simplifying everything.

@clashwithbidhant4853 4 года назад

Thankyou for such a great knowledgeable talk about stock market.

@Lumovest 4 года назад

Support from generous fans like yourself make this possible!

@mayurwalvekar 5 лет назад

I appreciate your conceptual clarity..!

@Lumovest 5 лет назад

Hey Mayur, thanks for watching!

@saddestdayever1276 2 года назад

Really clear explanation on stock prices! I am an accounting student and I am currently taking Intermediate Accounting 2 and I just couldn't figure out how stock prices would be accounted for and how much cash is going to be received! Thank you so much!

@lamemeshitface 4 года назад

Recommendation: Add subtitles for beginners to better understand along the way :)

@bringeshchowdavarapu7872 3 года назад

@ZA-sy7dn 4 года назад

All my life I’ve been interested in the stock market but not understood or had stupid explanations, this is the ONLY video I’ve ever seen that has been useful. Well fucking done mate b

@taoyuanheng7088 4 года назад

i definitely recommend this video to my friends🤗. Awesome.

@ebrahimalabadi3328 4 года назад

Thx man for explain how stock market determine and also fluctuates !!

@cccsss123 4 года назад

To be honest, I was shocked that this channel only has 41.6k subscribers , with these contents, I thought this channel already have 100k+ subscribers. All the best! Im sharing them!

@Lumovest 4 года назад

Thank you!

@firdaushbhadha2597 3 года назад

Easily the best explanation I have seen.

@pustiinovalex7157 4 года назад

I THANK YOU SO MUCH!!, THAT'S WHAT I'VE BEEN SEARCHING FOR A LONG TIME

@1993meet 2 года назад

Thanks for this simplified explanation.

@balajitr9499 4 года назад

Best video I have seen in recent times , great work !!

@bardacha100 4 месяца назад

Clearest video of all times ! Many Thx

@colleen.odegaard 7 месяцев назад

The market is more volatile than ever. I've been holding cash since '20 pandemic crash, but just went "all in" bought up $250k worth of ETF's & individual stocks at discount, and hoping to average down on ailing companies, , open to any recommendations that come in handy

@velayuthman 7 месяцев назад

this is quite huge ! much more info needed please, what did you invest in?

@velayuthman 7 месяцев назад

excellent share, just inputted her full name on my computer and searched online, top-notch credentials. Ive seen commentaries about advisers, but not one looks this phenomenal

@arnabhai3629 4 года назад

Your presentation and the marketing strategy at the end tells how good you are at commerce and economics. I am glad to see good content from experts like you

@Lumovest 4 года назад

Haha and your supportive words tell how kind you are. Thank you :)

@whodat1624 3 года назад

One of the best videos I've watched on stocks

@miguelcrespopetao8828 4 года назад

This gotta be the new youtube financial GOAT. Very clear explanation sir 👍🏻

@thephoenix2533 4 года назад

Thank you so much for this video.

@Adrian-cn5rk 11 месяцев назад

This was done beautifully. I made the exact same Google search, thankfully i found this video!

@lucaseastman1877 Год назад

This video finally put everything together for me. I wanted to know how this works so I could simulate it myself, but I could not find a reliable answer anywhere until I found this video. Thank you. :D.

@rafsanlazim5515 4 года назад

Absolutely loved this video

@joanahicks8501 2 года назад

Awesome video.....I would love to hear of some examples where your 'investments' haven't paid off or have fallen through and how you managed it and what you learnt from it. I think that would be really helpful!

@Sonu-pb8ec 4 года назад

Made-easy.... looking for more.

@Lumovest 4 года назад

More will be coming! And there are also hundreds of videos on our Lumovest website :)

@AkshayVasandani 3 года назад

Other videos only talk about demand and supply but never bother to explain how demand and supply increase or decrease. This video has gone an extra mile in explaining the concept of free cash flow and intrensic value which basically is the driving force behind a stock value.

@IndefiniteMark 3 года назад

So from what just happened with GME, was the increase in share price due to the surge of buyers and the shorted stocks being settled at the higher price? And then the marketplace restricted public buys on platforms internationally. During this time hedge-funds continued selling between each over really fast on the exchange, stepping down the price gradually as it averaged against incoming public purchases? I’m a noob just interested what caused that particular price to change.

@hapchepsihologiq 4 года назад

Great vid thanks

@nullifier_ 2 года назад

4:24 There it is! As easy as it can be explained. Thanks

@AnaHecSepulveda 4 года назад

Greatest video. Thank you

@Lumovest 4 года назад

Thanks Ana :)

@CaliBladerunner 3 года назад

wow, this video by far is the best explaining stock price

@Lumovest 3 года назад

Thanks Kenny!

@toanduongmanh8069 2 года назад

Seriously, you guys are the best of the best

@moivien 4 года назад

Well explained bro! Keep it up!

@Lumovest 4 года назад

Thanks for the kind words!

@kittharindu 4 года назад

Very informative guys.!

@patrickqueen6558 3 года назад

Wow very clear and precise

@pratikdahal9784 4 года назад

I appreciate your effort.... Thanks for the video.... Love from Nepal....

@Lumovest 4 года назад

Thank you Pratik!

@pratikdahal9784 4 года назад

Welcome..... May you gain enough views and subscribers...... Keep moving.... Hard work pays.....

@kesharwanihimanshu84 3 года назад

Hey would you please tell ,how much should I assume a growth rate of explicit for cast period, aka continuing value ,thanks

@krishnachiddarwar505 4 года назад

Watch this video to learn more!! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-tAspifjj1zs.html How to evaluate STOCKS | Basics Buying an overvalued STOCK will decrease your Net Worth. Buying undervalued stocks and holding them for the long run, though, can help you to quickly increase your net worth.

@abdirahmanabdalla1042 4 года назад

thank you

@suryaraj3650 4 года назад

No other channel explained intrinsic value the way you did. Really worth watching it.

@ShivamGupta.31 3 года назад

liked the way you explained it all I such a simple way!

@TheSachinmrig 3 года назад

Simple and easy to understand the basic concept but very important.

@Axel-sf5fe 3 года назад

Been on tons of workshop, i didn't know i could gotten all off cash flow explanation for free in lumovest :( please keep making this video

@HaRizIdeas Год назад

oh this makes me much clear about the stocks thnk u

@rishabhsharma329 4 года назад

Loved it !

@Lumovest 4 года назад

Thanks!

@thehouse2620 2 года назад

well done, exactly what i was looking for

@dksingh3248 4 года назад

Hello , helping video Thanks Sir

@moinulhaque1415 4 года назад

Very informative. Thanks a lot!

@cipopol8110 3 года назад

amazing , easy to understand

@davidjames1684 4 года назад

Many traders don't care about intrinsic value and other company metrics. They just buy the dip and sell a few dollars higher. Simple and effective.

@jaw0449 4 года назад

David James only when you play short with no long plays

@davidjames1684 4 года назад

@NerdyJock - "play short" - is basically the definition of trader (vs. investor).

@davidjames1684 4 года назад

@Chris - I said buy the dip, not buy the plummet. I am talking about a good stock that dips during the day and when I do that, it almost always comes back up. Sometimes I do this multiple times in the same day using the same stock.

@David-bo1ug 4 года назад

Thank you much

@yuvarajyuvi2747 5 лет назад

What a logical explanation😎,superb

@Lumovest 5 лет назад

Thanks man!

@RIGiantsGuy 3 года назад

This is absolutely phenomenal! I’m pretty good with numbers, but your explanation and examples made it super easy to follow. Thank you so much, I have subscribed.

@steph2cool764 4 года назад

Extremely helpful, new subscriber for the long haul 🙂

@Lumovest 4 года назад

I'm glad Steph :)

@Dracstar 3 года назад

Really clear video! Nice job :)

@basavasagarkpatil8973 4 года назад

You should upload more videos,you are great

@turnitinplagiarismreportch1973 3 года назад

very conceptual video❤️❤️❤️

@os9458 4 года назад

subscribed . GOOD QUALITY CONTENT

@lmathews5608 4 года назад

Amazing explanation 👏👏👏👏👏👏

@sharmaaks729 2 года назад

This video is gem.

@inday1453 4 года назад

helps so much

@ivanpp16 2 года назад

This is great. Thanks!

@oscarsibanda9454 4 года назад

8:34 It’s the S curve that should move to the right, reflecting more sellers. That in turn will drive the prices down. All in all, great video.

@huihui7277 4 года назад

Supply is not increasing, the demand is decreasing because of fear (selling)

@oscarsibanda9454 4 года назад

S H If you had shares in company X and you believed that the stock price is now overvalued, you would sell, right? If everyone did the same, the S curve would shift to the Right, Increasing supply

@chinnianphong 4 года назад

Yes that makes sense to shift the supple curve right

@chinnianphong 4 года назад

Because everyone is rushing to dump their shares, thus increasing supply

@yuanzhilee6405 4 года назад

But even though the demand has increased due to more people selling (as more people would also be buying), the corresponding quantity demanded to a certain price would also have decreased due to larger supply, hence it would also make sense to move the demand curve to the left right?

@theopats2660 4 года назад

Bro your videos are incredible. I want to start trading and your videos are very helpful up to a point . You keep it simple , graphics design awesome, and the voice . Keep going

@Lumovest 4 года назад

Thanks so much!!

@ezasokotela7523 2 года назад

This is so intuitively presented. I would highly recommend this video to anyone new to investments.

@InvestingHustler 5 лет назад

New subscriber 🙋🏽‍♂️ here to help on your road to 1000 nice channel keep it up !

@Lumovest 5 лет назад

Haha thanks man. Welcome to the club!

@krungangkor9693 4 года назад

Great and interesting

@DontTakeCrack 2 года назад

I think I understand. At 8:42, I can translate that directly to when im trying to buy stock from a brokerage when there's different types of orders (market, limit). My decision on a specific stock then gets calculated along with many other people's decision for that same stock and you end up certain transactions going through and certain ones not happening.

@kevinshane5361 4 года назад

Outstanding bro👍👍👍👍

@jairusan 3 года назад

Excellent simplified explanation about how the prices are determined, I consider myself pretty ignorant with regards to the intrinsic value factor, super important now that I saw this video, can you create a video just focused on demystifying intrinsic value with a couple of deeper examples, something like using yahoo finance and their profile details on some stock e.g. APPL? Thank you for all your great information and hard work.

@MEADOWMAESTRO 3 года назад

Good one

@jackcheung4301 4 года назад

Unlimited QE by the FED will change everything in anyway.

@sukhisingh0074 4 года назад

U got a new subscriber. Sharing 👍

@aditiroy5828 4 года назад

excellent video. Really very useful for beginners.

@michaeladams4999 11 месяцев назад

Thanks.

@Adi-xy8iu 3 года назад

Clear Explanation❤️. I think this is the undervalued You tube channel on stock market. I wish this channel gets more subscribers in the future.

@allaboutthebrandkamps1893 4 года назад

Good video

@avadhsavsani1148 3 года назад

I can die in peace now! Thanks a lot for such a great and simple explanation frandddd

@aggropa 5 лет назад

So much better than the number 1 video for this topic. That's a thumbs up and subscribe from me.

@q.b.3828 3 года назад

good explanation

@mofogamingttv9835 3 года назад

Watching this in 2021. Just to get your algorithm back for your channel

@Lumovest 3 года назад

Haha super thankful!

@bayobayo3225 4 года назад

Great information

@catherineahonsi4989 3 года назад

Well explained

@ElevatedMtbAvion 4 года назад

Omg you were right

@loraveybonto1115 3 года назад

New subscriber here! This really helped me on my studies. Thank you so much ❤️ looking forward to your other videos..

@Lumovest 3 года назад

You're welcome :)

@sophiamia5266 3 года назад

Have you been trading on stock?

@HotdogJuice 3 года назад

The best advice I can give is to watch the news. There are psychological influences in the market. Bad news is bad news and good news is good news...typically.

@jackmist5096 3 года назад

Great information... superb video... 👌👌 I have a question : How often do we calculate and update the intrinsic value of the stock in a year ????

@hosseinaboutalebi9998 3 года назад

Hi, I just watched your channel and subscribed. Please keep up your good works. Thanks

@sam_6135 5 лет назад

How isn’t your channel growing

@Lumovest 5 лет назад

Beats me really. We're new though and we'd grow a lot faster if viewers share our videos with their friends through social media!

@TenHorizons 4 года назад

Lumovest i really liked your video.First one to show up in search actually. I think it is important to upload frequently, use eye catching and interesting thumbnails, and persevere. Maybe your videos didn’t show up in search in the past, but only now RU-vid found it. Financial Education’s RU-vid channel does very well, probably because he gives a reason for viewers to come back. He helps viewers with their problems, makes stock portfolios for them, and shares his viewpoints and opinions which apparently are popular. I’m not saying you should copy him, but maybe try to retain your viewership? I’m new to investment, and I learned that when deciding on an investment, one needs to see first, whether many people use their product, and second, whether people keep coming back and back. I could have improved on this. This is my honest two cents.