Market price and "true value" are rarely the same - even in the real stock market. As I've said earlier, hardware numbers should be considered growth stocks. They're trading with very high projections (think high PE ratios in the actual market - Google PE ratio if you aren't familiar with it).
Companies trade with high PE ratios all the time. They're growth stocks - projected earnings are higher than actual value.
The market is saying that they're expecting long-term growth this generation - and current NPD numbers (think: quarterly earnings) will only continue to increase over time.
Or it's just a bunch of PS3/360 fans who don't know exactly what they're buying (that happens in the actual stock market, too).
Either way, fighting the market is tough - especially when there's so much upward momentum. And like real stocks, sometimes you need to play the waves rather than what you think the ultimate price will be (though I don't do that with actual money - I prefer the buy-and-hold mentality).
I agree that these hardware numbers are insane, but the market is bullish, so instead of selling into a bull market - buy it. When NPDs hit and hard numbers are being posted hinting at a decline, sell.
Again, a lot of these are not considered "investments" but support by fans. It's just like people buying any stock for a company they're fond of - regardless of the trading price.
I honestly think the biggest issue with the Exchange - as I said before - is just lack of information. What changed between today and last week to merit a huge increase in hardware sales - or any future sale for that matter? Nothing, really - because video game news really isn't very frequent.
That's also why I support NPD trading so much, because those have set dates with actual numbers. The ROI (return on investment) is generally lower than bloated stocks (see Diablo 3), but it's an immediate return.
4
Again - buy the rumor, sell the news.
Market price and "true value" are rarely the same - even in the real stock market. As I've said earlier, hardware numbers should be considered growth stocks. They're trading with very high projections (think high PE ratios in the actual market - Google PE ratio if you aren't familiar with it).
Companies trade with high PE ratios all the time. They're growth stocks - projected earnings are higher than actual value.
The market is saying that they're expecting long-term growth this generation - and current NPD numbers (think: quarterly earnings) will only continue to increase over time.
Or it's just a bunch of PS3/360 fans who don't know exactly what they're buying (that happens in the actual stock market, too).
Either way, fighting the market is tough - especially when there's so much upward momentum. And like real stocks, sometimes you need to play the waves rather than what you think the ultimate price will be (though I don't do that with actual money - I prefer the buy-and-hold mentality).
I agree that these hardware numbers are insane, but the market is bullish, so instead of selling into a bull market - buy it. When NPDs hit and hard numbers are being posted hinting at a decline, sell.
Again, a lot of these are not considered "investments" but support by fans. It's just like people buying any stock for a company they're fond of - regardless of the trading price.
I honestly think the biggest issue with the Exchange - as I said before - is just lack of information. What changed between today and last week to merit a huge increase in hardware sales - or any future sale for that matter? Nothing, really - because video game news really isn't very frequent.
That's also why I support NPD trading so much, because those have set dates with actual numbers. The ROI (return on investment) is generally lower than bloated stocks (see Diablo 3), but it's an immediate return.