The economics of trading?

Actually, I want to understand more on the logics of the traders here.
In the last few months we have seen shares dropping 30%+ of the top

If so, why would people keep selling their shares? Assuming some sold their shares at 30% discount back then, the buyers of those shares SL at 5% and so on, we can safely say that sellling shares now or at further discount will result in the law of diminishing return for the profit takes and further losses for the sellers.

In such a case, it's illogical for trades to continue is it not? As warren buffett says, the brokerage fees for certain counters is higher than the total annual net profit that the company makes.

We're paying 1 billion in brokerage fees, for a company that makes 1 million.

For example, one of those counters would be huaan I assume. The volume of trading is huge, but I doubt the entire net profit is equivalent to it.

Strangely odd, but there u go..

Hua an making not a small profit, it might be bad in some eyes but good in others. Taking that as example of small profit vs. brokerage might not be appropriate.
I holding 0 Hua An, have no benefit to defend it, just fyi. But I am looking into loading back my position

Hua an making not a small profit, it might be bad in some eyes but good in others. Taking that as example of small profit vs. brokerage might not be appropriate.
I holding 0 Hua An, have no benefit to defend it, just fyi. But I am looking into loading back my position

I wonder why she/he always pick on HUAAN.

Sounds like "molested" by Huaan before, could be the first love.

Just one of those stock that I have experience with mar. That I do know has a huge volume. Otherwise I can't simply name a stock..

Ok here's some numbers.

Total stocks traded for 2007

1,658,525,000
At an average price of 1.045

Brokerage fees at 1%
16,585,250

16 million in brokerage fees?

Just one of those stock that I have experience with mar. That I do know has a huge volume. Otherwise I can't simply name a stock..

Ok here's some numbers.

Total stocks traded for 2007

1,658,525,000
At an average price of 1.045

Brokerage fees at 1%
16,585,250

16 million in brokerage fees?

Anyway, seems like huaan profit for 07 is quite good too, bad example from me.
16,585,250/127,522,000 ~ 12% of a company's profit.

But Sky, if you look at my post, it's not specifically targette at huaan, i'm just talking about the economic logic behind why certain counters brokerage fees is actually higher than the company's entire year's net profit.

Why do we buy shares, to get a piece of the company's net profit.
It doesn't make much sense that the cost of buying the shares to get a piece of the company's profit is higher than the company profit itself.

And that's the point that I was trying to raise, huaan just happen to be a share that I know off, so i picked it off the back of my head lor

We do not earn comm by sharing info here.

We only got the blames when someone is losing money. Just wonder how they trade ?

People buy and sell because they wanna profit - lah.. simple.. we are capitalists otherwise why else
doing here. rite?

Ok.. I will predict DJIA will be green tonight.. bargain hunters jump back in to grab more shares.

Calm calm... we all here to share info and thoughts, not quarrel against each others
I like Hua An because of its volume (and its fundamental, I don't want to get stuck with goreng stocks which might close shop tomorrow), I think some of us buying this because of that too, stocks with low volume very hard to get rid even when the market is up, because there might be no buyer when you try to sell. Just my 2 sens.

He's just saying how they trade, I find no offense in that.

Which is exactly my question itself, trade = making money off each other.

Instead of investing to earn a piece of the companies's net profit?

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Added on November 7, 2008, 12:12 pmKLSE is crazy man, we may go green if this continues