It's actually a flawed analogy.
What you're simply pointing out is that there are inefficiencies in a particular market. Faster time to market eliminates these inefficiencies.
The guy with the slower connection simply can not use the old tried and true strategy of arbitrage.
Here's the breakdown.
If the price of gold is 1$ in San fran, but NY is buying it at 1.5$, that is an arbitrage, you can buy in San fran and sell in NY. It means the market of gold is currently inefficient. In the old days, you could be that truck driver that picks up 1.5 tons of gold at 1$ and sell it in NY at 1.5$. Later someone built a train line that made the trip faster and just obsoleted the truck driver. In the future someone invents a teleportation machine and obsoletes the train. Regardless of the situation, the market will see less arbitrage situations as the technology improves.
There are certainly wrongs with HFT, but eliminating arbitrage is not one of them.
That is just way too general of an assumption about what one does with a computer.
The same analogy would go for CPUs, why doesn't everyone just get by on a Pentium 4 or an Athlon X2? Both are perfectly acceptable, but honestly, I want my computer to be like my phone. Near 0 load/processing times which means more time doing what I care about and less time waiting for the machine doing stuff it cares about.
in that respect, I'll happily fork over 200$ for a small SSD/
Unfortunately that's not the way it works, this is a very efficient market. Would you pay 10$ for a steam game if it could be had for 3.99$?
take your example with the apple seller
The apple grower (seller) takes product to a market place (NYSE) and says I'm going to sell it for 5c per apple, the ask.
To create a market, the Market Maker like Knight will now put in a bid for 4 c because that is their purpose, to create liquidity in a market place.
Now we have 2 choices. the seller can decide to sell that apple to the Market maker for 4c or he can just wait around until a Buyer comes in and buys it from him at 5c.
Choice 1: the seller sells it to Knight at 4c. Knight now owns the risk on the apple potentially falling further but in the mean time, the Original seller sold his apple and has none left. Knight will now put an offer , the ask, on the apple they bought for say 4.5 cents (to help move it faster). They will also at the same time lower their Bid in case more apples are for sale down to 3c.
Choice 2: Another buyer comes in and buys the apple from teh seller at 5c. The buyer gets his apple at 5c, the seller sells at 5c. The market maker is completely not involved in this transaction. What the market maker will do though, is now set a sell price at 6c to create a market place.
Now where the market maker potentially can overstep a smaller investor is that the market maker obviously knows the best prices since they're making the market and see what's out there. if they are desperate to dump the apple they bought at 4c and try and sell it at 4.5c and another individual seller comes in at 4.4c, the algorhythm may then say "shit the market is moving down, look for the best price I can sell my position at" If a buyer steps in at 4 cents, the algo will automatically offload the position before the seller can make that decision. But that's why you have things called limit orders or market orders. Limit makes sure you get what you want if the price moves the way you want.
the exchange in all of this is simply a market place. They are not the middle men. They provide for you a service where you have a market place to trade your goods and charges you for the right to trade on the exchange. Much like if you were in a farmers market, you'd have to rent the particular stall.
what you are talking about is front running and that is illegal.
The sec will absolutely fine you a rather large sum of money if you try that.
Look up the definition of a market maker. It is not a random term I threw around.
The market makers make a spread as a commission for offering liquidity to a particular market place. In your apple example, if the farmer grows an apple at 5 cents, and there is no middle man to deliver it to you, are you implying that you still should be entitled to pay only 5 cents for the same apple?
nono I made a mistake with that last post which is why i tried to reply to myself.
the 440 mm is real, every single trade that attributed to that 440mm will not be unwound by NYSE.
it already took into account all of the trades that NYSE has said would be canceled, which is the 6 stocks where the trades executed +/- 30% opening price.
erm Knight reported a 440mm USD loss. THey know it, they said it.
They took all 4mm trades they did on those securities, realized the loss and pinpointed it at 440mm, they know that because NYSE said that only 6 stocks where the trades executed at 30 percent higher or lower than opening price will be cancelled.
Reuters reported nothing wrong, and I have stated nothing contrary to that.
Knight is on the hook for the full 440mm USD loss.
What if you were an IT guy who worked at Enron and you happen to be paid in Enron stock?
What if you were working at face book and they paid you in facebook stock for a lower salary and it turns out Facebook was basically committing fraud by having bots click on their paid adverts links. Facebook stock then crashes and you can't sell out of what you have.
Perhaps you hide all your money under your mattress, good luck keeping up with inflation.
This is also where Knight's algorithm potentially screwed up.
usually firms will put in limit orders. ie I believe it's this so therefore don't go above or below that target to transact
Also what you are missing is that NYSE just "matches" trades. 1 second "guessing" ignores that fact that no matter what you guess, if there is no match, there is no trade. And since not all the market makers enter their prices at the same time, not everyone waits around at the same time.
here's an exaggerated example
Take enron when they released their financial misreporting scandal.
Imagine if every one had to wait 1 hour before prices get updated and transacted.
The stock was at 72$
Everyone in the world just puts in a short @ 72$ because we ALL know what's goign to happen to this stock
At the end of the hour, every one and their extended relatives has shorted Enron @ 72$.
Now, as the exchange, what gets executed? Chances are, nothing. All those buyers on the other side already knew that 72$ is a terrible buy and would have all pulled prices. You now have 0 liquidity.
These are actually dark pools and nothing at all related to how you and me trade.
These are transactions that go between market makers. Big boys on the street.
You create an external market place by allowing the free flow of securities behind the scenes. You don't actually have the ability to see what's going on in the background. What it insures is that when the retail market looks at it, they can be sure that they are transacting on the "real" price as determined by the market.
So to your interval question, it's about the price.
If you transact only once a month, surely the price has moved somewhere in between. You buy apple at 600 at the beginning of the month and you want to sell it now, what price do you get quoted? The 600 that was still there a month ago, or do you wait till the end of the month and see where it lands.
I'd tell the firm "too bad". It shouldn't be up to the NYSE to make sure companies don't do something stupid. Back in time a ways, when someone tried to game the system and then failed hard they would be ignored and forgotten. Now, with bailouts and do-overs and participation trophies, we ignore hard working americans who don't expect handouts and reward those who don't want to take responsibility for their actions.
Actually, NYSE did tell them exactly that.
Knight is on the hook for the full 440mm USD loss. NYSE stuck them with every single trade that they transacted during the particular time span.
And before you spew the bailouts/ do-overs/hard working american rhetoric, let's actually review the facts related to the topic on hand.
-Knight is a market maker. Their sole purpose on NYSE to ensure liquidity and make money. They do it by actively stepping in to sell and buy particular securities. There is nothing there that "games" the system.
-They rolled out a new application mid week and apparently turned it on without fully testing it causing a huge spike in volume
-The algorithm, rather stupidly, bought high and sold low.
-NYSE actually called within 30 minutes Knight to inform them that they might be accidentally executing incorrectly
-Knight basically ignored the warning and let the algorithm run for a full hour.
-End of the day, Knight is on hook for the entire loss. Not because it was a "mistake" but because these are all legitimate trades with legitimate counterparties and didn't violate any rules.
-Nyse has stated that and has said there would be no further appeals allowed on the issue.
since we've both obviously have time to kill. I'm gonna keep this convo alive until you "see the light".
Where in there does it say said venture capitalist understood how the business worked? More likely, he said 'this sounds like it could work, i'll give some money.' I seem to recall quite a few VCs that lost out because they were taken in by some startups story.
A venture capitalist when they give money to a company owns usually 50+% in a company they've given money too, so it's in their best interest to find out exactly how a company works. Alot of VCs that lost out during the bust were simply people with money that didn't bother to find out what the company does. Google on the other hand was groomed by sequoia capital and kleiner perkins, two very well respected VC firms that defintiely do their research on the companies they invested in.
Yes, they will say that, based on what they understand of the company. Do they always understand it? Doubtful. They may, but they may not. They may just be looking at a company and saying 'its been growing for a while now, seems like they can continue to grow.'
If you seem to understand how google's business model works. I can't see why a multibillion dollar corporation couldn't either.
Are you saying that by google not guessing what their profits might be, you can't know anything about a company? What about past history and current performance? You're telling me these really smart people can't go without google guessing what their profits might be?
like you said.. Google will have the best idea on what their profits might be. If they don't give guidance, wall st will just have to guess as to where the profits might be leading to price instability. And any child knows that past history is never an indictation of future performance.
You mean economic teacher of course. Its been a while since I had one, but I'm glad he wasn't so narrow minded as you.
Since you wish to go off topic, it's acutally economics teacher. Economic being an adjective and economics being the subject.
Wow, you really are dumb aren't you? Having a system based on currency has nothing to do with buying stocks! You're right, we probably won't have a stock market without currency, but we currently can have currency without a market! Where the hell did you see me post that we shouldn't have currency? If you can't find it, then stop this idiotic sheeps and cows crap.
Moo moo. Perhaps you understand that a little better? I only mention sheeps and cows simply because you don't seem to understand what currency is. Since currency is simply a medium for exchanging goods. My cows and sheep are a perfectly valid replacement of such and I was hoping you'd see that companies like Google would not exist without the stock market. But because you seem to be dumber then me, I guess it's a moot point to further explain it to you. Sides my dick is bigger than yours anyway.
I'd argue its not soley about making money. If my business plan included cutting costs by dumping toxic waste in a lake, i think i'd still be in trouble. So no, there only obligation isn't to make money.
You start a company to make money. What else would they be striving for? World peace?
When they went public, they agree to follow certain laws which govern the stock market. Posting actual results is one of those laws; posting guesses to 'give guidance' is not. The market will have to figure out other ways to determine what the price of the stock should trade around.
Which once again comes back to price volatility.
No, because there is alot of other information to use; past performance, what their vision is, the next product or service they are working on, etc. Its likely that google's guess would be as good as yours or mine as well. What exactly do you think they know that you can't find out?
I'm going to reply to you one last time because I hope you can learn something if you ever wish to get a job in the finance field.
I doubt any large inventment firm actually knows as much as the company itself. If said firm didn't like the terms of google's stock, they should not have bought it.
Firstly, how do you think google got the money they needed to even start a company? Some guy named the venture capitalist looked at their business and how it worked and said "Ok, let me give you some money to get started." Now after that stage, when google wishes to have an initial offering of stock. A big financial firm comes in and says, "fine, your business looks sustainable so we'll try and push it out to our clients/markets" At which point all the other big financial firms will say, let me see your business and your financials. Do you really think that ANY person in their right mind will throw over a few hundred million dollars at a company they don't know about?
You don't seem to grasp that idea that you can have capitalism without a stock market at all.
Don't tell that to your economist teacher.
Capitalism
An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.
Okay, let's go back to sheeps and cows, you're right we don't NEED a stock market, but next time you wish to invest to google, feel free to ship them a bunch of sheeps and cows for their shares.
And nothing in that last paragraph has anything to do with the fact that Google's only obligation is to post actual results, not guess what the results might be. And you probably also missed that google isn't the only company which doesn't play this game.
Google's obligation is strictly to make money. It's not to post actual results. Them guessing results gives guidance as to what stock price the company should trade around. Without the guidance, your guess is as good as mine where this stock price should trade. This leads to inefficient markets and price discrepancies. In cases like this, it is inevitably, the individual investors who do not have the resources of a large corporation that get burned when there is a price correction. But feel free to find me some more companies that don't give guidance that trade anywhere near the level of google.
Sounds to me like people invested into something they didn't know about; well tahts their own damn fault.
This is meant to be informative and I hope you learn something.
And there's no criteria to be a shareholder either is there? Should I be able to buy some stock and then expect the company to do whatever I see? Shareholders rarely ever understand how the business operates, yet they feel like they should be able to tell the company how to run or how much they think the company should make. Its insanity.
Because these are large institutions with great big chunks of money, that know exactly how a business operates and would love to have some guidance on a company they collectively own more then 30+% of.
I mention trading sheep for cows because you don't seem to grasp the concept of capital markets. A company trades at a certain share value BECAUSE people think it'll potentially make X amount. That's why there's such a thing called the P/E ratio. Price to Earnings. Otherwise that share price is meaningless and causing people who have invested money with the brokers/investors/hedge funds to potentially lose alot of money into something that might be artifically inflated. And, that is a bad thing because when your public loses money, the only people who come out on top of all of this is, the Wall st. brokers, and the top guys at google, who are paid their millions/multimillions who really don't care about whether you or I make a buck or two in investing with them.
Slashdot Mirror
You have 80k$ of disposable cash sitting around?
Millions of people don't, this car is not for them.
It's actually a flawed analogy. What you're simply pointing out is that there are inefficiencies in a particular market. Faster time to market eliminates these inefficiencies. The guy with the slower connection simply can not use the old tried and true strategy of arbitrage.
Here's the breakdown.
If the price of gold is 1$ in San fran, but NY is buying it at 1.5$, that is an arbitrage, you can buy in San fran and sell in NY. It means the market of gold is currently inefficient. In the old days, you could be that truck driver that picks up 1.5 tons of gold at 1$ and sell it in NY at 1.5$. Later someone built a train line that made the trip faster and just obsoleted the truck driver. In the future someone invents a teleportation machine and obsoletes the train. Regardless of the situation, the market will see less arbitrage situations as the technology improves.
There are certainly wrongs with HFT, but eliminating arbitrage is not one of them.
That is just way too general of an assumption about what one does with a computer.
The same analogy would go for CPUs, why doesn't everyone just get by on a Pentium 4 or an Athlon X2? Both are perfectly acceptable, but honestly, I want my computer to be like my phone. Near 0 load/processing times which means more time doing what I care about and less time waiting for the machine doing stuff it cares about.
in that respect, I'll happily fork over 200$ for a small SSD/
it's a SATA interface regardless, why does it matter if it's for the "desktop" or the "laptop".
do you know of have 3.5" SSDs?
I'm using the seagate momentus and it came witha 3.5" mounting bracket
if Lucas123 can answer that question, he'll find his answer.
If they're goint o pick an arbitrary number, why even make it so complicated.
they should just say 1 AU = 42 and be done with it.
TL:DR
create a new company and sell the assets to the new entity for 1$
done.
Plus interest and time value lost and potential value of data stored now that the service you paid full price for is no longer available.
http://news.sciencemag.org/sciencenow/2012/08/written-in-dna-code.html?ref=hp dna archiving.
Unfortunately that's not the way it works, this is a very efficient market. Would you pay 10$ for a steam game if it could be had for 3.99$?
take your example with the apple seller
The apple grower (seller) takes product to a market place (NYSE) and says I'm going to sell it for 5c per apple, the ask.
To create a market, the Market Maker like Knight will now put in a bid for 4 c because that is their purpose, to create liquidity in a market place.
Now we have 2 choices. the seller can decide to sell that apple to the Market maker for 4c or he can just wait around until a Buyer comes in and buys it from him at 5c.
Choice 1: the seller sells it to Knight at 4c. Knight now owns the risk on the apple potentially falling further but in the mean time, the Original seller sold his apple and has none left. Knight will now put an offer , the ask, on the apple they bought for say 4.5 cents (to help move it faster). They will also at the same time lower their Bid in case more apples are for sale down to 3c.
Choice 2: Another buyer comes in and buys the apple from teh seller at 5c. The buyer gets his apple at 5c, the seller sells at 5c. The market maker is completely not involved in this transaction. What the market maker will do though, is now set a sell price at 6c to create a market place.
Now where the market maker potentially can overstep a smaller investor is that the market maker obviously knows the best prices since they're making the market and see what's out there. if they are desperate to dump the apple they bought at 4c and try and sell it at 4.5c and another individual seller comes in at 4.4c, the algorhythm may then say "shit the market is moving down, look for the best price I can sell my position at" If a buyer steps in at 4 cents, the algo will automatically offload the position before the seller can make that decision. But that's why you have things called limit orders or market orders. Limit makes sure you get what you want if the price moves the way you want.
the exchange in all of this is simply a market place. They are not the middle men. They provide for you a service where you have a market place to trade your goods and charges you for the right to trade on the exchange. Much like if you were in a farmers market, you'd have to rent the particular stall.
let me know what Enron trades at right now if you think my 0/1 example is unrealistic.
how about worldcom? let me know what the price of those are.
Btw if you still wish to buy Enron stock at a reasonable price, let me know =)
what you are talking about is front running and that is illegal.
The sec will absolutely fine you a rather large sum of money if you try that.
Look up the definition of a market maker. It is not a random term I threw around.
The market makers make a spread as a commission for offering liquidity to a particular market place. In your apple example, if the farmer grows an apple at 5 cents, and there is no middle man to deliver it to you, are you implying that you still should be entitled to pay only 5 cents for the same apple?
nono I made a mistake with that last post which is why i tried to reply to myself.
the 440 mm is real, every single trade that attributed to that 440mm will not be unwound by NYSE.
it already took into account all of the trades that NYSE has said would be canceled, which is the 6 stocks where the trades executed +/- 30% opening price.
acutally no,
after an hour when that info has desiminated, there would be a bid of 0$
and the ask would probably be 1$
In an efficient market where news is suppose to hit the fans at the same time, you'd basically have shut down liquidity for that entire period.
If trading in miliseconds you have smaller "steps" as people will let you "tick" the price all the way down to 0.
Oops i implied all of the securities that day and not just the 6.
erm Knight reported a 440mm USD loss. THey know it, they said it.
They took all 4mm trades they did on those securities, realized the loss and pinpointed it at 440mm, they know that because NYSE said that only 6 stocks where the trades executed at 30 percent higher or lower than opening price will be cancelled.
Reuters reported nothing wrong, and I have stated nothing contrary to that.
Knight is on the hook for the full 440mm USD loss.
In your case, the small investor gets back 0.
In current market scenario, the small investor still has the ability to sell and recover a small portion of his investment.
I think the small investor feels the pain more when he gets back 0 compared with a big firm.
Really?
What if you were an IT guy who worked at Enron and you happen to be paid in Enron stock?
What if you were working at face book and they paid you in facebook stock for a lower salary and it turns out Facebook was basically committing fraud by having bots click on their paid adverts links. Facebook stock then crashes and you can't sell out of what you have.
Perhaps you hide all your money under your mattress, good luck keeping up with inflation.
This is also where Knight's algorithm potentially screwed up.
usually firms will put in limit orders. ie I believe it's this so therefore don't go above or below that target to transact
Also what you are missing is that NYSE just "matches" trades. 1 second "guessing" ignores that fact that no matter what you guess, if there is no match, there is no trade. And since not all the market makers enter their prices at the same time, not everyone waits around at the same time.
here's an exaggerated example
Take enron when they released their financial misreporting scandal.
Imagine if every one had to wait 1 hour before prices get updated and transacted.
The stock was at 72$
Everyone in the world just puts in a short @ 72$ because we ALL know what's goign to happen to this stock
At the end of the hour, every one and their extended relatives has shorted Enron @ 72$.
Now, as the exchange, what gets executed? Chances are, nothing. All those buyers on the other side already knew that 72$ is a terrible buy and would have all pulled prices. You now have 0 liquidity.
These are actually dark pools and nothing at all related to how you and me trade.
These are transactions that go between market makers. Big boys on the street.
You create an external market place by allowing the free flow of securities behind the scenes. You don't actually have the ability to see what's going on in the background. What it insures is that when the retail market looks at it, they can be sure that they are transacting on the "real" price as determined by the market.
So to your interval question, it's about the price.
If you transact only once a month, surely the price has moved somewhere in between. You buy apple at 600 at the beginning of the month and you want to sell it now, what price do you get quoted? The 600 that was still there a month ago, or do you wait till the end of the month and see where it lands.
I'd tell the firm "too bad". It shouldn't be up to the NYSE to make sure companies don't do something stupid. Back in time a ways, when someone tried to game the system and then failed hard they would be ignored and forgotten. Now, with bailouts and do-overs and participation trophies, we ignore hard working americans who don't expect handouts and reward those who don't want to take responsibility for their actions.
Actually, NYSE did tell them exactly that.
Knight is on the hook for the full 440mm USD loss. NYSE stuck them with every single trade that they transacted during the particular time span.
And before you spew the bailouts/ do-overs/hard working american rhetoric, let's actually review the facts related to the topic on hand.
-Knight is a market maker. Their sole purpose on NYSE to ensure liquidity and make money. They do it by actively stepping in to sell and buy particular securities. There is nothing there that "games" the system.
-They rolled out a new application mid week and apparently turned it on without fully testing it causing a huge spike in volume
-The algorithm, rather stupidly, bought high and sold low.
-NYSE actually called within 30 minutes Knight to inform them that they might be accidentally executing incorrectly
-Knight basically ignored the warning and let the algorithm run for a full hour.
-End of the day, Knight is on hook for the entire loss. Not because it was a "mistake" but because these are all legitimate trades with legitimate counterparties and didn't violate any rules.
-Nyse has stated that and has said there would be no further appeals allowed on the issue.
since we've both obviously have time to kill. I'm gonna keep this convo alive until you "see the light".
Where in there does it say said venture capitalist understood how the business worked? More likely, he said 'this sounds like it could work, i'll give some money.' I seem to recall quite a few VCs that lost out because they were taken in by some startups story.
A venture capitalist when they give money to a company owns usually 50+% in a company they've given money too, so it's in their best interest to find out exactly how a company works. Alot of VCs that lost out during the bust were simply people with money that didn't bother to find out what the company does. Google on the other hand was groomed by sequoia capital and kleiner perkins, two very well respected VC firms that defintiely do their research on the companies they invested in.
Yes, they will say that, based on what they understand of the company. Do they always understand it? Doubtful. They may, but they may not. They may just be looking at a company and saying 'its been growing for a while now, seems like they can continue to grow.'
If you seem to understand how google's business model works. I can't see why a multibillion dollar corporation couldn't either.
Are you saying that by google not guessing what their profits might be, you can't know anything about a company? What about past history and current performance? You're telling me these really smart people can't go without google guessing what their profits might be?
like you said.. Google will have the best idea on what their profits might be. If they don't give guidance, wall st will just have to guess as to where the profits might be leading to price instability. And any child knows that past history is never an indictation of future performance. You mean economic teacher of course. Its been a while since I had one, but I'm glad he wasn't so narrow minded as you.
Since you wish to go off topic, it's acutally economics teacher. Economic being an adjective and economics being the subject.
Wow, you really are dumb aren't you? Having a system based on currency has nothing to do with buying stocks! You're right, we probably won't have a stock market without currency, but we currently can have currency without a market! Where the hell did you see me post that we shouldn't have currency? If you can't find it, then stop this idiotic sheeps and cows crap.
Moo moo. Perhaps you understand that a little better? I only mention sheeps and cows simply because you don't seem to understand what currency is. Since currency is simply a medium for exchanging goods. My cows and sheep are a perfectly valid replacement of such and I was hoping you'd see that companies like Google would not exist without the stock market. But because you seem to be dumber then me, I guess it's a moot point to further explain it to you. Sides my dick is bigger than yours anyway.
I'd argue its not soley about making money. If my business plan included cutting costs by dumping toxic waste in a lake, i think i'd still be in trouble. So no, there only obligation isn't to make money.
You start a company to make money. What else would they be striving for? World peace?
When they went public, they agree to follow certain laws which govern the stock market. Posting actual results is one of those laws; posting guesses to 'give guidance' is not. The market will have to figure out other ways to determine what the price of the stock should trade around.
Which once again comes back to price volatility.
No, because there is alot of other information to use; past performance, what their vision is, the next product or service they are working on, etc. Its likely that google's guess would be as good as yours or mine as well. What exactly do you think they know that you can't find out?
I'm going to reply to you one last time because I hope you can learn something if you ever wish to get a job in the finance field.
I doubt any large inventment firm actually knows as much as the company itself. If said firm didn't like the terms of google's stock, they should not have bought it.
Firstly, how do you think google got the money they needed to even start a company? Some guy named the venture capitalist looked at their business and how it worked and said "Ok, let me give you some money to get started." Now after that stage, when google wishes to have an initial offering of stock. A big financial firm comes in and says, "fine, your business looks sustainable so we'll try and push it out to our clients/markets" At which point all the other big financial firms will say, let me see your business and your financials. Do you really think that ANY person in their right mind will throw over a few hundred million dollars at a company they don't know about?
You don't seem to grasp that idea that you can have capitalism without a stock market at all.
Don't tell that to your economist teacher.
Capitalism
An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.
Okay, let's go back to sheeps and cows, you're right we don't NEED a stock market, but next time you wish to invest to google, feel free to ship them a bunch of sheeps and cows for their shares.
And nothing in that last paragraph has anything to do with the fact that Google's only obligation is to post actual results, not guess what the results might be. And you probably also missed that google isn't the only company which doesn't play this game.
Google's obligation is strictly to make money. It's not to post actual results. Them guessing results gives guidance as to what stock price the company should trade around. Without the guidance, your guess is as good as mine where this stock price should trade. This leads to inefficient markets and price discrepancies. In cases like this, it is inevitably, the individual investors who do not have the resources of a large corporation that get burned when there is a price correction. But feel free to find me some more companies that don't give guidance that trade anywhere near the level of google.
Sounds to me like people invested into something they didn't know about; well tahts their own damn fault.
This is meant to be informative and I hope you learn something.
And there's no criteria to be a shareholder either is there? Should I be able to buy some stock and then expect the company to do whatever I see? Shareholders rarely ever understand how the business operates, yet they feel like they should be able to tell the company how to run or how much they think the company should make. Its insanity.
Because these are large institutions with great big chunks of money, that know exactly how a business operates and would love to have some guidance on a company they collectively own more then 30+% of.
I mention trading sheep for cows because you don't seem to grasp the concept of capital markets. A company trades at a certain share value BECAUSE people think it'll potentially make X amount. That's why there's such a thing called the P/E ratio. Price to Earnings. Otherwise that share price is meaningless and causing people who have invested money with the brokers/investors/hedge funds to potentially lose alot of money into something that might be artifically inflated. And, that is a bad thing because when your public loses money, the only people who come out on top of all of this is, the Wall st. brokers, and the top guys at google, who are paid their millions/multimillions who really don't care about whether you or I make a buck or two in investing with them.