Link to join StockHub free investing discord server: –~–
Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re talking about what do stocks go up so much sometimes why do you also look at a stock one month and on all sudden when you look at it the next month that stocks gone up 20 30 40 50 percent in such a short amount of time what causes that well
There are really five different reasons on why of stock can shoot up massively in such a short amount of time guys so that’s what we’re talking about today why does this happen so i hope you guys enjoy this today i want to explain this fully there’s really only five real reasons our five main reasons why this event even occurs guys so let’s go ahead and get into
This hit a thumbs up if you enjoy and let’s talk about this guy’s number one is a major investment fund ahead big hedge fund a big mutual fund of some kind adds a lot of shares so maybe they go bullish on a stock for whatever reason maybe they were on the yacht with the ceo and maybe some information got passed there might be a little bit of inside information but
Who the hell knows because it might have just been death them to on the yacht like who’s watching from the skies guys you never know what goes what’s going on maybe they just read the annual report and really liked that company i don’t know maybe warren buffett just also starts to open it up there’s annual reporting it’s like i love this company let’s go out and
Buy three billion dollars worth of shares over the next month like like that’s obviously i’m gonna shoot that stock up massively guys especially if it’s not a you know a company that’s in the hundreds of billions of dollars or something so when big investment funds add shares in a major way that just creates a lot more buying opportunities and selling opportunities
Generally speaking just because you when you have a big investment fund coming to stock that you know there’s so much money flooding in that stock there’s so many shares they need to buy to accumulate a big position like if you’re running a fifty billion dollar hedge fund or you know that’s got 50 billion dollars under capital or or something like that guys a big
Huge investment fund you need to add a huge positions like those those type of funds are generally only looking to add hundreds and millions of dollars if not billions of dollars worth of an investment in a stock at a time guys and they’ll do that over a couple-week course of time maybe a month so sometimes you’ll just see a stock and it just keeps going up keeps
Going up and there’s really no news behind it there’s like why does the stock just keep going up day in and day out it’s up another three up another 4% the market might not be doing much at that time and there’s probably no news with that stocking you’re like why does the stock just keep shooting up a lot of times guys it’s just big huge mutual fund managers or
Hedge fund managers are adding shares for whatever reason whatever their reasoning is behind it a lot of times that’s happening dies and they don’t have to disclose that until basically the next quarter so you wouldn’t even know they had a bunch of shares you know and tell that basically the next quarter comes around and those type of things guys so that’s the first
One the second reason is possibly a short squeeze now usually this is a one or two day event when this happens so basically you can go long shares which is the thing i preach more than anything on this channel you know making long-term investments thinking about stock over the next few years make an investment there’s also the other way you can go which is is is
Basically shorting shares well when you’re shorting shares you’re essentially betting a company is going down so i don’t know you’re also bearish on apple you think the next iphone is gonna be junk and and apples done and whatever you think okay so you go out with you short shares so you’re basically betting the apple shares are gonna go down and you can cover
Those shares whenever you want you’re gonna you know rebuy them and purchase them and maybe you get them at a much lower price because you shorted those shares now if there’s too many shorts in a stock and then that company does phenomenal that well a lot of times cause a short squeeze which causes the the move upward to be even way bigger than expected so let’s
Say there was a massive amount of short sellers in apple stock like everybody was just like the apple you know they’re done we don’t believe in them they’re our next iphones gonna be crap it’s gonna be delayed or whatever okay whatever reason the shorts have that’s the reason okay so massive amount of people are short those shares what happens is all of sudden
If apple comes out and they have those phenomenal numbers and you know their phones great and all these type of things then all sudden the short sellers like the stocks going up we need to cover now we need to get out before this because when you short shares you have unlimited opportunity to lose money so if you go long shares and that company goes bankrupt you
Lose a hundred percent of your money right when you sort series you can potentially lose thousands of percent money depending on how much the stock goes up over whatever course of time you lose 200% 300% 500 percent like it’s literally unlimited amount you can lose when you short shares so if a stock starts moving up in a big way a lot of sort of sellers will
Start buying those shares back when they buy those shares back that means there’s even more buyers out there at the time guys so it pushes the stock up bigger and bigger and bigger and it’s like a compounding effect you know and usually this is like a one or two day event and it’s just a mess and this was a lot of times you’ll see some of these stocks will move
Up 20 30 40 percent in a day a lot of times just because that stock had a short squeeze a lot of people were negative on a lot of people have short positions and you got a bunch of buyers come in to buy those shares because you know whatever numbers they report or whatever happened the stock shot up and in those shorts had to start covering guys and it’s just a
Mess when that happens so that’s the second reason three more here so the third reason is if insiders buy a bunch of shares in bulk if you know a big insider adds a few million dollars worth of shares generally that’s such a bullish shot sign out there and investment fund managers take note hedge fund managers take note in general a lot of big investors who are
Just individual investors will see that in be like okay that’s ceo just add a 5 million dollars worth of shares of their stock they obviously believe in this company a lot to be making that type of move into the stock they obviously believe the turning point is happening with this stock now it’s got to be a lot of money it’s got to be in the millions if not tens
Of millions of dollars to really get people’s interest if somebody just adds $50,000 worth of shares that the ceo just has $75,000 right no one’s no one gives a crap about that but when somebody makes a big move like steve wynn when he was buying millions of dollars in tens of millions of dollars worth of shares guys when he did that when the wind stock was down
In the 60s about a little over a year ago people took note and they were like wow steve wynn’s buying massive amounts of shares right now he obviously assumes this price is way undervalued for a stock maybe i should follow suit and then all sudden some of these hedge fund managers and mutual fund managers all start following suit and just regular investors – they
Start buying the stock because they’re like why would this the ceo who has more knowledge on the company than anybody by far more insight not like literally anything any type of information this person wants they have it at their disposal if they’re buying mass amounts of shares they’re risking tons of money they’re not just gonna rest on them tons of money just
To risk tons of money guys they would rather put that money and i don’t know cd account or put it in some other investment if they believed it more if they’re buying those type of shares guys huge amounts that probably means something good is going to happen with that stock either in the short-term or probably more than likely over the long term over the next
Few years the generally ceos are kind of looking over the next few years so that could absolutely cause a stock to go up majorly the fourth reason fourth reason is basically if there’s speculation of a buyout happening or if there is a buyout announced then our stock can move up huge guys so you see all the time where there’s speculation about so-and-so company
Is gonna buy xyz company and then all of a sudden you know xyz company stock moves up massively because it’s some report it came out of you know someone that’s somewhat of a credible person and whatnot and it comes out of all these media outlets and that stock will shoot up because those they you know xyz companies trading up $30 a share and they’re talking about
You know abc company wants to buy them for $40 a share so a lot of people will move into that stock as fast as possible because they feel like that’s probably truth in a lot of times i’ll be honest a lot of times these buyout rumors they’re actually accurate the majority of the time at least from my nine years of investing the majority times buyout rumors came
There was actually truth to it guys a company was actually trying to buy that company and maybe a failed to go through or they came out before the anybody announced it and it was actually true guys i don’t know who leaks this information and it’s really bad and it shouldn’t be happening i mean it’s one thing if you know the cleveland cavaliers try to trade some
Nba player to another team and that leaks out but it’s another thing when it’s business but it happens all the time guys it’s this stuff gets leaked before the executive management teams of either side a lot of times even announced it so if that happens or if the company actually announces they’re gonna do a buyout generally yes that stock will go up huge because
Generally if another company acquires another company they’re gonna usually pay between a 20 percent and 40 percent premium for those shares so if they announce that they’re gonna buy the company for a 30 percent premium you better believe that stock is gonna go up at least 20 to 25 percent that next day and maybe it will leave a five to ten percent cushion just in
Case the deal doesn’t go through and you know whatever government agency does not allow that deal to go through guys but that’s the fourth reason there the fifth reason is basically if an unexpected earnings is phenomenal in the guidance is phenomenal this will a lot of times make a stock shoot way higher guys so if a company was expected really bad earnings and
They just reported knock out numbers and they report great guidance then a lot of times that stock will shoot up massively at least in a short term if not over a long term because it’ll just more and more investors will see that the news out there it’ll attract more and more people look into the company to buy the company and be like wow this one’s on the right
Path they’re growing like crazy right now i need to get in this one before more people realize that this is going on over here right and more investors start flooding in so that’s what happens a lot of times guys like a lot of times you know you’ll see a company that they’re supposed to report some crap numbers and then they’ll send they come out and they just
Report these bombshell numbers and it’s like whoa how’d they do that and then what happens generally speaking if their numbers are great and their guidance is great and they were expected to not report those great numbers times f stocks shoots up massively guys so those are the five reasons on why stocks shoot up massively especially in the short term guys that is
It i mean over the long term over the long haul generally it’s just execution a company’s execution how the execution is over the you know three-year five-year span that’s gonna decide really whether that stock goes up or down but as far as a short term you know over a few weeks a few months span maybe a few days span like these are the five things that really
Move stocks massively in a short amount of time guys so i hope you enjoyed this hit that thumbs up button if you did leave me a comment if you have anything to say about this video if you have anything to add i would love to hear from you guys check out my book it is linked in that description goes through my entire stock market strategy and how i pick stocks if
You just came across this channel you may want to subscribe we talk personal finance in the channel we talk entrepreneurship i’m an actual business owner i give away so many business steps we talk stock market investing more than anything thank you for watching guys and have a great day you
Transcribed from video
Why Stocks GO UP HUGE By Financial Education