No Brandon,
Good question. In fact this is quite normal for most people who begin economics. The answer would be lengthy and complicated, but the short version is this: Company stock prices are not based on value, but perieved value, in other words the stock is worth what people are willing to pay for it. The purest form of valuation is the market, this means that the thoughts you just had, are already factored into the price. In fact the theory is that all news is already factored into the price of stock real-time. Valentines day does increase sales and therefore revenue for both Victoria Secret and hershey's but, that was already a consideration for investors who invested in October and November of last year. Get it? Because its a predictable pattern, every Valentines day hersheys and Victoria secret are expected to increase their sales, its already factored into the price. Just like here in Florida, Home Depot and Lowe's sell more lumber during hurricane season.
So to answer your question. No you did not do a bad investment in order for a company to even be listen on NASDAQ, NYSE or AMEX it must be a very strong company. However, your investment should be made looking at the financial strength and trends of the company. Like, are you buying close to its 52 week High or Low? if the High then why is it trading to high? Look at the news. Is the price of thread going up? if it is that will surely affect the price of victoria secret stock because their items, at least some of them are made of lace and thread which will increase their product costs and lower their profits. Look at the news positive news means the stock will rise negative that it will fall.
Good luck hope this helps. I'm a Economics Graduate with a certificate in Business Administration, and some accounting background. You wont learn all this in 3 weeks, heck I didint solidify it until I did real investments post college.
And if you wrote a paper that said that predictable short term sales gains should cause the stock to go up, I would give you an F. Completely clueless....
In my high school economics class we are doing this game. It's like a virtual stock market. It uses real time stock information.
And I invested in Hershey's and Victoria's Secret/ltd.
this seemed like a great investment to me because valentines day is coming up. Men want to buy chocolates for their ladies and ladies want to buy lingerie to wear for their man.
And yet neither of these investments are making any positive yield.
Should I just sell them before they get too low? Wait it out?
