Toyota shareholders sue over fallen stock price.

Greed and easy money. Thats the real problem with the USA.

The stockholders might as well snug up their panties and go on with life. IMO, they are wasting their time.

I have a lot of great stocks that were devalued as much as 40% during the last crash. The companies are still good, the dividends are still being paid, etc. The price of a stock has relatively little to do with those factors, sometimes.

They should be happy that the Japanese government is not nationalizing Toyota. If Toyota stockholder win this suit, what should GM stockholders do?

Ed

The price of stock is simply what somebody is willing to pay for it.

A company can be worth a milion dollars have have a million shares of $100. Doesn't mean the company is worth $100mil. It simply means that stocks are being bought and sold for $100. If somebody were to try and sell off a hundred thousand shares, prices would plummet and you'd start seeing share prices in dollar range or possibly lower.

Yep. Like a Ponzi scheme, more money has to go in than come out. But dividends are real. And before Wall Street got in the paychecks of Americans via the 401k, which vastly inflated stock prices, most middle class investors in the market were looking for dividends in retirement. Others chose to save money in savings accounts, and interest rates beat inflation. Huge difference between now and then. Real money versus fantasy stock prices.

--Vic

The biggest cause of the inflated stock prices weren't 401K traders but day traders. Computerized stock buying by wallstreet was just as bad and probably caused most of the speculation and hysteria.

I never engage in equity trading, and saved my retirement money in simple 401k money markets and CD's. Didn't get rich, but was frugal with cars and didn't care about the Jones, and was lucky enough to buy my house before the real estate market took off, so I'm ok. Ok is good in my book. But since I do like to gamble I put aside some money each year to trade commodities, and learned quite a bit about trading. You need volume to move markets. I don't know what percent of the equity market is 401k contributions, but found this:

"In the mid-1980s, there were fewer than 8 million participants with less than $100 billion of assets in 401(k) plans.[3] By 2006, there were seventy-million participants with more than $3 trillion of assets in 401(k) plans.[3] There were 438,000 companies sponsoring 401(k) plans in 2003.[2]"

Some other stuff in there about 401k's keeping the market propped up,

"401k plans are a way to prop up artificial markets since you are not investing it a controlled manor, or for a giving purpose, but investing in the stock market no matter if it is up or down, thus are always push the stocks up, even if the company in the 401k plan is not doing well.[4]."

Makes you wonder about the expertise behind this when "manner" is spelled "manor," but hey. Anyway, I've seen how volume leads to escalating commodity prices despite the "fundamentals." I might be wrong, but 401k contributions and escalating stock prices track pretty well. And the biggest reason for the Wall Street bailout was to protect all the workers that have their "savings" in that big casino. Just my view. I do know that when I trade commodities I go in with money that is "discretionary." Lost about 5 grand last year, so that might be all over. No heart. I won't risk my basic retirement money.

--Vic

Orange County California Sues Toyota