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Businesses Should Keep One Eye On Rival Stocks - Here’s Why

Posted on | March 24, 2016 | Comments Off on Businesses Should Keep One Eye On Rival Stocks - Here’s Why

Businesses are all essentially in one giant competition, and there are winners and losers. The winners will be the successful companies that build a massive audience and spark consumer interest. Of course, there are businesses that just aren’t very successful, and are swallowed up as quickly as they began.

Business owners and investors alike should be keeping one eye on their rivals - especially rival stocks. In most cases, these are publicly available figures that you can use to determine what future action you will take. While they aren’t a die hard indicator of the success of a company, they can still be used to glean valuable information about their current state.

What does my rival’s stock price tell me?

Anyone can access stock numbers; even an everyday iPhone user has this power in their pocket. Companies can live or die by their stock price, so it’s surprising that this information is generally made public.

That being said, this means you can use it to your advantage. If you notice that the the price of your rival’s stock has declined over the last few weeks, you should be finding out why. This can help you to avoid a mistake that they may have made which resulted in their stock price declining.

Conversely, if stock prices are soaring, take a look at what caused such success. See if you can apply these methods to your own business practices for similar results. What works for someone else won’t always work for you, but that doesn’t mean you can’t give it a try.

How can I use stock prices to my advantage?

In the most broad sense possible, these figures are a relatively reliable indicator of current success. So, lower prices means decreased success. There’s decreased interest in that company for investors, and the price of shares has declined. Keeping an eye on the stock market allows you see the highs and lows of a particular company, and that’s something that can help your business out.

Here’s an example. Let’s say your rival, Company R, has shown a decline in stock price over the last few weeks. You have to look at their recent history, and identify why.

Then, you find the answer. They recently made a product announcement about the DVD players they manufacture. They will no longer play pre-owned discs, and users will have to buy brand new copies to watch films. This decision is met with uproar from consumers, and sales of these DVD players have bombed.

So, this string of publicly available mistakes are yours to learn from. It gives you insight into how and why a company is successful, and lays out the pitfalls for you to avoid. This is a very basic example, but you hopefully get the idea. As a business owner or investor, using the state of your rivals to improve business practices is key. If you are an investor, there are some things you should consider before you invest, and this is one of them.

So, hopefully you now have a better understanding of how to use stock prices effectively! As previously mentioned, it’s not a surefire method, but it can help you in a general sense.