While the Economy Is Bad Why Stock Market Keep Growing ?

While the Economy Is Bad Why Stock Market Keep Growing ?
While the Economy Is Bad Why Stock Market Keep Growing ?

Gtkjatim.com - While the Economy Is Bad Why Stock Market Keep Growing ? Confusion is one of the most cruel mental and emotional torture. This article aims to resolve the confusion over how bad the economy can be and the stock market is at an all-time high.

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Let's start by explaining how to determine the value and movement of the stock market.

The market is a weighted average of the selected companies and the very few. Although there are thousands of public companies, the three main markets in the US where these companies are listed do not reflect the objective reality.

The Dow Jones is based on 30 of the 500 S&P companies, and the NASDAQ uses 100. Although the Dow Jones only includes 30 of the more than 5,000 US stocks, the total value of 30 companies is about 25 percent of the total. ... all US stocks.

They use the average number of selected companies to determine their market value.

This means that if Apple rallies in a day when most other NASDAQ companies fall, NASDAQ will rally because Apple is bigger than the others.

Apple is worth over $ 2 trillion. For example, if 99 other companies have a combined valuation of less than $ 1 trillion, then Apple's momentum and market capitalization is only double the 99 combined. down, the market fell.

Large companies get more "voice" than small companies.

The market hit an all-time high in August 2020, but more than 60% of companies trading as a whole were still at a loss.

The stock market has nothing to do with the real world market. Only a few of them are important.

People are reading about growing markets. So they buy shares in the company and the shares go down. and they were confused: "Are my stocks going down or not going up if the market is always high?"

Because the market is not growing or falling, but only a few companies. Try to compare department stores. The mall has a large grocery store. They are always busy. but small independent shops No business and no money

Department store owners say department stores have the highest sales ever. Because the only rent that matters is the grocery store. Not interested in small shops

Another example of how the rich control the market is the joint venture between CNBC TV, one of the most popular and trusted shows on the stock market, and billionaire stock trader Bill Ackman. Because he is a large and wealthy fund manager. Be the one who believes and respects what Akman says and follow his advice.

On March 18, 2020, Akman was allowed to chat on CNBC for 27 minutes longer than anyone else. that they interviewed a lot. He lifts the air with emotional statements about the coronavirus and how he might die crying for fear for his father's safety. Akman named several companies and industries that he said will go bankrupt and the value of shares will fall to zero.

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