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janbb's avatar

To what do you attribute the stock market's high numbers?

Asked by janbb (56578points) 2 weeks ago

Are they seeing something in the country’s trauma that we don’t? Is there a silver lining somewhere? Or is that corporations are doing just fine right now with “stimulus” handouts from the government? Are we living in a corporate oligarchy while ordinary working folks suffer? Are they missing the coming potential crash?

I don’t get it but I have my suspicions.

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11 Answers

Jeruba's avatar

Perhaps it’s like a casino’s high numbers? For the house, that is.

And of course we do see that there’s a huge amount of money to be made in this crisis. Just not for the likes of you and me.

One guy who wrote a book about stock market investing said, “Don’t be fooled by all those advisors who tell you where to put your money. If they really knew, they’d have made a fortune themselves and retired a long time ago.” I think of that when I look at my little tiny holdings and notice that when one goes up, the other usually goes down.

zenvelo's avatar

There has been a huge injection of cash into the economy,(trillions of dollars) with nowhere to spend or invest it.

Couple that with a significant decline in the number of healthy, publicly traded companies, and you have a classic inflation case: too many dollars chasing too few investments.

janbb's avatar

@zenvelo So in layperson’s terms, are you saying that demand is more than supply making valuations unusually high?

ARE_you_kidding_me's avatar

Right now the stock market is a graph of wealthy people’s feelings. If COVID interrupts things in the Fall I suspect we’ll see a major correction and then an all out crash of the 2008 variety.

josie's avatar

Because in the entire world, whatever the challenge or problem, the safest investment is still the DJ or the NASDAQ ( i.e. the American economy)

It isn’t only Americans buying stocks on Wall Street.

When the world is turning to shit people still invest in the US, your negative opinion notwithstanding.

josie's avatar

On the other hand…
People can put their pension into the SSE OR SZSE
Or shoot them selves…
One or the other

janbb's avatar

@josie Don’t you worry about me. I’m a smart enough cookie that I have money in the stock market too. I’d just like to understand why it’s going up while everything around it is tanking.

josie's avatar

For the reasons I gave.
When everything is going wrong, there is one last thing that all people on Earth can believe in until it gets killed-the US market based economy. The US stock market has averaged a 10% return over the last 50 years. Tough to beat unless you are a particularly lucky/prescient investor, or a politician.

And not to worry. I’m plenty busy worrying about myself.

stanleybmanly's avatar

To me the latest surge is the most reliable indicator of the excess of people granted pandemic relief money—those who neither deserved nor needed it. Casino is exactly the metaphor for the market.

SunnyLax's avatar

It’s a trap.

dabbler's avatar

I attribute the ridiculous valuations in the stock market on the complete disconnect of the stock market and the parasite class (top 0.01% and wealth-extraction industry) from most of the population.

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