Why Stock Markets Keep Going Up While The Economy Is So Bad

Why Stock Markets Keep Going Up While The Economy Is So Bad

Confusion is one of the worst mental and emotional tortures. This article is to resolve the confusion of the conflict of how the economy can be so bad and the stock markets at all-time highs.

I have been trading the stock markets for over 13 years. Using the insights gained from an objective view of life, I have found the tricks and ways to succeed.

Let’s start by explaining how the values ​​and movements of the stock market are determined.

The markets are a weighted average of a very small and selected number of companies. While there are thousands of public companies, the top three US markets in which those companies are listed do not represent objective reality.

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

They use a weighted average of only those select few companies to determine market value.

This means that if Apple goes up significantly in one day, while most other companies on the NASDAQ go down, then the NASDAQ will go up, because Apple is such a big company that it surpasses all the others.

Apple is worth over $2 trillion. If the combined value of all the other 99 companies is just under $1 trillion, for example, Apple only affects the movement and value of the market twice as much as the 99 combined. Likewise, if all the companies on the NASDAQ go up, but Apple goes down, the market will go down.

Large companies receive more ‘votes’, so to speak, than small companies.

In August 2020, the markets are at an all-time high, yet more than 60% of public companies are still making significant losses.

Stock markets have nothing to do with the real world market, the select few are the only ones that count.

My next article titled; “Emotion Based Stock Trading” will explain another quick market that leads people to bad investment decisions and show you how to make money using a method I developed that is 95% successful.

People read about markets going up, so they buy shares in different companies, and those shares go down, and they’re confused. ‘Why are my stocks going down, or not going back up, if the markets are at all-time highs?’

Because it is not a market that goes up or down, but a handful of companies. Let’s use the analogy of a mall. There is a large grocery store in the mall, they are always busy, but the small independent stores are out of business and making no money.

The mall owner says the mall has the highest sales ever, because the only tenant counted is the grocery store, ignoring the small stores.

Another example of how the rich control the markets was a joint effort between CNBC TV, one of the most watched and trusted stock market programs, and Bill Ackman, a billionaire stockbroker. Being such a big fund manager and a wealthy man, people trust and respect what Ackman says and follow his advice.

On March 18, 2020, Mr. Ackman was allowed to emotionally rant on CNBC for over 27 minutes, far longer than other people he interviews. He went on the air with such an emotional plea about the coronavirus and his life-threatening, crying in fear for the safety of his father. Ackman named several companies and industries that he said would go bankrupt and the value of his stock would drop to zero.

You can see the full interview here https://www.cnbc.com/2020/03/18/bill-ackman-leads-to-trump-to-increase-closures-to-save-the-economy-shut-it-down-now.html

As he spoke, stock markets crashed as investors sold all their shares in those and other companies. That was the bottom of the market crash, shortly after his TV spiel ended, stocks began to rally.

A week later, CNBC reported that Ackman made more than $2 billion in profit that week, BUYING the very companies he said were going to be worth zero and fail.

This is just my opinion, but it sounds like obvious manipulation of the stock markets by Mr. Ackman, with the support of CNBC. Yet the SEC, the government regulator that protects people from this type of market manipulation, has done nothing about it. Once again, the super-rich 1% get away with destroying the lives of little people who sold or were forced to sell their stocks at significant losses due to margin calls or panic while the markets crashed during their TV spiel. .

This is the type of event that makes people wary of the stock market. But we must not give up so easily.

The lesson I’d like to pass on to you is that the business world is built on greed, but you already know that. The real lesson about the stock market is; accept reality and find the ways they are trying to trick you, then follow their tricks.

Don’t be mad because they are liars and cheaters, that’s just your definition of what they do. They call it smart business. Good and evil are a matter of subjective opinions. In this world, the opinion of the rich is over the one that makes the laws and rules. So play by their rules and you will win.

But please try to be a better person with the money you make than those who control the system.

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