Confusion is one of the worst mental and emotional tortures. This article aims to resolve the confusing conflict over how the economy can be so bad and the stock markets at all time highs.
I have been listed on the stock exchange for over 13 years. Using the knowledge gained from an objective view of life, I found the tips and ways to be successful.
Let’s start by explaining how stocks and stock movements are determined.
The markets are a weighted average of a very small number of selected companies. Although there are thousands of public companies, the three major US markets in which these 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 on 100 companies. Although the Dow Jones only includes 30 of the more than 5,000 US stocks, the combined value of the 30 companies represents about 25% of the total value of all US stocks.
They use a weighted average of just these selected few companies to determine market value.
This means that if Apple goes up dramatically in one day, while most of the other NASDAQ companies go down, then NASDAQ will go up because Apple is such a big company that it trumps all the rest.
Apple is worth over $ 2,000 billion. If the combined value of all the other 99 companies is only less than $ 1 trillion, for example, then Apple alone is affecting market movement and value twice as much as the 99 combined. Likewise, if every NASDAQ company goes up, but Apple goes down, the market will go down.
Large companies have so to speak “votes” of travel than small companies.
In August 2020, the markets are at an all time high, however, over 60% of SOEs are still recording significant losses.
Stock markets have nothing to do with the real world market, only the privileged few matter.
My next article titled; “Emotion Based Stock Trading” will explain another fast paced market that leads people to make bad investment decisions and show you how to make money using a method I developed that is successful at. 95%.
People read that the markets go up, so they buy stocks in different companies, and those stocks go down, and they’re confused. “Why are my stocks going down or not going up, if the markets are still at highs?” “
Because it is not a rising or falling market, but just a handful of companies. Let’s use the analogy of a shopping center. There is a large grocery store in the mall, they are always busy, but the small independent stores have no business and no money.
The mall owner says the mall has the highest sales ever as the only tenant that is counted is the grocery store, ignoring the small shops.
Another example of how the rich control the markets is a joint effort between CNBC TV, one of the most watched and trusted stock shows, and Bill Ackman, a billionaire stock marketer. Being such a great fund manager and a rich man, people trust and respect what Ackman says and follow his advice.
On March 18, 2020, Mr. Ackman was allowed to make an emotional rant on CNBC for more than 27 minutes, much longer than other people they interview. He went on the air with such an emotional plea about the coronavirus and its lethal potential, crying in fear for his father’s safety. Ackman named several companies and industries that he said went bankrupt and their shares were worth zero.
You can watch the full interview here https://www.cnbc.com/2020/03/18/bill-ackman-pleads-to-trump-to-increase-closures-to-save-the-economy-shut-it-down-now.html
As he spoke, the stock markets crashed as investors sold all of their shares in these and other companies. It was the bottom of the stock market crash, shortly after he finished his televised rant, stocks started to rally.
A week later, CNBC reported that Ackman made more than $ 2 billion in profits that week, buying the same companies he said were going to zero and going bankrupt.
This is only my opinion but it sounds like an obvious manipulation of the stock markets by Mr. Ackman, backed by CNBC. Yet the SEC, the government regulator to protect people from this kind of market manipulation has done nothing about it. Again, the super rich 1% get away with destroying the lives of the little people who all sold or were forced to sell their stocks at large losses due to margin calls or panic as the markets collapsed during his televised rant.
This is the type of event that makes people wary of the stock market. But we shouldn’t give up so easily.
The lesson I would like to pass on to you is that the business world is based on greed, but you already know that. The real lesson regarding the stock market is; accept the reality and find the ways they are trying to cheat you, then follow their tips.
Don’t get mad because they are liars and cheaters, this is just your definition of what they are doing. They call it smart business. Right and wrong are all a matter of subjective opinions. In this world, the opinion of the rich is the one on which they make the laws and the 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.