Confusion is one of the worst mental and emotional torments. This article should address the confusion of how the economy can be so bad and the stock markets at the highest levels ever.
I’ve been trading in the stock market for over 13 years. Using an objective view of life, I have found ways and means to succeed.
Let’s start by explaining how securities market values and movements are determined.
Markets are selected միջին Weighted average of very few companies. Although there are thousands of public companies, the three major US markets in which those companies are listed do not represent an objective reality.
The Dow Jones is based on 30 companies, the S&P is based on 500 companies, and the NASDAQ is based on 100 companies. Although the Dow covers only 30 of the more than 5,000 shares in the United States, the total value of 30 companies is about 25 percent of the total value of all US shares.
They use only the weighted average of those few selected companies to determine the market value.
This means that if Apple goes up significantly in one day, while most of the other NASDAQ companies go down, then NASDAQ will go up because Apple is so big that it’s ahead of everyone else.
Apple’s value exceeds $ 2 trillion. If the total value of all the other 99 companies, for example, is less than $ 1 trillion, then Apple only has twice as much impact on market և value as the 99. Similarly, if every NASDAQ company grows, but Apple goes down, the market goes down.
Larger companies, so to speak, are given a “voice” of the movement than small companies.
Markets are at an all-time high in August 2020, but more than 60% of public companies still suffer significant losses.
Stock markets have nothing to do with the real world market, the chosen ones can all.
My next article is titled; “Emotion-based stock trading” will quickly explain another market that leads people to make bad investment decisions, show you how to make money using my method և 95% successful.
People read about the growth of markets, so they buy shares of different companies, և those securities go down, և they are confused. “Why do my stocks go down or not return if the markets are the highest ever?”
Because it’s not a rising or falling market, just a few companies. Let’s use the analogy of a mall. There is a big grocery store in the mall, they are always busy, but the small independent shops have no business and do not make money.
The owner of the store says that the mall has the highest sales of all time, as the only tenant that counts is the grocery store, ignoring the small shops.
Another example of how the rich control the markets is the joint efforts of Bill Ackman, CNBC’s billionaire stockbroker, one of the most watched’s most trusted stock markets. Being the manager of such a large fund, a rich man, people trust, respect what Akman said, and follow his advice.
On March 18, 2020, Mr. Akman was allowed to gossip for more than 27 minutes on CNBC, much longer than the other people he interviewed. He came out with such an emotional plea for Coronavirus և it’s deadly potential, weeping for fear of his father’s safety. Akman mentioned the names of several companies և sectors, which, according to him, will go bankrupt, the value of their shares will reach 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 market collapsed as investors sold all their shares in those other companies. This was the last point of market decline, when he finished his TV commercial, stocks began to recover.
One week later, CNBC reported that Akman had made more than $ 2 billion in profits that week, with the same companies that he said would have zero value going bankrupt.
This is just my opinion, but it sounds like an obvious manipulation of the stock markets by Mr. Akman in support of CNBC. However, the SEC, the government regulator that protects people from such market manipulations, has done nothing about it. Again, the super-rich 1% avoid ruining the lives of the little people who all sold or had to sell their shares at a significant loss due to margin calls or panic while markets collapsed on his television.
This is an event that makes people distrust the stock market. But we should not give up so easily.
The lesson I would like to teach you is that the business world is based on greed, but you already know that. The real lesson about the stock market is the following. Accept the reality, find the ways in which they try to deceive you, and then follow their tricks.
Do not be angry that they are liars, you are just a definition of what they do. They call it smart business. Right and wrong are a matter of subjective opinions. The opinion of the rich in this world is the basis on which they make laws and rules. So play by their rules և you will win.
But please, try to be a better person with the money you earn than those who control the system.