Why is the stock market doing well?

[Anonymous]

Anonymous wrote:

Anonymous wrote:People go on vacation in August and don't look at their portfolios.

You can’t open your phone for 10 seconds to check on it while on vacation?

To the OP I think it’s mostly the AI bubble. Almost all the gains in US stocks have been from mag7 companies. Nvidia is making tons of money from the other mag7’s buying its GPU’s, however this might not be sustainable in the long term because the biggest customers to NVDA haven’t been profiting at all from their AI investments. Their customers do make a healthy profit from their other ventures which allows them to stay in the green, concealing the massive drain that AI has been on their profits. If the software AI bubble pops then hardware will follow, and this would collapse the US stock market

This. There was a piece by Krugman (and others) essentially pointing out that the advent of the passive investor (e.g. Vanguard) led to availability of capital and clockwork purchases of the big firms (NVIDA, Apple, Amazon, Google) etc. which has driven this stock market rally. The fundamentals are completely misaligned with stock prices of many of these firms.

[Anonymous]

My investments are still down for August.

[Anonymous]

Corporate buyback are at record levels which also drives up stock prices.

[Anonymous]

The mag 7 companies are now so over represented in retirement portfolios that they are too big to fail.

[Anonymous]

Just wait until they start allowing people to collateralize debt with crypto. It will be pandemonium.

[Anonymous]

Rate cuts

[Anonymous]

Anonymous wrote:The mag 7 companies are now so over represented in retirement portfolios that they are too big to fail.

Or rather, when they fail, they will bring the whole thing down with them.

[Anonymous]

Anonymous wrote:Just wait until they start allowing people to collateralize debt with crypto. It will be pandemonium.

Crypto will at some point be seen as a big scam too. It holds no intrinsic value, it isn't backed by a government, like the dollar. The only value it holds is the value people think it holds - but they won't think it holds value forever.

[Anonymous]

The range of responses here is hilarious and just proves the point that no one knows a god damn thing except that the S&P 500 steadily rises over the long term at about 8-10% a year and you are stupid to try and time the market based on your political feelings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Just wait until they start allowing people to collateralize debt with crypto. It will be pandemonium.

Crypto will at some point be seen as a big scam too. It holds no intrinsic value, it isn't backed by a government, like the dollar. The only value it holds is the value people think it holds - but they won't think it holds value forever.

That's true of every currency that ever existed, even gold.

[Anonymous]

Always does well before a major crash.

True by definition. I always lose things before I find them, too.

The stock market as a whole is a huge Ponzi Scheme.
The more people invest, the more it goes up and everyone makes money, some more than others.
So since people are making more money, they invest more, and it goes up more.

That is not how a Ponzi scheme works.

Crypto will at some point be seen as a big scam too. It holds no intrinsic value, it isn't backed by a government, like the dollar. The only value it holds is the value people think it holds - but they won't think it holds value forever.



That's true of every currency that ever existed, even gold.

Gold has intrinsic value (limited, but it has uses in electronics, for example). Crypto doesn't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People go on vacation in August and don't look at their portfolios.

You can’t open your phone for 10 seconds to check on it while on vacation?

To the OP I think it’s mostly the AI bubble. Almost all the gains in US stocks have been from mag7 companies. Nvidia is making tons of money from the other mag7’s buying its GPU’s, however this might not be sustainable in the long term because the biggest customers to NVDA haven’t been profiting at all from their AI investments. Their customers do make a healthy profit from their other ventures which allows them to stay in the green, concealing the massive drain that AI has been on their profits. If the software AI bubble pops then hardware will follow, and this would collapse the US stock market

This. There was a piece by Krugman (and others) essentially pointing out that the advent of the passive investor (e.g. Vanguard) led to availability of capital and clockwork purchases of the big firms (NVIDA, Apple, Amazon, Google) etc. which has driven this stock market rally. The fundamentals are completely misaligned with stock prices of many of these firms.

I remember being worried about the majority of money being index funds and how that will distort the market in a viscous cycle — and Burry came along with same concern.

https://www.bloomberg.com/news/articles/2019-09-04/michael-burry-explains-why-index-funds-are-like-subprime-cdos?embedded-checkout=true

But like they say, a bubble can stay inflated longer than you are solvent.

I do wonder if weakening dollar is one factor to; many companies are international companies, so their real value maybe stable but nominal value rises as the dollar deflates. Maybe. I’m more convinced of the index zombie markets than dollar pricing effects.

[Anonymous]

I’ll just leave this here for anyone who thinks that the stock market and economic reality are closely connected

[Anonymous]

Yeah, I was buying in 2008, but I’m definitely fearful of a 1948 rn, so just holding. Brutal!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just wait until they start allowing people to collateralize debt with crypto. It will be pandemonium.

Crypto will at some point be seen as a big scam too. It holds no intrinsic value, it isn't backed by a government, like the dollar. The only value it holds is the value people think it holds - but they won't think it holds value forever.

That's true of every currency that ever existed, even gold.

The problem is that many people are viewing it as an investment and not as a currency.