Why the Stock Market Might Be Broken
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Yes, but we've got a magic wand that can create money that have value because we believe in it. 🪄
So why not stonks too? -
Is it possible the inflation of the market could be from the number of Americans invested in stocks? Could these high price to earnings be the new norm?
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Markets at all time highs make me nervous. Heavily backing SCHD right now. But I’m still open to buying more because some brilliant companies seem at good prices. What’s everyone’s thoughts?
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A wise individual understands that accumulating wealth necessitates prudent investments and informed guidance in the financial market, particularly during a stock market crash. While the stock market presents opportunities for maximizing profits, successfully navigating it requires skill and expertise.
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"a little bit of this, a little bit of that" ahh video
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The only ones concerned about index funds are the active managers who are afraid the public has caught on to the fact that they can't beat the market.
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My portfolio doesn’t just cater to dividend stocks. I hold $VFIAX (S&P 500 index fund) in my Roth IRA and $VTI (Total Stock Market ETF) in my taxable brokerage account. Two of my largest holdings. The individual dividend stock positions all complement the index holdings.
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Things I wished were included in this video P/E ratio, shiller pe, Michael Burry warning about this same thing, less speculation and more research.
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I Hit 110k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Brooke Grace Miller for helping me achieve this
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Old people are giving advice about what has happened for the last 50 years, but over inflation hasn't happened since 1929, so the real people who lived through what is happening are so old they are no longer around. It doesn't always go up. At some point an over inflated market will crash.
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If this passive index investment was causing stock inflation problems, you could have looked into the argument of why not invest in a index of the S&P 1500 and such. 500 is not a magical number.
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The theorey was never off. It was just designed to be like a parasite in a whale. Feeding off a mass so large it doesn't even notice. But the whale now has a full layer of parasites, and the parasites also have parasites. The entire ocean revolves around the parasitism of the whale now.
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take those charts, instead of price, replace data with earnings. And you'll see the same charts. It's the most powerful, curated list of public equities. Competitive advantage grows over time. It has nothing to do with EMH.
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Is it really indexing or just simple money printing? 💸
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Mah
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i don't think you understand how index works… The S&P500 is self cleansing. So you'll always be investing in the best companies.
Whether there's a bubble or not, you're always investing in the best performing assets and it's simply the best one can do.
Second of all, you're extremely disingenuous to point to the S*P500 graph and do the finger motion following its hyperbolic growth… That's a linear scale. If you plot it on a log scale, you can visualize better the prior years changes as a percentage and the growth has been pretty steadily 10% over time.
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The 401k destroyed the 'real' stock market. Our stock market was never designed for people to throw 6-10% of their money into it and assume it will go up.
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this argument that people will sell their index funds en-masse is flawed in that passive retirement investors are inherently slow in moving. There would have to be a nationwide disaster to get enough people to change their investments. And statistically there are practically no one SELLING in their 401Ks. The average person has no awareness or practical ability to do this unless they panic and move straight to low risk funds… bu then when the disaster doesn't come, they move back. soooo… none of them really sell when you look at it over a period of years
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Active managed funds used to be far worse on their fees. I remember my first retirement account in the late 90's still had mutual funds listed with front and backend loads that ended up being around 4% (!) vs 0.5% for the SP500.
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Hmmm… at 1:04 Don't you need to adjust those index graphs to GDP and inflation? They have been going up, but it's not so outrageous when you offset against those 2 factors Yes the multiples out there are very high, but it's not the insane exponential rise you are making it seem it is.
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Print more money, number go up.
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thank you for saving me 15 min video
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Stocks are a ponzi. Simple as that
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I believe the issue with index funds is that they relinquish shareholder rights, including the ability to participate in company decision-making through general meetings. While this may not seem like a significant loss at an individual level, I wonder if the collective impact is greater. Specifically, I question whether a larger portion of the money ends up in the financial services industry and contributes to increasing CEO compensation within the companies.
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I Hit 110k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started last month. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Wendy Stewart for helping me achieve this.
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Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2025?
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Woah, the scam fake conversations in this comment section are really out of bound 😒
Hope nobody falls for that. -
Just look at the P/E ratio. It's a bit higher than in the 1930s-1980s. But overvalued? I don't think so.
Of course there is a chance that the government finally realizes that missing competition increases prices disproportionally which could lead to a crackdown that would lead to lower earnings and a collapse of the market. But even then, earnings are still high enough to recover the losses after several years. -
The charts looked like that in 2001. 23 years later it's chugging along just fine.
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What if you price the market in gold instead of money that can be printed easily? Does that change your perspective? It should.
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The Ponzi Factor
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Aren't poor performers k*cked from the S+P?
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> put your money into a stock, index, mutual fond. Always works.
As a Russian with every stock blocked, I must tell that NOT always, at least not for ordinary people.
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All in all the market is only a big P2P credit.
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My portfolio for the past 30 years has always been self managed and I own 3 shares of Berkshire Hathaway Class A stock (BRK:A) which I bought in at about $17,000 during the mid 90s, I'm currently liquidating some of these positions to incoporate new Gen. Stocks, but am I better off re-investing into Gold as it seems stocks are a little too unstable right now.
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One of the biggest reasons for the stock market boom in the last 50 years is because the dollar has been on a fiat currency and has lost over 98% it’s value and the stock market has preserved its value and grown over the same 53 year time period. The stock market will likely keep going up because the value of dollars keeps going down.
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❤❤❤❤❤
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People don't always understand the WHY the graph is going up exponentially. The answer is simple:
INFLATION
More and more money is going into and chasing stocks on the stock market. These dollars are created through inflation.
The stock market going up in price is similar to groceries and gas going up in price. Not all markets go up in inflation evenly over time. Sometimes the inflation is on Wall Street and sometimes Mainstreet.
Price to earnings of stock keeps going up so in effect it costs a person more money to buy X amount of corporate profits and Y amount of corporate assets.
When all houses on average go up in price by 100% no one "made money." Your property taxes will be more and if you sell your house then you can buy less with that money.
Stock is just an easy to liquidate scarce asset people can buy to ride the wave of inflation.
What happens is simple. A very small number of people own new stocks people want to buy. Those few who own lots of this stock sell some for giant sums of money as 401K and IRA money comes rolling in. Those rich few then pile up tons of money they spend on luxuries. This explains the widening wealth gap between the ultra-rich and everyone else. Ironically these few ultra rich can't buy too much food or necessities so those stay relatively lower cost. The sea of money froths in asset and equity markets. Sometimes it can spill out into Mainstreet causing inflation.
In our monetary system every single dollar of wealth has a dollar of debt tied to it. It is a debt backed monetary system. This means if there is a liquidity crunch that deflation could hit hard and rapidly.
There are also quadrillions of derivatives behind all the asset/equity markets. These attempt to make the market more stable by "reducing risk" by spreading it out but you cannot ever spread it outside of the markets themselves, so risk remains. We saw this in action in 2008 when a few bank failures threatened to bring everyone down because they were all "insuring" each other's debt through derivatives.
It's all an unstable mess that nobody knows where it is heading. It may go up for the next 100 years just fine or it may break tomorrow.
You CANNOT predict a chaotic system.
I am currently investing 50% of my money into 401K/IRA and another nonretirement investment account (mostly into index funds). I save a decent amount in these. HOWEVER, I also bought $60,000 in gold/silver that is worth 2.5 times that now, I have my house paid off and I have no debt. I also have 8 $3,000 CDs that has one maturing every three months and some money in a money market fund and checking account for emergency. I live below my means as I drive a 13-year-old car, I have a small house in an inexpensive area, and I rarely buy much.
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The reason people invest is they don't have a choice. Because of high housing prices they need a lot of capital to get in to housing. Because the government controls interest rates and makes them too low, inflation and low interest force you in to the stock market. The problem is low interest and high inflation mainly benefit leveraged investing, not investing your cash, but your debt. This debt is only easily accessible to governments and large institutions and wealthy individuals with high assets. So all those leveraged investments make the rich richer. None of this is natural. If the government was not involved, we'd have high interest rates and low inflation and people would not be rushing in to the stock market, and debt investments wouldn't make large incomes, and would be vastly reduced, reducing speculation also. That would also reduce asset prices and you wouldn't need to save up $800k in the stock market before buying a home.
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After you're alive for a few decades you realize that all corners of the market are capable of having a bubble at any time for any reason.
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MIGHT BE! that's tell you all that this video is BS
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IVV forever
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Nobody cares about the true value of a stock. why?
You forgot the fact that money printing happens every year. That money is parked in the stock market.
The stock market is just a lifeboat against global money printing.
The index is not going up, your money’s value is being diluted down
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I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
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you did not mention something which your video does show…. dollar cost averaging. The person putting in money every week will receive the advantage of the market going up and down over time as they will be investing over time.
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Premises – are somehow by definition not verified – if they are verifiable at all.
("The universe is fundamentally explainable" for instance)
Basically, you are describing the other side of limitless growth.
Turned out to be a ponzi scheme….the fake is in the system. -
too fast? they expoential returns.
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Hey I'm a prop trader and I just wanted to say that you did a great job on this video. Keep it up!
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