It is pretty ridiculous to see things like this:
Doesn't matter what happens in the world (economy), stock prices go up and to the right.
The habit, as we all know, is buying the dip. Over the past 10 years, the S&P 500 has been hit by a series of crises and corrections: rate pressure, valuation worries, Covid-19, tariffs and now the Iran war. And in each case, the market came back shortly. Even after the deep lows of 2022, it only took 15 months to hit a new all-time high. With that history drilled into investors’ (and algorithms’) memories, it doesn’t take much of a reversal for optimism to take hold.
but hey, maybe it's all efficient after all?
similar steady upward trajectory is visible in market fundamentals. S&P 500 earnings per share have compounded at 11 per cent a year over the past decade. Only the Covid crisis was able to slow the upward march — and the lost earnings of 2020 were made up in the hyper-stimulated economy of 2022.
If indexes like the S&P or the Dow are moderately accurate representations of "the economy," it makes sense to me that they would be up and to the right-only. Humans are better off now than they were decades ago: we build more stuff, we have more power/energy at our disposal, we have more efficient technologies.
What I don't believe is that such indexes actually are accurate representations of the economy. It seems to me that the basket of companies represented in them is highly political, so in that sense, it's pretty surprising that it goes up as time goes by.
yes, or, and I can't believe I'm saying this, the money unit is evaporating. And because we know both of those things are happening at once, we can't separate out what's real and what's accurate representation anymore
If they ever go up and to the left, we'll have something really interesting to talk about.
what, the reversal of time?!
I suppose all stock prices fall to zero in case we invent time machines...?