Who has Knowledge to read this SP 500 index chart ?

Discussion in 'Trading' started by TradeTune, Nov 26, 2021.

  1. Hi ...can anyone explain how SP500 gained in last two year as much as previous 11 years (from beginning 2009 to end of 2019) ?

    i understand that example TSLA, MSFT, Amzn ..etc , each has around 1-2% of index weighing , and if 5 largest stocks each gain 1% on certain day, index will go up by at least few % on that certain day .

    But still the index gain in last two years look crazy, I'm trying to figure out why would any inexperienced trader or investor buy a stock then ?


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  2. Nobert

    Nobert

    Because he is inexperienced.

    You can find good deals, if you know how, yet, those makes less than ~3% of the US market atm.
     
    JSOP likes this.
  3. You're joking - right?

    Start by not looking at nominal values and plot that chart logarithmically instead of linearly.
     
  4. Can you explain about index gain ?
     
  5. I know gain from logarithmic stock chart show it differently ... but still lot of gain in last 2 years , considering most stocks under 75B market caps has lost more than half their values since beginning 2021

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    piezoe likes this.
  6. Nobert

    Nobert

    I can't, because i don't know how.

    All that i know is that index is made up of a bunch, overvalued equities, while ~30% of those shouldn't be there in the first place and market cap alone, is a misleading measurement to make an index.

    There could be better ways to make one, but many institutions wouldn't like that.

    Instead of looking at the index, China, pandemics, interest rates & moon phases, a retailer should focus on learning how to buy great business at the right time. To evaluate companies.
     
  7. BKR88

    BKR88

    Provide some data on this please.
     
  8. many ADR and OTC stocks have lost more than 50% of their of their value in 2021 alone, if you have hundreds of stocks in your portfolio , you will know that already
     
  9. Data not anecdote please
     
    BKR88 likes this.
  10. BKR88

    BKR88

    "many ADR and OTC stocks"
    How many of these make up the S&P 500 Index?
    I think you have a bias based on your view from the statement above which is incorrect.
    Some of the "Crazy Cathy" type of stocks have been doing poorly but what percentage of the S&P is made up of this type of stock?
    S&P 500 Index is cap-weighted so 75 Billion dollar companies don't affect the index much.
    LMT is ~ #100 on the list with a market cap of ~$100 Billion but only has .21 weighting. AAPL & MSFT account for more than 6% each.

    https://www.slickcharts.com/sp500
     
    Last edited: Nov 26, 2021
    #10     Nov 26, 2021
    TradeTune likes this.