Volatile Stocks & Rational Companies
If you haven’t turned on the TV or Computer for a number of years, here is a summary of market headlines:
“Proof the Stock Market Has Gone Nuts”
“Why the Good Times Might Really Be Over”
“World Is Drowning In Debt Goldman Warns”
“Beware of the European Crisis of 2017”
The mental wounds from the Great Recession are far from healed despite the stock market appreciation. The following chart shows the S&P 500 bottom through yesterday, an increase of 252%.
An event like the Great Recession remains on our minds 6 years later. Which is very real and consistent with human behavior. However, the part we believe the media seems to forget is the fact that the stock market represents real companies. Companies that create new efficiencies and technology to adapt to an ever changing landscape. Companies that collect massive amounts of data and make rational decisions based on fundamentals to make a profit.