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  • As an investor you will encounter days

  • where the Dow is up 1000 points.

  • We have the Dow intraday...

  • the biggest points gain ever.

  • One thousand and thirty six.

  • You will also encounter days where the

  • Dow was down 800 points.

  • The Dow Jones Industrial Average tumbled by 831 points, that's 3.2%.

  • The Dow dropping more than 650 points

  • the largest December decline since the Great Depression.

  • People ask all the time when they see a

  • huge move in the market.

  • Does this mean I'm going to lose my job? Does this mean I'm about to have the best year I've ever had in my business?

  • What is the relationship between what stock prices are doing

  • each day versus what's happening on

  • Main Street, what's happening in the \real economy?

  • I like to use an analogy of a man

  • walking the dog across a park.

  • Try to picture that.

  • You got a guy.

  • He's got a leash.

  • There's a dog on the other end of it.

  • They're walking in the same direction.

  • However, if you observe the way the man

  • crosses the park. His gait. His stride.

  • it's fairly straightforward.

  • Very few deviations kind of like an economic trend.

  • Then when you think about what the dog is doing. The dog is running around like a lunatic.

  • The dog is barking at people.

  • It darts to the left.

  • It darts to the right.

  • It strains on the leash.

  • Maybe it chases a squirrel, barks again. The thing with the dog is that's the stock market.

  • The man walking the dog is the economy.

  • So they both end up in the same place.

  • They're both sort of walking in the

  • same direction most of the time.

  • There's a lot less deviation in how the

  • man walks than how the dog walks and I

  • think when you consider the stock

  • market barking jumping back and forth

  • straining at its leash that's a really

  • good way to control your own emotions and to say to yourself "Ok the economy

  • is probably not fluctuating to the same extent that the dog is or the stock market is."

  • So we use that analogy all the time.

  • Here's the S&P 500 plotted against GDP growth. You'll notice that in any one

  • given year you can have some divergence between the two.

  • Look at 2009 real GDP fell 2.5%.

  • Stock market meanwhile went up 26% that year.

  • The 1970s all for some examples of that

  • 1975 real GDP meaning inflation

  • adjusted economic growth fell 0.2%. Stock market was up almost 40% that year.

  • Again, they're related kind of going in the same direction over long stretches.

  • But in any one calendar year, they don't necessarily have to look alike at all.

  • Now here's something really important.

  • All things being equal, even if I gave you next year's economic information,

  • what would you do with it?

  • You certainly would know what the reaction of the stock market or the bond market are going to be.

  • You could have any economic outcome and have any stock market reaction to it.

  • Up to an including a terrible reaction a great reaction or no reaction.

  • Now what about the reverse.

  • Do stocks tell us what the economy is about to do.

  • The answer is very unsatisfying

  • sometimes. So stocks are thought of as a leading indicator for the economy but

  • a lot of times they get things wrong or stock market prices overreact.

  • Good evening, The stock market went into a freefall losing more in one day

  • than it did on Black Tuesday in 1929.

  • I always point out in 1987. That was a 23% percent crash within one day. The economy didn't even notice.

  • I don't think anyone should panic because all the economic indicators are solid.

  • But we've had examples where the stock market has been an accurate predictor of what would happen with the economy

  • and maybe the best example would be the 2000 dotcom crash the worst day ever on Wall Street.

  • All the major indices are now down for the year.

  • We had an incredible economy from 1982

  • until the year 2000 and then all of a sudden the stock market was saying

  • things have gotten way too hot started to come down got worse spread from

  • technology stocks into mainstream stocks and within a year we were in a fairly long recession.

  • So there are times where the market is giving you that signal.

  • Then there are times where the market is giving you a signal that doesn't end up leading to anything.

  • And being able to tell the difference between the two is nearly impossible especially in real time.

  • So whenever you hear someone make a stock market forecast based on how the economy is currently doing

  • or how they think the economy will be doing, it's very important for you to remember

  • how many other variables impact stock prices and the stock market.

  • Everything from geopolitics, natural disasters, interest rates, tax rates.

  • Whether or not there is any kind of fiscal program that takes place. Whether

  • or not there is any kind of change in the law for things like buybacks or dividends.

  • There are so many things that can happen that are not GDP that

  • will affect the prices of stocks that it's nearly impossible to point to any one metric whether it's jobless claims

  • or economic growth or overseas economic

  • growth and say this plus this equals that. If it were that simple we would all be rich.

  • Everyone would know exactly how to invest and 2018 offers us a perfect example.

  • Exciting! Live! Breaking news!

  • The American economy growing at its strongest pace in four years Payrolls rose by 250,000 jobs.

  • So here's a year where you've got solid GDP growth you've got the unemployment

  • rate steadily dropping month after month millions of jobs being added

  • really no negative issues with the economy whatsoever.

  • All of the ingredients that you can ask for to say this is a good economy this is a good environment for business.

  • Stock market went down 5%.

  • You said yourself well wait a minute.

  • If you had told me at the end of 2017

  • that I would have all these great things I wouldn't have expected a down 5% year for stocks and that goes

  • to show you how many other ingredients there are that affect the outcome.

  • By the way expectations are one of the

  • most important ingredients we came into 2018 already expecting all that great

  • news. So stocks have been priced for the best we got the best and guess what

  • they were already worried about 2019.

  • The other thing I would mention if you think about the dog analogy walking through the park,

  • a lot of stock market participants expect the Federal Reserve

  • to watch the dog and to some extent the dog is worth watching.

  • But I do think it's important to

  • realize Jerome Powell the Federal Reserve chairman his real job is to focus on the man walking the dog.

  • And so you may see a lot of volatility

  • in the markets that doesn't necessarily get a reaction from the people who set monetary policy.

As an investor you will encounter days

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株式市場と経済の違い (The Difference Between The Stock Market And The Economy)

  • 13 3
    林宜悉 に公開 2021 年 01 月 14 日
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