Increased demand for stocks and its effect on the stock market.

L

Laissez Faire

Hi all,

Is actual demand for stocks something people consider in their fundamental analysis of the market?

I don't know about the US or the rest of the world, but I know that in Norway, people traditionally have NOT been investing/saving in stocks. This have changed significantly for the last few years and now you have regular people actually saving in stocks for their pension on a monthly basis. I personally believe this is a trend which will continue and certainly so if we don't have a crash anytime soon.

Even my own girlfriend (hell, her mother also actually) who knows nothing about stocks are now saving in global index funds every month. Regardless of where the S&P is - a set amount of money is invested each month.

Increased demand for stocks means higher prices. And an increasingly large number of people seems to think that a dip is a great way to get in on a bargain as they're saving for the long run.

IMO, no matter our perception of pricing or general economics, the markets are 'rigged' to the upside and history shows us that the stock market is biased to the upside.

I'm not sure I've seen this discussed on ET, so I figured I should bring it up as the markets once again are printing ATHs and people once again are calling for a top or even a crash. Disclaimer: I'm not either a perma-bull or perma-bear.

Regards.
 
4 years ago I created a thread called ‘are we gonna run out of shares’.

There are many who argue stocks are bubble. Blah blah. A few argue they are cheap. These arguments in themselves are pointless.

Fact of matter is nobody knows. That’s why in history valuations swing wildly.

The real game is the smart money robs the dumb. At the moment the dumb money participation is low. Therefore it can only go up in the foreseeable future.
 
nooby_mcnoob said:
One thing is puzzling to me is that the balance of offer vs bid size consistently has offer size larger in aggregate. Why is that the case
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Prolly just my boys painting the supply demand trying to grab every share they can.
 
As OP is from Europe. I am starting to look at Europe seriously as the valuation is lower while the local interest rates are also lower compared to the US. Some day when the sentiment turns around the huge yield gap will close like mad.
 
Laissez Faire said:
Hi all,

Is actual demand for stocks something people consider in their fundamental analysis of the market?

I don't know about the US or the rest of the world, but I know that in Norway, people traditionally have NOT been investing/saving in stocks. This have changed significantly for the last few years and now you have regular people actually saving in stocks for their pension on a monthly basis. I personally believe this is a trend which will continue and certainly so if we don't have a crash anytime soon.

Even my own girlfriend (hell, her mother also actually) who knows nothing about stocks are now saving in global index funds every month. Regardless of where the S&P is - a set amount of money is invested each month.

Increased demand for stocks means higher prices. And an increasingly large number of people seems to think that a dip is a great way to get in on a bargain as they're saving for the long run.

IMO, no matter our perception of pricing or general economics, the markets are 'rigged' to the upside and history shows us that the stock market is biased to the upside.

I'm not sure I've seen this discussed on ET, so I figured I should bring it up as the markets once again are printing ATHs and people once again are calling for a top or even a crash. Disclaimer: I'm not either a perma-bull or perma-bear.

Regards.
More...


I think technically the stock markets are not rigged to the upside - it is actually the stock market index values which are rigged to the upside, not the share price of any individual company.
 
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