Nvda and law of large numbers

[S2007S]

Montly record setting, a gain of nearly $300 billion in market capitalization in 1 month.

There are companies around for more than 100 yrs that haven't surpassed a 1/100th of a gain in market cap what they did in 1 month


now remember there will be a record when it loses a record breaking amount of market capitalization in a month too.




The world's most valuable chipmaker saw its market value expand by an unprecedented $296.52 billion to about $1.52 trillion, surpassing its previous high of $248.23 billion in gains seen in May 2023.





https://finance.yahoo.com/news/nvidia-sets-monthly-record-unprecedented-070220659.html

 

[Businessman]

Montly record setting, a gain of nearly $300 billion in market capitalization in 1 month.

It is called compouding:

If a $1 million company goes up 20% on good news, market cap goes up by 200K
If a $1 billion company goes up 20% on good news, market cap goes up by 200Million
If $1 trillion company goes up 20% on good news, market caps goes up by 200Billion

When a companies hits $5T trillion market cap, they could quickly add 1trillion more during a good news month, so expect to see that record set in your lifetime.

If the US stock market averages 6% a year (excluding dividends), by year 2050:

The Dow will be 160,000
The S&P will be 20,000
The NDX will be 70,000

Most of that is going to be keeping up with inflation!

The markets can be serious volatile in the interim.

NDX crashed to 1/5th of its value between 2000 and 2002, before running 18x over the next 20 years.

Although the market could well be up 4x by 2050, in between then its going to be crazy volatile.. Even if we don't see a 80% crash I expect to see more than one correction/crash in the 30% to 50% range over that time.. but the long term trend is up...

 

[S2007S]

It is called compouding:

If a $1 million company goes up 20% on good news, market cap goes up by 200K
If a $1 billion company goes up 20% on good news, market cap goes up by 200Million
If $1 trillion company goes up 20% on good news, market caps goes up by 200Billion

When a companies hits $5T trillion market cap, they could quickly add 1trillion more during a good news month, so expect to see that record set in your lifetime.

If the US stock market averages 6% a year (excluding dividends), by year 2050:

The Dow will be 160,000
The S&P will be 20,000
The NDX will be 70,000

Most of that is going to be keeping up with inflation!

The markets can be serious volatile in the interim.

NDX crashed to 1/5th of its value between 2000 and 2002, before running 18x over the next 20 years.

Although the market could well be up 4x by 2050, in between then its going to be crazy volatile.. Even if we don't see a 80% crash I expect to see more than one correction/crash in the 30% to 50% range over that time.. but the long term trend is up...

No one would believe that between now and 2050 that the markets would never ever have a 30-50% correction.

 

[S2007S]

It is called compouding:

If a $1 million company goes up 20% on good news, market cap goes up by 200K
If a $1 billion company goes up 20% on good news, market cap goes up by 200Million
If $1 trillion company goes up 20% on good news, market caps goes up by 200Billion

When a companies hits $5T trillion market cap, they could quickly add 1trillion more during a good news month, so expect to see that record set in your lifetime.

If the US stock market averages 6% a year (excluding dividends), by year 2050:

The Dow will be 160,000
The S&P will be 20,000
The NDX will be 70,000

Most of that is going to be keeping up with inflation!

The markets can be serious volatile in the interim.

NDX crashed to 1/5th of its value between 2000 and 2002, before running 18x over the next 20 years.

Although the market could well be up 4x by 2050, in between then its going to be crazy volatile.. Even if we don't see a 80% crash I expect to see more than one correction/crash in the 30% to 50% range over that time.. but the long term trend is up...

Look at the 1989 collapse of the nikkei.

Was just around 40,000 and wham, straight down ....got down below 10,000!!!!


Another marker that is literally going up without any signs of slowing down is India. There market now is at 73,000!

The amount of upward momentum around the world should have people thinking these grand times don't last forever...we have seen it before where markets collapse. Yes they come back but it's not pretty for anyone when you see nothing buy a straight down drop wondering when the fed is going to step in. Which we know they always do. If markets were dropping as quick as they have been rising the fed would have done 2 emergency rate cut meetings.

 

[Businessman]

No one would believe that between now and 2050 that the markets would never ever have a 30-50% correction.

Sure there will be at least one correction, but the question is how many 30%+ corrections will we get between now and 2050, before the Dow hits 160,000 (just 6% a year return from current levels). . And could we see a big one, 75%+

Between 1975 and 2000 there were not that many 30%+ corrections. Perhaps only in 1987. The market went up around 12x over those 25 years.

Between 2000 and 2024. There have been 4, 30%+ corrections. But the Dow and other indicies still went up around 4x. The NDX even had a 80% crash but is still up almost 5x since the start of this century.

They say the US nifty 50 stocks had 75% crash in the 1970s, the NDX crashed 80%+ in 2002.

The MAG 7 stocks could have a 75% correction at some point but could double first.

 

[NoahA]

Between 2000 and 2024. There have been 4, 30%+ corrections. But the Dow and other indicies still went up around 4x. The NDX even had a 80% crash but is still up almost 5x since the start of this century.

I think about this all the time as well. Us guys who are perma-bears have been getting smocked for the past 15 years, so I can see now that it almost doesn't make sense to be bearish. Its kind of like that quote about forgetting to live if all you're focused on is not dying, which everyone eventually will.

But by many metrics, there has been no real recovery for the economy since 2008. Its all just been Fed intervention. In a way, the bears got part of it right, but nobody imagined the extent to which the manipulation could continue. I mean zero interest rate policy for 15 years, ballooning debt, decimation of the middle class, and yet, the system continues to function.

But I also think that the market going higher is predicated on everything continuing as is. What are the chances that the 34T debt doesn't matter for the next 10 years, and at which point, it will be easily over 50T? Can the US truly run 2-3T deficits year after year? If to get this far, we had to hollow out the middle class, who else is left to steal from to keep this going for another 10 years? Buying dips only works if the financial and monetary system doesn't change. But I don't believe it can be kept together for much longer, and so a new set of rules will emerge when the dust settles. Values of everything will be repriced, and even what we price things in might change.

 

[Businessman]

But I also think that the market going higher is predicated on everything continuing as is. What are the chances that the 34T debt doesn't matter for the next 10 years, and at which point, it will be easily over 50T? Can the US truly run 2-3T deficits year after year? If to get this far, we had to hollow out the middle class, who else is left to steal from to keep this going for another 10 years? Buying dips only works if the financial and monetary system doesn't change. But I don't believe it can be kept together for much longer, and so a new set of rules will emerge when the dust settles. Values of everything will be repriced, and even what we price things in might change.

Yeah the likes of Jim Rogers have been saying for the last ten years the next crash/bear market is going to the worst in his 80 year lifetime with all the government debt around the world especially in the US. He will eventually be proved right but the Feds are good at keeping the stock market inflated, so he will strictly be proved wrong as he will probably have passed before his 'in his lifetime' prediction comes true. AI is the latest bubble.. AI is the real deal like the internet was back in the 90s but if the market gets ahead of it self there could be another AI led crash.

I stopped listening to Rogers' interviews years ago because they are all the same, but this post made me dig out his latest interview, cued this to start in the middle of the interview, where he gives a short history lesson reminder:

 

[nitrene]

Marc Faber & Jim Rogers are the ultimate permabears. I remember listening to them post-Lehman along with Zerohedge, Calculated Risk, the Ticker, etc. All part of the hyperinflation is coming doomers. I remember reading the comments on Zerohedge, that's where I first heard of Bitcoin.

It's interesting that Jim Rogers became a permabear & his partner Soros kept trading.

 

[ironchef]

At the Rate nvda is moving its adding approximately $150 to $200 billion market capitalization a month. In the last week alone its added $80 billion in market cap. It's becoming a bloated pig. At the end of the year this will be an additional $1.5 to $2 trillion in market capitalization, making it the most valuable company in the world, sorry to say it, but no way no way no way, do earnings justify this kind of market capitalization

Don't be a sour grape, just buy some and see your money multiply.

We shareholders need greater fools to keep it up.

 

[S2007S]

Don't be a sour grape, just buy some and see your money multiply.

We shareholders need greater fools to keep it up.

Oh I'm buying alright. Contributions on the weekly to my retirement fund. I just opened up a new fund and I kid you not it's already up ytd over 10% ...you cannot make this nonsense up....up over 10% and it's only the first week of February. Of course my other funds are a blended mix of bonds and stocks not going anywhere the last few yrs, meaning falling way behind the returns of the spy and dia but sheesh this new fund I'm buying just keeps going up. Too bad I only have a handful of shares. But I will say there is just no way no how the trajectory of this fund as it gained nearly 40% last year will do the same and even more since it's already up 10% in January. Anyone who can make 10% in 5 weeks into the start of the new year should be extremely happy. If this was on my entire portfolio I would be selling it out completely but unfortunately it's only about 3% of my portfolio today.