Who has Knowledge to read this SP 500 index chart ?

T

TradeTune

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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TradeTune said:
I'm trying to figure out why would any inexperienced trader or investor buy a stock then ?
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Because he is inexperienced.

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

Start by not looking at nominal values and plot that chart logarithmically instead of linearly.
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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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TradeTune said:
Can you explain about index gain ?
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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.
 
BKR88 said:
Provide some data on this please.
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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
 
TradeTune said:
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
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"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
 
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