the stock market

[mellowtigger]

I don't follow stocks. I think it's an absurd system that has no basis in reality.

If you're wondering about the high profile stories in recent days of several billionaires selling off chunks of their stocks, though, I think this video fairly explains why.

Watch on YouTube

Separately, I'm curious what's going on in particular with CBS stock. Take a look at this 5-year profile.



What in 2020 February preceded the big drop?
What in 2021 February preceded the meteoric rise? And equally impressive fall?
Sure, I know that the disastrous STD show (previously known as the lucrative "Star Trek" franchise) is part of its continuing decline, but what's the rest of the story?

Something is happening out there, and it won't be good for us peons.

Comments

[darkoshi]

> I think it's an absurd system that has no basis in reality.

I feel the same way, yet have to deal with it for some things.
That reminds me I need to check on my 401k account.

I found this about the CBS stock rise&fall:
https://www.latimes.com/entertainment-arts/business/story/2021-04-02/viacom-cbs-stock-collapse-streaming-paramount-plus

[zipperbear]

The other issue is that there's nowhere else to invest money. My retirement account is mostly in stocks, because bonds and cash/money market interest rates don't cover the inflation risk, and other investment types (like real estate/REITs, commodities, precious metals, and fads like pogs or beanie babies) are volatile and historically bad investments. The baby boomers haven't finished retiring (not that they all saved a lot), but IRA/401k accounts need to go somewhere. During a pandemic, not spending money on travel and nightlife because everything is closed, many people saved more in their rainy-day funds, driving up the prices of stocks. But it's harder to take money out of retirement accounts; people may panic if prices drop ("buying a loss" by switching to bonds, etc., in a crash, which is the worst time to sell), but prices are likely to rebound quickly.

[mellowtigger]

Very nice article, thanks! On my first point, Vice also notices the unusual number of CEOs selling stock and seems to agree that the next crash is coming soon and it'll be worse than 2008. :(
https://www.vice.com/en/article/7kbx9b/the-to-the-moon-crash-is-coming

[mellowtigger]

That's a great point about the "restless money" during the pandemic restrictions. I'm sure you're exactly right about "the worst time to sell", which seems to be playing a small part (versus just year-end tax benefits) in this current record-setting sale happening now instead of later. :/

[zipperbear]

The stock market is an absurd system, but it's better than any alternative system we know of. Everyone wants a piece of the action when it can make a profit. The value of various different companies is hard to determine, especially with the news cycle. If Peloton had just waited a week, their ads could have touted their ability to kill off rapey guys who've been me-too'd.

In a socialist economy, the investments and priorities are determined by cronyism and propaganda. I don't see any way around that problem, other than making things public and letting the crowd decide. The stock market is voting weighted by money at risk, so rich people are motivated to guess correctly, and we hope wealth is correlated with wisdom. Here, at least, insider trading is a crime, even if it's selectively enforced.