3 ms·
The stock market is not the economy, Wall Street is not Main Street. You need to look at this more macroscopically if you want to understand this. Basically: C
by Dalewyn 2y ago
The stock market is not the economy, Wall Street is not Main Street. You need to look at this more macroscopically if you want to understand this.
Basically: China tech sector just made a big splash, traders who witnessed this think other traders will sell because maybe US tech sector wasn't as hot, so they sell as other traders also think that and sell.
The fall will come to rest once stocks have fallen enough that traders stop thinking other traders will sell.
Investors holding for the long haul will see this fall as stocks going on sale and proceed to buy because they think other investors will buy.
Meanwhile in the real world, on Main Street, nothing has really changed.
Bogleheads meanwhile are just starting the day with their coffee, no damns given to the machinations of the stock market because it's Monday and there's work to be done.
- jart 2y agoNot really. The Magnificent Seven are the only thing propping up the whole US economy. If they go down, you go down.
- SebFender 2y agoWell said.
- nullocator 2y agoIsn't this a good reason to break these companies up and mitigate the risk?
- rsanek 2y agos&p500 was still up by normal amounts during 2023 and 2024 if you exclude big tech. definitely they are an outsize portion of the index but that doesn't mean the rest of the economy isn't growing. https://www.inc.com/phil-rosen/stock-market-outlook-sp500-investors-economic-fed-rate-cut-magnificent-seven/91103119 https://www.inc.com/phil-rosen/stock-market-outlook-sp500-in...
- qwytw 2y agoIs it really related to China's tech sector as such, though? If this is true then Openai, Google or even many magnitudes smaller companies etc. can just easily replicate similar methods in their processes and provide models which are just as good or better. However they'll need way less Nvidia GPUs and other HW to do that than when training their current models.