S&P 500
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DataIsBeautiful is for visualizations that effectively convey information. Aesthetics are an important part of information visualization, but pretty pictures are not the sole aim of this subreddit.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
DataIsBeautiful is for visualizations that effectively convey information. Aesthetics are an important part of information visualization, but pretty pictures are not the sole aim of this subreddit.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
S&P 500 Since 1950 - 7 crashes
Hi guys just wanted to put things in perspective for you all since some of you seem to be quite nervous with the recent week of stock movement.
I've summarised a list all stock market crashes since 1950. There has been 7 stock market crashes since 1950, averaging one every 10 years.
The stock market crashes ranges from inflation (10%+), to oil price rises (4x) due to war, dot com bubble, housing market collapse, covid-19 etc.
The graph is a log graph meaning that the space changes are proportional to the percentage change. This is useful for looking at long term charts since the % change for a dollar increase is smaller as the index value goes up.
The S&P 500 has averaged a compound annual growth rate of 8.22% since 1950. This is illustrated by the trend lines, and as you can see the S&P 500 is trading right in the middle of the range (the two blue trend lines).
I noted a few reasons in the box for each crash for a brief understanding of why it had happened. Note, that the only one with a 'fear of overvaluation' was only the dotcom crash where the PE's were over 200 and many companies were just cash burning shells with massive negative free cash flows.
I'm not saying a crash / correction won't happen, but i just wanted to put things into perspective and give a bigger picture of the overall stock market since pretty much before all of us were born.
By no means am i an economist but I didn't include anything earlier than 1950s because that was pre WW2/WW1 - before the US was a superpower / the global financial hub / USD = world trade currency etc.
Edit: some of you noted that its only 8.22% if you bought at the start but I want to clarify that yes and no! Yes for the people that literally buy in once once at the beginning of 1950.
No because if you buy throughout the years (DCA every month let's say) you'll buy within the range - both lower and higher range! So it's more or less 8%! For example during 1960s-1980s the sp500 traded sideways! So if you constantly bought in those 20 years, the accumulation of money in this period would have a higher CAGR of > 8% because of where it is in the range. Just follow the lines! It makes it easier. There's roughly same amount of periods above and below the middle trend line.
Edit: Changed enron scandal to lehman brothers as some pointed out my mistake.
Edit: Further Log Graph explanation (why log is preferred) If the scale has a large range (i.e. 100 to 3000) then log should be used because its important to show the % changes as opposed to the point changes. A 1 point increase in the SP500 now is only 1/3811 = 0.02% whereas a 1 point increase 10 years ago was 1/1000= 0.1%. It's important to look at it in terms of % change because companies grow in terms of % as well. For example you don't quote apple has grown its business by 30 billion this year ( random number), instead you say apple grew its sales by 20% this year. Its so that its comparable.
DataIsBeautiful is for visualizations that effectively convey information. Aesthetics are an important part of information visualization, but pretty pictures are not the sole aim of this subreddit.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Explain Like I'm Five is the best forum and archive on the internet for layperson-friendly explanations. Don't Panic!
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
DataIsBeautiful is for visualizations that effectively convey information. Aesthetics are an important part of information visualization, but pretty pictures are not the sole aim of this subreddit.
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The S&P 500, currently at 3800, has a P/E ratio of around 19 and a half, down from the 30+ it was last year. If we revert to the mean of 15 in terms of PE, we’re looking at a 25% drop from here which takes us to 2850. The scenario of complete reversion to the mean is tied to a 30 year treasury yield reverting to its long term average of 6.29%, which seems unlikely unless inflation expectations really get out of control in the next years. So let’s say this is the worst case scenario.
Then we have earnings contraction, latest estimates by Goldman are around 11% in the next 2 years. That would take us from 2850 to 2536.
Would you consider 2500 a good approximation for a worst case scenario, in which earnings come down and inflation is not tamed?
I am wondering when to enter this market in a major way, and 3200 seems like a good point to start averaging down. In my mind, if the worst case is to 2500, it is a 22% decline from 3200, very bearable psichologically. My investment time horizon is 20+ years, so not too worried about the incoming recession. Not trying to pick the bottom, just curious about how bad things can get.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
The place for news articles about current events in the United States and the rest of the world. Discuss it all here.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
Do Bull Traps in the past go up that much? Genuine question? I've been bearish, but this rally is starting to break my belief, at this rate we'll be at ATH by June lol.
Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome.
The old Wall Street adage is to "sell high." Tesla did just that.
A week ago, Tesla announced it would sell $5 billion worth of stock at market prices "from time to time." Tuesday it announced it had completed that sale as of Friday.
The exact number of shares sold, and thus the average price of each sale, was not disclosed. Tesla shares have fallen sharply in the recent sell-off of tech stocks. Shares reached a split-adjusted record high close of $498.32 on August 31, but have lost 16% of their value since then through Friday's close. And shares were down another 11% in pre-market trading even before the Tuesday's filing.
The sell-off could be because Tesla was not added to the S&P 500 index, as many investors were expecting would happen, given its market value and recent record of sustained profitability. Being added to the S&P would have forced additional purchases by fund managers whose holders must mirror the blue chip index.
Shares of Tesla are still up about 400% since the start of the year, even with last week's sell-off.
The sale of stock is the second such offering Tesla has done this year to take advantage of the skyrocketing stock price. In February the company raised $2.3 billion through the sale of 3 billion shares. Adjusted for the recent split, that stock sale was at an average price of $151.60 a share.
CEO Elon Musk dismissed the idea of the need for sales of additional shares when asked about it by analysts in January.
“We're actually spending money as quickly as we can spend it sensibly," Musk said on a January 29 call, when the company posted its first annual profit. "There is no artificial hold back on expenditures ... So in light of that, it doesn't make sense to raise money."
But soon thereafter Tesla decided it didn't make sense to not take advantage of its climbing share price. And if it turns out that its shares hit a peak last week that it might not reach again for a little while, then Tesla apparently sold additional shares at close to that high point.
https://www.google.com/amp/s/amp.cnn.com/cnn/2020/09/08/business/tesla-stock-sale/index.html
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The SPDR S&P 500 trust is an exchange-traded fund which trades on the NYSE Arca under the symbol. SPDR is an acronym for the Standard & Poor's Depositary Receipts, the former name of the ETF. It is designed to track the S&P 500 stock market index. This fund is the largest ETF in the world. NYSEARCA: SPY
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