What Is the Stock Market Even for Anymore?
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https://www.nytimes.com/interactive/2020/05/26/magazine/stock-market-coronavirus-pandemic.html
What Is the Stock Market Even for Anymore?
“With the economy in free fall, the resilience of share prices defies the misfortunes of most Americans.”The author Michael Steinberger looks at why the stock market has risen so much in the midst of a pandemic driven economic malaise.
A piece of statistics in there caught my eyes:
“In 1997, there were roughly 7,500 publicly traded companies in the United States. That number has since fallen by half, to around 3,600 — a startling trend when you consider that the economy has more than doubled in size over the same period.” -
@Axtremus said in What Is the Stock Market Even for Anymore?:
A piece of statistics in there caught my eyes:
“In 1997, there were roughly 7,500 publicly traded companies in the United States. That number has since fallen by half, to around 3,600 — a startling trend when you consider that the economy has more than doubled in size over the same period.”WOw. That is amazing. I did not realize that.
I am think that worldwide however, the number has increased?
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I actually didn't expect the virus to drastically disrupt the long term profit trajectories of many publicly traded companies, so even though I'm surprised the recovery of the market has been this strong, I am only surprised because I figured the irrational fear of the stock market would last longer than it has.
To answer the question in the thread title, the stock market is to provide a system whereby a company can borrow money and pay back those loans, where the lender is individual investors and all their investment dollars in aggregate. If you agree that it's good for a company to be able to borrow money from average joes in order to invest in growth and allow those average joes to participate in the future profits, then the stock market is just the logical consequence of such a system.
