“The market is down today.”<\/p>\n
Have you ever really thought about what they’re saying? When they say “the market” they (you know, they, the people who fix the roads… ‘they’) are really just generalizing, and are really referring to the Dow Jones Industrial Average. This is a phrase referring to a number that represents a sum of the trading value of some particular companies selected to be representative of the market as a whole.<\/p>\n
But it’s not.\u00a0 Every once in a while a company is removed or added to the list of what is used in the index calculation. On that day, the value of “the market” changes, not because anything went up or down in value, but because somebody decided some company was more or less good at representing the market on that day.<\/p>\n
Then there’s the fact that the companies listed as part of the DJIA index are not weighted, so if a $1.00 company gains a dollar and a $100 company gains a dollar, it amounts to the same thing in the index.<\/p>\n
Take into account that it’s all perception (I hope we all know that by now) and not actual value of companies that make up their stock price that goes into the index calculation and it’s hard to imagine how anybody can take “The market is down today” at all seriously. But people do and it affects their mood and their likelihood to spend.<\/p>\n
Here’s another example: “Prices haven’t been this low since 1984.” That’s another brainless comment. If something costs $5.00 today,\u00a0 and it cost $5.00 in 1984 are you going to tell me it was the same price and has the same value? Having the same price is a meaningless comparison because it doesn’t take into account inflation. But what you hear is that the price now has dropped to the same numerical dollar value as it was in 1984. Well, in 1984 $5.00 was worth a lot more than it is now. So in fact if the price now drops to 1984 values you gotta think we’re much worse off than in 1984. But they’re not saying that. It’s part of the farce of finance.<\/p>\n
It’s all a big uncontrollable farce.<\/p>\n","protected":false},"excerpt":{"rendered":"
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