The Dow Average of 30
favored companies finally rose up to 26,000 in 2019, up from 18,000 in
2016. It is close to its record high of
26,743 it reached in 2018.
But the more relevant
measure of stock worth is the S&P 500 index that is now at a record high of
2905, passing the 2853 value it reached in 2018, up from 1853 in 2016. Your
401k is up 1052 from 2016 and that’s up 57%.
The Dow Average is the
number that is the most publicized, It does not include the biggest companies.
It includes companies from different industries with varying levels of revenue.
It is supposed to be “representative” of the US economy.
The US economy
includes over 1000 companies with $1 billion or more in reenue. The Dow Average
is a sample of 3%.
There is a lot of hype
over the Dow and these companies are required to continually increase quarterly
earnings. Private companies have more flexibility and don’t have to ride the
rollercoaster.
There is a lot of hype
and speculation over the effect external events have on high profile companies’
stock prices.
The stock market
fluctuates so that stock market wonks can buy low and sell high. The majority
of 401k investors take the long view and let their bet ride.
There are a lot of US
companies who are overinvesting in projects with limited demand like
self-driving vehicles and all electric cars. Boeing is in trouble with their
software and sensor systems.
There are other
companies who are losing their consumer base because of high prices and low
value like TV cable. Others like Apple are experiencing weak demand for
smartphones due to saturation.
Too many US companies
are imposing their European Socialist Values and have demonstrated complete
stupidity in giving away their intellectual property to China.
We have witnessed the
failure of US Auto manufacturers to keep US consumers. In the 1970s most US
consumers bought GM, Ford and Chrysler cars.
Now in 2019, most US consumers buy foreign cars made by Japan, Germany
and South Korea. In the 1970s, most manufactured goods bought by US consumers
were US brands. Now in 2019, US
consumers are more likely to buy goods offered by foreign competitors or US
brands made overseas.
Norb Leahy, Dunwoody
GA Tea Party Leader
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