Tuesday, July 31, 2018

Tech stocks falls show how ridiculous stock market can be

Now, I'm not a financial guy, not a serious investor or a stock market mover and shaker. But I do despair sometimes at what I read about the stock market world.
Some members of the FAANG group of big tech companies (Facebook, Amazon, Apple, Netflix and Google)  - which has been largely responsible for propping the stock market up in recent years, and smoothing over the worst of the roiling - are taking some big hits over the last week or two, with billions being wiped off their valuations almost overnight. However, this is not because they are doing badly, not because they losing handfuls of money, but merely because they are not doing quite as well as some people think they should, because they are not meeting their own wildly ambitious earning targets, and basically not growing fast enough.
This seems a bit ridiculous to me, a self-professed non-financial guy. Essentially, they are being punished for doing well ... but not well enough. I know that in the longer run, they will make up their share price (and more). But I just wonder whether the actual stock market movers and shakers ever sit back from time to time and look at just how ridiculous their own ground rules are, and at what an illogical and vaguely absurd model of commerce they are holding up.

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