Like many others, I got into the stock market after COVID-19 emerged, and I got some savings to play with at the time.
Not long after, my friends started investing as well, as well as hearing everybody on the street talk about stocks in daily conversations.
My guess
- People have nothing to do staying at home during Covid, which is obvious.
- The US is the real international market that is tied to all countries, Tencent has their stock listed in the HK stock market, also listed on the US stock market. Why invest in the local market if you can access the biggest market?
- Famous companies come from the US, namely Apple, Microsoft, Logitech, JP Morgan, literally. As Peter Lynch and Warren Buffet suggest, “Buy the things you know.”, most people know these companies.
- Technology advances provide the ease of investing with your smartphone.
- Snowball effect of stocks becoming a daily topic between colleagues and friends.
- Companies information is accessible to everyone with the internet. It’s not like in Warren Buffet’s old times when you needed to make a physical effort to know how a company was doing, you could just check on Yahoo Finance or any other websites.
- Many people now acknowledge where money is coming from and what to do with inflation, thanks to YouTube educational videos. So EVERYONE is trying to fight inflation with the most easily accessed stock market.
Everyone is adapting the Warren Buffet method
One thing I’m not sure of is how the Value Investing philosophy would play out.
With Warren Buffet being a role model for many people, he suggests calculating the intrinsic value of a company, or just DCA ( Dollar-cost-averaging) in the index, believing in the US market, is the best way to invest.
If the majority of investors follow his suggestions, in which case the US stock market might look just like a reflection of his own philosophy, so he gained wealth in definite, you know what I’m saying? People will buy the dip in the S&P500, and so every time after the crash, it would go up, historically so.
Will the P/E generally become higher and higher because more people means more money investing in the market? I think so. If the US dollar value is lower, so will everything become pricier, even stock.
What Now?
All-in-all I’m not against everybody getting rich, and the crypto market sure plays an interesting role alongside with financial system established in the past. I do look forward to a money-less world, where everybody just does things they want and contributes to others yet not in favour of returns. But before anything happens, I see a crash coming soon, that’s how the economy works, in cycle, humans psychologically so, as well.
