collected by :Molly Tony
For a far larger assortment of smaller companies, though, profit is often out of reach. In 2015, for example, the top 200 companies by earnings accounted for all of the profits in the stock market, according to calculations by Kathleen Kahle, a professor of finance at the University of Arizona, and Professor Stulz. That's one of the main arguments for buying stock in the first place. Aside from the top 200 companies, the rest of the market, as a whole, is burning, not earning, money. ■ A quirk of accounting is at the root of some of that profit deficit, especially for smaller and younger companies.
For a far larger assortment of smaller companies, though, profit is often out of reach. In 2015, for example, the top 200 companies by earnings accounted for all of the profits in the stock market, according to calculations by Kathleen Kahle, a professor of finance at the University of Arizona, and Professor Stulz. That's one of the main arguments for buying stock in the first place. Aside from the top 200 companies, the rest of the market, as a whole, is burning, not earning, money. ■ A quirk of accounting is at the root of some of that profit deficit, especially for smaller and younger companies.
Stock Market Manias Of The Past Vs. The Echo Bubble
It should also be mentioned that past stock market peaks as a rule coincided with record highs in buybacks. Diverging Indexes and Major Stock Market TopsIn view of the growing intra-market divergences mentioned above, we decided to create a few comparison charts which show three major market indexes on occasion of major stock market peaks of the past three decades, plus one additional indicator, namely the spread between 2- and 10-year US Treasury yields as a proxy for the yield curve. The 2007 market peak was a bit trickier, as there was actually no outright divergence between the three indexes. The last time a major market peak in Japan was preceded by an inverted yield curve was in 1989. It certainly does not look as if anyone is worried about the possibility of a stock market downturn.
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