Uploaded May 2020 | Updated September 2026, 26 minutes ago
The stock price recovery we have witnessed after the post-pandemic panic and the emergence of what can only be called a quarantine-generated economic crisis seems... well, too good to be true.
Is it?
In other words, can share prices literally soar while millions upon millions of job losses are added to the tally in the US alone?
As strange as it may seem, the answer is a resounding yes.
As explained in this video, stock prices don't really tell us as much about the proverbial real economy or Main Street as most observers believe. To put it differently, it would be a potentially costly mistake to invest and/or trade based on the assumption that soaring share prices indicate that Main Street is in excellent shape... that's hardly the case.
Instead, as far as stock prices are concerned, we need to understand that we're simply in the realm of market forces, of market participants who seemingly don't mind swinging between extremes, from being overly optimistic about the economy when that is not exactly unwarranted to panic selling.
In a nutshell, let's just say that achieving the now-infamous V-shaped recovery when it comes to stock prices tends to be far easier than doing it with the real economy :)
The stock price recovery we have witnessed after the post-pandemic panic and the emergence of what can only be called a quarantine-generated economic crisis seems... well, too good to be true.
Is it?
In other words, can share prices literally soar while millions upon millions of job losses are added to the tally in the US alone?
As strange as it may seem, the answer is a resounding yes.
As explained in this video, stock prices don't really tell us as much about the proverbial real economy or Main Street as most observers believe. To put it differently, it would be a potentially costly mistake to invest and/or trade based on the assumption that soaring share prices indicate that Main Street is in excellent shape... that's hardly the case.
Instead, as far as stock prices are concerned, we need to understand that we're simply in the realm of market forces, of market participants who seemingly don't mind swinging between extremes, from being overly optimistic about the economy when that is not exactly unwarranted to panic selling.
In a nutshell, let's just say that achieving the now-infamous V-shaped recovery when it comes to stock prices tends to be far easier than doing it with the real economy :)
