I am a Wall Street guy, and, being a Wall Street guy, sometimes I forget that 99.9% of the planet has no clue what the stock market is doing on any given day. Or cares. It has zero bearing on their lives whatsoever.
That’s one of the great things about working in the Myrtle Beach area. Outside of a few financial advisors, there are no finance people here. And I’d argue that the financial advisors aren’t too plugged into what the market is doing, either.
Here are the times when people care about the stock market:
- When it’s crashing. But the stock market has to crash a lot for people to care. Stocks were down 20% last year, and it didn’t even show up on a lot of people’s radar. Also, people have been trained to ride out the downturns, and 20% doesn’t register as a downturn for most people. 50% is a different story.
- When it’s ripping. People cared a lot about stocks in 1999. And in 2021. Every once in a while, the market gets hot, and people think they can get rich trading stocks. I can tell you that if you see everyone around you quitting their jobs and becoming day traders, that is a pretty good time to short stocks. People become day traders when it’s easy, and it doesn’t stay easy very long.
- Meme stock mania. GameStop and AMC sucked a lot of people into the markets and destroyed a lot of wealth. You can put crypto in this category, too, but also any stock that captures the imagination of the investing public. Krispy Kreme Doughnuts did this at one point. Nvidia is doing it today. A stock goes up 5,000%, people notice, and then they buy it… after it’s gone up 5,000%.