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S&P500 Normalized with M2

36 点作者 cconroy将近 2 年前

10 条评论

arcticbull将近 2 年前
Why on earth would you divide the market cap of the 500 largest companies in the US by the money supply? It&#x27;s a completely arbitrary and silly thing to do. Why not divide the number of cheese wheels by the diameter of the moon?<p>This chart isn&#x27;t mind-blowing, it&#x27;s straight-up meaningless.<p>[edit] Also note the S&amp;P 500 isn&#x27;t even a consistent numerator, it&#x27;s an index whose constituent companies are replaced over time at the whim of a committee, lol. Remember when Tesla got added in 2020, and the Apartment Investment and Management Co. got removed? - and as a peer comment pointed out, this doesn&#x27;t even include dividends and distributions.
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bryanlarsen将近 2 年前
This is good news. It means the Fed is doing its job. M2 is a measure of the amount of money in the economy, not a measure of inflation.<p>If the economy grows, the amount of money needed to lubricate the economy also grows. If the money supply doesn&#x27;t grow while the economy does then we&#x27;d see significant deflation.<p>So we want these two measures to be relatively balanced, and they are. Yay!
VHRanger将近 2 年前
It might surprise no one here that people who are professionals in the finance industry are capable of adjusting for inflation:<p><a href="https:&#x2F;&#x2F;www.multpl.com&#x2F;inflation-adjusted-s-p-500" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.multpl.com&#x2F;inflation-adjusted-s-p-500</a><p>You can also note that M2 is correlated basically with inflation in the long run (Rsquared ~0.92)<p>The error on the part of the twitter user is that he&#x27;s using nominal values instead of % growth (log-log) values. Something you learn in 101 econometrics.<p>This is why you don&#x27;t listen to crypto bros on matters of monetary economics.
etskinner将近 2 年前
It would be more helpful to compare S&amp;P 500 vs CPI rather than M2. It&#x27;s purchasing power that matters to most investors, not the comparison to how much money exists.<p>S&amp;P 500 gained ~40% since January 2020, and CPI gained ~18%.<p>Even better would be comparing to the total stock market rather than S&amp;P 500. Using something like DWCF or VTSAX
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jy1将近 2 年前
It&#x27;s up substantially when calculating total return (including dividends) <a href="https:&#x2F;&#x2F;twitter.com&#x2F;Tsartoshi&#x2F;status&#x2F;1680139560074764288?s=20" rel="nofollow noreferrer">https:&#x2F;&#x2F;twitter.com&#x2F;Tsartoshi&#x2F;status&#x2F;1680139560074764288?s=2...</a>
swyx将近 2 年前
careful with crypto guys and inflation truthers - they cant articulate the velocity theory of money, but are very confident that they know better than the fed (usually spelled FED as a shibboleth) on what money is
fxtentacle将近 2 年前
&quot;All the technological advantages humans made&quot;<p>I didn&#x27;t notice them. Is there anyone who believes Google or Microsoft are now significantly more useful than in 2003? Does anyone feel like Facebook has gotten more useful in recent years? Apart from compensating for ever slower Electron apps, does the additional CPU power in modern Macs really improve my life? How come VS Code still feels so much slower than Visual Studio 6 on Windows 98 SE?<p>Maybe it&#x27;s time to accept the obvious conclusion that new != better when it comes to technology.
xnx将近 2 年前
Talking about M2 without context or regard for other factors is such a reliable indicator that I don&#x27;t need to read any further.
mouzogu将近 2 年前
the cost of everything has gone up bigly while my salary has remained stagnant<p>dont need any financial astrology or jargon to know this
xattt将近 2 年前
I’m trying to click the X to close the window but won’t do anything.
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