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Saturday, November 26, 2022

Stock Market Crash Prediction – It’s “Drowning Graphic” Turns On

This is the “Graphic of Destruction”

What Does The Future Hold?  Here The New York Stock Market Is Always Betting On What Might Come.
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In Internet forums, the “graphic of the downfall” is currently booming. Investors in the Wallstreetbets investor forum are as excited about it as they are on Twitter, with even well-known stock market entertainer Jim Cramer the subject of his show on the CNBC Stock Exchange channel. “They look really similar,” said the moderator.

In fact, the two curves are surprisingly similar: the price of the major US index, the S&P 500, rose at a breathtaking pace in 2021 before beginning its first correction shortly after the turn of the year. Prices have been correcting sharply since mid-July, only now standing on a shaky foundation. If stock exchanges continue to behave in the debacle of the 2008 financial crisis, prices could drop by as much as 50 percent.

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a psychological effect

The price curve also employs finance professors such as Hartmut Walz from the German University in Ludwigshafen. They took a detailed look at the curve’s data and came to the following conclusion: “With a graph like this, you can prove anything as well as the opposite,” he says. Because the much hyped price chart is questionable in many ways.

Psychologically, the graphic tricks its audience in several ways: since the current year’s graph ends in the middle, the brain subconsciously automatically continues it like the current line from 2008. “We automatically add incomplete representations,” says financial psychologist Monica Muller, who advises fund managers, among other things.

Researchers have found that stock market prices have a very similar effect. If the prices of today and then are shown only as numerical values ​​in a table, the human brain would not assume a trend. On the other hand, if the charts show a line, investors extrapolate it.

see red and fear the bad

Admittedly, the end point of the doomsday graphic is also delicate. The chart’s creators cut the S&P 500’s price chart far below the old high of the same chart in early 2010. The surprising thing is that the S&P 500 was at around 1170 points at the end of the chart in March 2010, it is currently at 3986 points and has literally risen.

Even otherwise conservative consumer advocates would agree with the finance professor. Anyone who has followed a world stock market index like MSCI World in the past and invested consistently for at least 13.5 years, would have never posted a minus in the stock market in the past half century, despite the power crash in 1987. The dot-com crisis at the turn of the millennium or the corona unrest in the year 2020.

Incidentally, investors can also convince themselves of another course that compares the current stock market situation with 1961. There is an astonishing synergy of courses here too. Quite different than the predicted doom graphic, prices moved upward from August 1962.

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