Explained | The Stock Market | FULL EPISODE | Netflix

I always wondered, Why should we listen every night to the state of the stock exchange? 70 stocks closed at record high so far … A massive rise in stocks … She set records in the initial public shows Investors who rode the wave … When the stock market thrives, They make us believe that the economy is booming. "Record pace" In America, the stock market was booming in general for nearly 40 years. If the stock market collapses, the wealth will be lost with it And the prosperity of the American economy. The stock exchange indicates that we are on the path to prosperity. A very high stock market will be in everyone's interest. The value of the stock market rose nearly 3 trillion dollars Since the elections. But if we add all the goods and services that are bought and sold in the United States, The actual economy, It does not grow at the usual speed. As the wage rate has barely moved for decades And the net income of the American family Not yet recovering from the Great Recession. What exactly does the stock market measure? "NETFLIX original documentaries" The stock market is the measure of America's prosperity. Look at the Dow, it's up by … The NASDAQ index finally scored 5,000 points. Investors yearn … Quotas! A new kind of scramble for gold We are all watching this global economic expansion … We have now entered a historical stage … Stock repurchase … In essence, it is a poor philosophy. "stock market" To understand what the stock exchange measures, It is useful to imagine a very simple organization Like a lemonade stall. "Jill" was very successful. But I am thinking about a bigger project. I tried to get a loan, but the bank said it was too risky. Wealthy investors did not buy. "Generation" had another option. It can establish a public company And it gives all those who wish to invest in her company. There is a so-called initial public offer. Investors pay a certain amount, for example, a dollar for owning a small section Or a share in the company "Gil". Geel sells a range of shares. And my lemonade empire is flourishing! Right, Jill can use the money to open new kiosks, Which means more profits. Geel can invest part of this profit in developing new commodities. It can also return some of this money to investors. These are called quotas. She doesn't have to do that But this increases people's enthusiasm for her company Increases the likelihood that they will buy their shares, Like "Sam", who was sick on the day of the initial public show, but he sees that … Jill is the smartest girl in the whole world, I know the issue of the lemonade stall You will be very successful. He offered to buy some shares from one of those who originally invested Double the price you paid for it. – He's thinking … – If "Gill" continues at the same pace, I can sell these shares for a larger amount later. This is the stock exchange, people buy and sell Small portions of companies, According to what they will reach the value of shares in the future in their opinion. Except that in reality, This happens thousands of times per second worldwide. There are exchanges everywhere But the New York Stock Exchange is the big square. It has been around since 1792 When 24 stockbrokers wore their most beautiful suits and hats They gathered under a tree on Wall Street in New York. Today, the place is where the shares of major traditional companies are traded Such as "IBM" and "GE". The Nasdaq is more like a younger and cooler brother. The "NASDAQ" index was born in 1971 and has no specific location. All trades are done online. There, we find technology companies such as Apple and Facebook. So in America, if you want to know the stock market situation, You should know the status of these two exchanges. This is where indicators come in. The indices take a large group of stock prices and convert them into a clean number. The S&P 500 index tracks 500 major companies on the two exchanges The Dow is more exclusive And it tracks only 30 companies that it considers the most important. In 2015 he abandoned AT&T And replace it with "Apple". Dow and S&P are two major US indicators But other countries have their own indicators To measure its stock market. German stock index, "DAX" … London Stock Exchange Index, FTSE 100 … The Nikkei … The Shanghai Index … Today, the shares of many of the world's largest companies are traded on public markets, But this was not always the case. There was one man, often one man, who made all the decisions. Major corporations of the twentieth century, most of them at the time, It had only one contributor like Andrew Carnegie. (Andrew Carnegie) Steel And "Vanderbilt", (Cornelius Vanderbilt) Railway And "Rockefeller". John Rockefeller, oil. They have strictly controlled their companies. These things began to change at the beginning of the 20th century. And we're starting to see companies like General Motors appear. General Electric and RCA. Companies discovered what "generation" discovered, That is, if you allow the public to buy shares, It can grow more quickly. Shareholders want to earn money. So, if the CEO made a bad decision, They will start selling their shares, which will cause prices to fall. And the opposite is also true, the likelihood of future profit Encourages people to take risks and invest in new ideas. This is the idea of ​​the stock market as a positive engine. It pushes companies to make sound decisions, To have more money to pay shareholders, And more money to grow and create jobs and this is beneficial for everyone. By the middle of the 20th century, The American Public Foundation It has established itself as one of the most powerful and effective organizations And benefit the world. There is a sense of growing prosperity The phone company is a grateful participant. In the decades following the Second World War, The stock exchange contributed to the peak of the common American boom. The new phase has begun, to make the system more democratic And we grow the capital flow to finance the business. The institution was supposed to be a means To secure investment opportunities, not just for the wealthy, But for ordinary Americans, too. It brings high returns to investors. Don't you think we should invest, dear? Millions of safe and well-paid jobs It yielded innovative goods sold all over the world. Managers and CEOs considered themselves loyal or trustworthy The major public institutions that were supposed to serve Not just the shareholders, But also bond holders And suppliers, employees and society as a whole. Buick has provided goods that suit everyone, both men and women. Buick's general manager, Ivan Wiles, intervened. Dupont … Contemporary chemistry and contemporary industry unite To serve contemporary "America." These public institutions contributed to building the American middle class And for those who knew how to deal with it, Stock trading may bring them fortunes. Like this man. I work on the railway … Popular music is his only hobby, but he's an investor billionaire … Warren Buffett … Wall Street's largest giant. The most famous investor in "America". Warren Buffett's investor is worth $ 84 billion. Buffett is famous for a specific investment style. Investing in value, accurate company analysis, Review the budget statement, Auditing of the company's business. But if you don't have time to do that, here's advice from the man himself. Buy the low price S&P 500 Index Fund. The fund linked to an index puts a little of your money In all index companies. Thus, you are linked to the stock market as a whole to benefit from it. The second option is to give your money to professional investors Who will try to beat the stock exchange for a fee. Buffett once bet a million dollar hedge fund that over a period of 10 years, The index fund will make more money, And win the bet. Stock selection difficult game But there is a common strategy. This man is "John Maynard Keynes." You may remember his legendary mustache. He created it. Keynes won the Nobel Prize He was one of the most influential economists of the 20th century. And note that newspapers do a certain thing. The newspaper was devoted to a whole page For beautiful object pictures You were supposed to choose the 6 most beautiful faces And put it in order And send your answer to the newspaper. The newspaper classified the faces according to the number of votes they received The winner is the one whose match matches the choice of the largest number of people. Let's think about this competition. Do I choose what seems to me the most beautiful faces? No, I have to choose what others find the most beautiful faces. This is what happens on the stock exchange. It is not the actual value of companies that drives their stock prices. It is the most popular story that people believe about these companies. Sometimes the stories are supported by facts. Chipotle fell more than a third of its value. This happened after several injuries Including Escherichia coli, Salmonella and Norovirus associated with the series. An emissions scandal rocked Volkswagen, causing its share price to drop dramatically. But sometimes these stories are not true. Internet companies have been the most popular and profitable investments in time. The shares were raised in a fantastic way. Lycos, Xcite, and Yahoo … Internet stocks continue to climb. The story was prevalent in the nineties Is that the Internet companies will dominate the market. And that these companies should not try to take profits. This is a good story and is partly correct. There are companies like Amazon and Google. But the problem is that no one has succeeded in assessing the story And determine the extent of the stock market rise. Is it an infinite height? Has the economy changed forever? You know there is something wrong when everyone talks about something like this. It is like a bubble. It is a cumulative effect. It keeps growing, but it can't go on forever. The honeymoon of Internet companies is coming to an end in many parts of the world. Many Internet companies face death. 300,000 technical jobs have disappeared. It was described as breathtaking. Points retreated in an unprecedented way in the American market. It left traders and investors in a state of shock. When the stock market bubble burst, Not only did it hurt investors, it caused chaos throughout the economy. Millions of people may lose their jobs, companies may collapse, People almost lost their end of service benefits. But even when the stock market is booming and investors make money, This could also hurt the economy. We are heading towards the worst energy shortage crisis Since the Second World War. Drivers began standing in line before dawn, hoping to refuel To spend their day. Are you upset with the price hikes? I am very disappointed and disgusted by the whole situation. There was a general feeling of concern that something went wrong In the American economy. In the end, the major public institutions were blamed And how it works and management. Here is Milton Friedman, the main driver of blame. He is a well-known economist invited to participate in popular talk shows To help people understand his philosophy. Have you ever doubted capitalism? And if it is good to work out of a sense of greed? Do you know which society is not motivated by greed? Remember the wheel? Friedman was not a fan of her. In his view, it should include one thing, the shareholders. In 1970, he published a study that achieved great success. The famous article published in the "New York Times" It said that because the ownership of the institutions belongs to the shareholders, The only duty of the company was to make profits. "Gordon Gecko" in "Wall Street" Embodies Friedman's philosophy. You own the company. It's true, you are the shareholders, All of you have been deceived by these bureaucrats. Greed, if you will, It is a good thing. And the institutions followed his advice. They started tying the salary of the senior executives By performing the stock price on the stock exchange. If it is 80 percent of the CEO’s salary Based on the stock price performance in the following year, The manager will inevitably make sure that the share price increases. Even if the results hurt the staff And customers, society and the environment And even the institution itself in the long term. The executives invested more money To raise the share price in the short term, Like reducing expenses Or repurchase a group of their company shares To reduce market shares and artificially raise prices. Between 2007 and 2016, This is how companies did the S&P 500 index. Spending more than half of its revenue. Another 39 percent was spent and paid to its shareholders in equity That they don’t have enough money to increase wages, expand, or develop new products, These are good things for the economy in the long run. If you have a long-term vision, That 100 years from now, you still want the company to be there, Maybe the company is making something different, But you will still want to work in the field. So the choices you make On investments, people and capital are different If you want to invest and generate profits within 24 months. In 2012, the Wassau Paper Company was making investments To transform its factories from making print and writing papers To making tissue paper. But he bought a hedge fund set of shares And he pushed the company to reduce its expenses instead. Their argument was that there was no need to do so. And they prefer to increase the shares. We as management, we objected. We made concessions and offered to cut our salaries To keep the door of solutions open. The Wassau Paper Company says it intends to close the Procau plant by March 31 … Leaving about 450 people without work. This news is tragic, not only for workers who will lose their jobs Rather, it is to the Brockaw community where the paper company was beginning. On December 7th, I will never forget this day, It was not the history of Pearl Harbor, I was burying my father that day, And I lost my job on the same day. Then the next day, I went to work The chaos was overwhelming. People cry … They ask why. It was shocking. My main concern is that we have evolved to achieve this short-term vision Regarding shareholders ’equity, Against a long-term view of shareholders ’responsibilities. This trend prevailed for a while And it got stronger and more important. It has really threatened the capacity of our institutions To pursue projects that lead to long-term institutional sustainability And to economic growth. Dismiss workers, close factories, and keep salaries low. These things are bad for the economy in general But it may be great for a company’s short term gains This is what matters to the stock exchange. The stock exchange witnessed an amazing start … A new record today … Historic day on Wall Street … The US economy is advancing, along with speculators on Wall Street. This was an important day on Wall Street … The S&P 500 has risen to new historical highs. As the stock market grew, the salaries of general executives increased with him. In 1973, The average CEO’s salary was 22 times that of the average worker. In 2016, he was 271 times more than him. With the stock market booming, Fewer Americans benefit from it. The share of Americans who invested in the stock market declined To its lowest level in 20 years, With the withdrawal of the middle class. Not surprisingly, with the stock price in the United States With it increased inequality. But there is no need for things to be this way. The exchange gives people the opportunity to decide which companies deserve to be successful And any ideas worth betting on. There is an appeal in giving people games to play. We look at successful countries and they all have stock markets And the countries that tried to stop it She changes her mind and re-establishes it now. Shareholders can influence the performance of companies And the interests that you take into account. Most of us think about the distant future. We care about our neighbors, children and grandchildren. We have values ​​and morals And we want our companies to earn money By doing things that are beneficial to the world Not by harming people and destroying the world. This is what most shareholders really want. Translating "moriel daw"