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Stock market rally "BAD" for common Joe?

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posted on Jan, 26 2011 @ 02:14 PM
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I have no formal education in the financial arena, and am forming this as a question because I would like opinions from people who probably know more than I do. Those of you who flat out disagree with my perception, are the ones who "make" the market. Heres my observation... The share or unit price doesnt generally increase without "profit margins" increasing. Profit margins are the margin left after all debts and expenditures are factored in. Profit margins increase when company gets more money per "widget". If they get more money per widget, then we as consumers are getting less widget per dollar. Now on the other hand if people are suffering from the fallout of a bad economy, they start to spend less and save more. The companies are aware that because more money is being "saved", there is less money available overall, and are more willing to accept less money for their "widgets" in an effort to get more money out of what little is left. Then, in recessionary times they may get themselves in what we know as "price-wars". Which I think serves the common Joe better than the reprocussions of a stock market rally. g.a.g. (sds)




posted on Jan, 26 2011 @ 02:37 PM
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I think IMHO the first question we must first answer is "is the stock market really in a rally"? If the value of the dollar has fallen since the beginning of the recession what is the current volume if we compare apples to apples. Today v/s 2007. Same would go for price wars and inflation. Maybe we could compare to get a clearer picture.



posted on Jan, 26 2011 @ 02:44 PM
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reply to post by Wetpaint72
 


I happen to have noticed that when the dollar drops in value, our goods on the worlds markets are cheaper. Therefor exports generally increase during this environment, thus increasing sales and profits. In other words,that may be another mis-conception because the value of the dollar dropping gives the perception ( by virtue of increased exports), that the economy is doing better than it really is. Dollar up = bad?



posted on Jan, 26 2011 @ 03:11 PM
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reply to post by G.A.G.
 


I totally agree there. But if we simply look as fuel and food the inflation is evident on the domestic side of the equation. I lose track now day as to how much the fed has flooded the market with paper, but I do think this is the bigger problem. I'm sure I could find out pretty easily in terms of numbers alone. But the problem is the numbers are so big I can't even begin to fathom the after effect! Maybe I am just too stupid. But to be honest who really knows. And by the way how much gold do we really have in fort Knox anyway...



posted on Jan, 26 2011 @ 03:17 PM
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reply to post by Wetpaint72
 
And by the way how much gold do we really have in fort Knox anyway...


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No telling my friend. Even if there are golden colored bars inside those vaults... may simply be tungsten wrapped in a thin layer of real gold. Been done before.



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