Hapter 18 Securities: What drives stock market cycles?
For our last assignment we want you to try to integrate some important aspects of your learning and take that learning out into a larger context of understanding. So we are going to ask you to do the impossible tell us what makes the stock market go up. A smart-alecky answer to that would be: More buyers than sellers,but you know we are not going to be satisfied with that.
Think about it for a moment. The stock market is nothing more than a market of stocks, so a reflection on what makes an individual companys stock price go up is one of the keys to your answer. But there are other keys, like where the money comes from to buy stocks and what else people can do with their money, and what the risks are of these alternatives. No more hints. Obviously this is a very large question. Precise metrics for answering the riddle of Bull or bearstock-market cycles arent possible; however, broad causal influences can certainly be identified. Who knows, this investigation may teach you how to strike it rich on Wall Street. What better way to wrap up your Pre-Requisite before tackling the MBA.
On a fundamental, general level of consideration, provide a comprehensive answer to the question: What drives stock market cycles?Then, offer some reflections about the current level and recent trends in the stock market, aiming to connect the current performance to the larger general causes