Facts over markets
Awesome Stock Market Facts
The stock market is a wonderful place to invest your money. It is also a fascinating place with a long history. Let’s look at a couple of facts about it.
1. The Stock Market is more than 400 years old!
Many times, it is thought that stock market is something of modern days. But this started long time ago, more than 100 years ago. The idea of stock market came in Netherlands in 1602, when Dutch East India Co. Company began to issue paper shares.
2. There are more than 60 stock exchanges in the world!
The New York Stock Exchange (NYSE) or NASDAQ are the two most famous and biggest stock exchanges. These are over 60 stock exchanges in the world. The second biggest trio is Asian one. It is made of Japan Exchange Group (JPX), the Shanghai Stock Exchange (SSE) and the Hong Kong Stock Exchange. The smallest stock exchange in the world is the Seychelles Stock Exchange. It only has four different stocks and a total market capitalization of about 100 million U.S. dollars.
3. The stock market is 70% likely to go up on any year
According to the previews experience, the stock market has more chances to go up then down. The Dow Jones Industrial was up 70 % of the years. And in the last 40 years, the Standard & Poor’s 500 (S&P500) was up 77% of the years. This is a very significant difference. This is coming from historical data; it has been going on for 100 years. So, it has all the chances to continue.
4. October is the most volatile month
There is a myth for stock market in October, also called as October Effect. First let's mention two big crashes which happened in October, the Great Crash of 1929 and the Crash of 1987 were both in October. To be fair with our analysis, we need to say that this happened a long time ago and the effect is not significant. It is noticed that more bear markets were ending in October than starting here. So, fewer and fewer people believe in the October Effect. However, it is seen that October is the most volatile month in the stock market. Market movement are bigger during October compared to any other month of the year. Finally, it is widely accepted that October is the most volatile month.
5. September is the worst month
We saw October being the best month, meanwhile let’s say the other part of the truth, September is the worst one. There is no specific reason yet why this happens, but it is believed that some people cash their returns at the end of the summer, causing some downturn. Another hypothesis is that some traders are taking their vacations in August, when they are back, they are closing come positions in order to take their money cash. This force selling pressure and decline. Should you sell your invested capital in September? No, it is a historical experience. It could change.
6. The United States makes 40% of the world stock market
As mentioned earlier, the world stock market is big, with 60 stock exchanges. The United States one is the biggest by far. In 2018 the U.S markets represented 40 % of the world stocks market. It is too much compared to the second country, Japan which makes 7.59% of the total market. It is intriguing how one country makes the most of the total market. The five biggest countries stock market are (as of August 2018):
1. The United States, 40.01%
2. Japan, 7.59%
3. China, 7.51%
4. Hong Kong, 6.51% 5. The United Kingdom, 4.49%
7. The Bear and Bull analogy comes from California
Bull markets and bear markets are two notions very popular in stocks markets. A bear market is a market which is going down, and a bull market is going up. They are called this way because a bear is attacking from the top in a downward motion. And a bull is attacking from below in an upward motion. It is not a certain story over those names, but it is said that they come from bear and bullfights in California. It was like an event in the town on Sunday after church. There were many fights and in the end of the event was a fight between a Grizzly Bear and a Spanish Fighting Bull. Bears were usually in defense while the bull was the first to attack. These fights may have led to the bear and bull analogy of the stock market.
8. The most expensive share is Berkshire Hataway
Everybody has heard about Warren Buffet. He is considered one of the smartest investors. He founded Berkshire Hataway which has the highest shares price in the stock market. A Class A share of Berkshire Hataway (BRK.A) currently costs more than 300’000 dollars. In 1992 it was over 10’000 USD. In 2006, it was worth 100’000 USD already. It went over 200’000 dollars in 2014. And it went all the way to 300’000 in 2018. There are also class B shares which are cheaper if you want to invest in this company.
9. The earliest Investing Book dates from 1688
If we said before that stocks market were operating ages ago, now learn as well that the first investing book is published earlier. The earliest book about invest is Confusion of Confusions, by Joseph De La Vega. It is a Spanish book about speculation and investing. A book that more than 300 years is still very much applicable to the stock market of today!
10. One man used the stock market to understand the U.S. Hydrogen
This fact is so cool! What does the Hydrogen Bomb have to do with the stock market? Not a lot, but you can find things about it by looking at stock market valuations. In the 1950s, the United States was researching the Hydrogen Bomb (or Thermonuclear Bomb). Physicists were forbidden to reveal which fuel was used for it. But a lot of people were curious about it. A professor of economics, Armen Alchian, managed to find out that Lithium was used as the fuel. He saw that during the tests, the stock price of Lithium Corp rose significantly. This company saw a return of 461% during the main year of the experiment! Armen Alchian tried to publish his findings. But it was forbidden by the government for national security. Only much later was he able to publish it! Out of all these stock market facts, this is the one that surprised me the most.