I am completely flummoxed by the stock market - and in particular today's giddy highes

[stopdiggin]

Can someone explain to me (preferably in simple terms - and at least somewhat seriously) What .. ? How .. ? Underpinnings .. ? Rationale .. ?

(does it have something to do with punching through an imaginary barrier/high .. ?)

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[spooky3]

1. Talking heads have attributed it to heavy investment in AI. Without that, they say that the rest of the

stock market would be essentially on pace with inflation.

[Fiendish Thingy]

2. AI bubble

Diversify your portfolio- we just bumped up our non-US equity funds (mostly Europe and Canada, whose market has been on fire, and not due to AI).

[Marie Marie]

3. I don't know anything about how the stock market works but I will agree with those that say

that most stocks are way over-valued and I guess there are creative ways to fool the shareholders and public of this inflated value. Look at Tesla. And yes, the AI Bubble. whose predicted burst is just around the corner (so they say).

[Mark.b2]

4. I was prepared for a meh day to finish the week...

given my portfolios had mostly been meh all week…except transports. I work in the freight transportation sector, and it’s wht I know best. And my transports had an outstanding week, helped largely by good Q4 earnings. Transports are considered leading indicators, so I’m hoping the economy in general is setting up for a good run.

I do have some “fun money” that I’m willing to use for a little speculation. I’m playing around with some of the data center stocks. I’ve had a lot of fun with them over the last year, but day-to-day, they are not for the faint of heart. It is nothing for my bitcoin/data center portfolio to be down $10-20k before lunch but close up $12k by the close. And vice versa. I had one day in Oct or Nov when I closed up $82k just for the day, and days later, I had “lost” it all plus more. I haven’t seen enough that would cause me to bail and look elsewhere for investments.

Some people go to the casino, and I play with data centers. And there’s probably not much difference!

But, as for today, Q4 earnings have been decent for most. I know my company’s customers—mostly retailers who ship a lot of freight—are cautiously optimistic that consumers will be spending more, particularly in the 2nd half of 2026.

[muriel_volestrangler]

5. Lesson 1: The Dow Jones is not the most representative index of "the stock market"

It's an oddly-constructed relic from pre-computer times, that uses only 30 selected companies, with an odd weighting that no-one can really justify in the present. It's reported in the news because it's been reported for many decades. Ignore it.

The S&P 500 is the 500 largest US stock market companies, weighted by their market capitalization. This makes sense. This is what investors use as a benchmark, or in index trackers (there are indices for smaller companies, the tech-heavy NASDAQ, and if you look really hard, you may find something tracking the Dow Jones, but the S&P 500 is by far the one most tracked and studied).

That did not reach a high today - down a little from what had been an all-time high on Monday.

[DFW]

6. It's a game I haven't played in almost two decades, mostly a spectator sport for me

I had taken a flyer on 500 shares of Apple in 1998 at $38. My genius (Republican oriented, of course) broker "warned" me about 15 years ago that Apple was looking "shaky," and I should sell my position if it dipped below $190. I said, "sure, whatever." It dipped to 189, and they sold it. After taxes on he gain, I still had enough left over for a few nice vacations for the family, but if I had kept the position, it would have been worth about $3 MILLION. I have since told them NOT to recommend ANYTHING to me, and let sleeping dogs lie.

There will always be bubbles here and there, and bubbles usually burst. The price of Gold was $5500 an ounce less than ten days ago. A couple of days ago, it was $4600. All those experts touting gold as THE thing when it was $5500 and convinced a few people to put their life savings into gold have some 'splainin' to do. It's back over $4900 now, but it remains very volatile. I'm sure the stock market is the same. I remain grateful for letting my CEO talk me into risking emptying the piggy bank, also in 1998, to buy a share of Berkshire Hathaway A. I told the clueless broker to cease and desist with any and all "sell" recommendations over the years, and so far, I'm glad I did. I'll probably end up bequeathing it to my US-based daughter, since if I sell it now, I'll have a capital gains tax bill into six figures, and I don't want Trump's government getting their hands on that.