Aug 21 2009
Is the Stock Market Fixed ?
How does the Stock Market work ?
The stock market is up yet again today, which is odd given the doom and gloom that was around just 6 months ago. It is often said that the stock market is a simple market that reflects the basic law of supply and demand i.e. if something is in demand and there is not much supply then the price will go up, or if something is not in demand and there is a lot of supply then the price will go down. If things on the stock market were so simple then that would be fine as we could all have a go at trying to figure out what is in demand and investing in those stocks.
In reality however there are forces at work behind the scenes manipulating stock markets and stock prices. People with large amounts of cash buy and sell vast quantities of stocks with the sole purpose of driving prices where they want them to go. They also further assist these legal efforts at market manipulation by some illegal methods such as spreading false rumors about companies e.g. company xyz is about to go bust time to sell and get out quick.
How do I know that such practices go on ? Because one of the ex-hedge fund managers - Jim Cramer - has said this is precisely what he used to do.
Jim Cramer in an excellent video explains some of the tricks that market manipulators use. How does he know ? Because that’s precisely what he used to do .
In recent times, who benefitted the most from the recent financial turmoil ? Well it turns out it was Goldman Sachs, as a number of its competitors were completely wiped out or taken over. Some people given to conspiracy theories say this was not accidental and that Goldman Sachs is in large part responsible for what happened on the stock market in 2008. I have no way of knowing if there is any truth in such theories, but given human nature it is hardly beyond the realms of impossiblity.
To see Jim Cramer’s video check here - How Does the Stock Market Work
For information about basic stock market charting and stock trading see - stock trading for beginners
Alternatively check out Warren Buffett for info. about long-term value investing !
