Understanding share price movement

mn1

Why have many companies done so well after the crash in March 2020 ? 

If share prices over the last 5 years were examined , many companies have done better within the last year than the years before the crash, the graph line is significantly steeper within the last year , in some sectors there has been > 100% increase in share value 

I can see that some sectors have not enjoyed the same rise, but I can not understand how such an event could actually boost the performance of some other sectors  

Many thanks for your thoughts and opinions 






 

HansOndabush

Injection of government liquidity (money printing) inflating assets to give the impression of a healthy economy.

Your two miners have risen on increasing commodity prices caused partly by the commodity cycle and partly by anticipated inflation due to currency debasement caused by the same government liquidity.

Thrugelmir

On what basis do you select your own investments? 

mn1

Thrugelmir said:

Did the companies crash? 

Sorry, by crash I meant the sudden drop in value of most shares

mn1

HansOndabush said:

Injection of government liquidity (money printing) inflating assets to give the impression of a healthy economy.

Your two miners have risen on increasing commodity prices caused partly by the commodity cycle and partly by anticipated inflation due to currency debasement caused by the same government liquidity.

I wonder what would the long term effect of injecting so much money be ? Would one expect the same inflation across all sectors eventually?

jimjames

Looking at those graphs are you reading something into them that isn't borne out by the facts? You're starting a line from the lowest point, surely it's going to be steeper than one from a steady growth line over a longer period? You could equally extrapolate out the green line and it will match.

For AngloAmerican start a line from mid 2017 to 2018 and it will probably be just as steep. It's just very selective data doing short time periods as you have done so I don't think it's showing what you are suggesting

moneysavinghero

Record low interest rates means people are not earning very much in savings accounts so a lot of money has made it's way out of savings accounts and into the stock market.

Thrugelmir

mn1 said:

Thrugelmir said:

Did the companies crash? 

Sorry, by crash I meant the sudden drop in value of most shares

That's caused by nothing more than complete uncertainty. No one wants to be left without a chair when the music stops. Might be terminal. 

mn1

jimjames said:

Looking at those graphs are you reading something into them that isn't borne out by the facts? You're starting a line from the lowest point, surely it's going to be steeper than one from a steady growth line over a longer period? You could equally extrapolate out the green line and it will match.

For AngloAmerican start a line from mid 2017 to 2018 and it will probably be just as steep. It's just very selective data doing short time periods as you have done so I don't think it's showing what you are suggesting

I understand what you say
maybe if I extend the green lines as below, it will show why I thought the prices have actually more than recovered back to the trend 

HansOndabush

mn1 said:

HansOndabush said:

Injection of government liquidity (money printing) inflating assets to give the impression of a healthy economy.

Your two miners have risen on increasing commodity prices caused partly by the commodity cycle and partly by anticipated inflation due to currency debasement caused by the same government liquidity.

I wonder what would the long term effect of injecting so much money be ? Would one expect the same inflation across all sectors eventually?

The end game is that governments effectively default on their debt through high inflation/currency debasement.

MaxiRobriguez

The other thing to remember is that over time share price growth looks like an exponential if the chart isn't in log form.

For the S&P for example, a 10% growth from 4000 is 33% bigger in points than 10% growth from 3000.