Inequality in society drives stock-market performance
Raise inequality and demand for stocks goes up, and so do prices. The question is whether we are at a turning point in how wealth is shared.
There’s a bit of GameStop in everything. The so-called meme stocks led by the videogame store put traditional investors to shame in early 2021, achieving 1,000%-plus gains in a few weeks and breaking free of the shackles of ordinary financial analysis. Instead of price-to-earnings ratios or even the potential addressable market for their products, what mattered for the share price was the ability to attract money from private buyers who got their information from Reddit.
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