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Accompany you to make money in the US stock market!

Hello, everyone, I am the representative of Niuniu class!

Today is a series of courses "20 lectures on American Stock Investment".

The first lecture is "the History of American stocks: through the vicissitudes of a hundred years"

Niu friends, please pick up the small bench and come to class together.

The United States has the largest and most mature securities market in the world. With the process of the United States becoming the number one power in the world, the American stock exchange market has also experienced a hundred years of vicissitudes.

This article will combine the key events to sort out the development process of the securities trading market.

The first stage: from the end of 17th century to the beginning of 19th century

(1) the early days of the founding of the United States: the establishment of the Philadelphia Stock Exchange

During the period of European colonization of America, the economy of the port city on the east coast developed rapidly, and Philadelphia was the most economically developed port city at that time. The first American bank was established in Philadelphia in 1782.

In 1790, the Philadelphia Stock Exchange, the first stock exchange in the United States, was established, which meant the official start of the American capital market.。

The predecessor of the Philadelphia Stock Exchange dates back to 1754.

At that time, more than 200 Philadelphia businessmen invested 348 pounds to set up a business. "London CafeIt soon became the commercial center of Philadelphia. Later, during the British occupation of Philadelphia, another "city pub" replaced the "London Cafe" as the social and commercial center of Philadelphia, and later renamed it.Merchant CafeThis is the prototype of the Philadelphia Stock Exchange.

In 1790, stockbrokers established the Philadelphia Brokers Association independently from other businessmen gathered, and the Philadelphia Stock Exchange was officially established in the same year.

In the 10 years since the establishment of the Philadelphia Stock Exchange, Philadelphia has been the capital of the United States, the most important commercial and political center of the United States, and the birthplace of many American financial institutions.

At first, the US securities market mainly traded treasury bonds, state government bonds and shares of bank and insurance companies.

With the $10 million IPO of the first Bank of the United States, the American securities market ushered in a speculative boom.

(2) the signing of the plane Tree Agreement: the Origin of the New York Stock Exchange

The prosperity of the securities market has brought more business to stockbrokers.

The agreement signed by 24 stockbrokers in New York City under an American sycamore outside 68 Wall Street on May 17, 1792 is known as the "plane Tree Agreement" (Buttonwood Agreement). This agreement is considered to be the origin of the regulations of the New York Stock Exchange.

The Wutong Tree Agreement provides for a fixed commission system, which in essence is to avoid a price war between brokers. This fixed system lasted for 183 years and was not withdrawn until the introduction of the 1975 Securities Law Amendment.

Twenty-five years after the signing of the plane Tree Agreement, the New York Stock Exchange was established, marking the establishment of a more formal securities market system in New York and Wall Street.

The second stage: from the early 19th century to the 1930s

(1) New York has become the center of the securities market in the United States

In 1825, New York.Erie CanalBy connecting the Great Lakes of the United States with the waters of the Atlantic Ocean, New York has become an important transportation hub and its economy has taken off rapidly.

The success of the Erie Canal triggered an upsurge of hype about the concept of "canal" and brought the first bull market to the US stock market, further promoting the development of the securities market in New York and other places.

In the 1930s, New York became the largest securities market in the United States, but limited by the scope of instant messaging, local markets such as Philadelphia and Boston were able to maintain considerable independence.

The 1850sTelegramThe invention and development of the New York Stock Exchange helped the price information of the New York Stock Exchange to spread to various markets in a short period of time. Since then, New York's central position in the American securities market has been gradually established.

(2) the great bull market brought about by the railway

The middle of 19th centuryRailroadThe construction of the United States has accelerated the flow of people and logistics, and added new impetus to the economy. The United States has entered the "railway era."

Railway construction needs a lot of capital investment.The securities market has naturally become an important channel to provide capital.。

Wall Street promoted the construction of railways, which in turn made Wall Street. The huge financing demand generated by the railway makes railway-related stocks and bonds become the main investment in the capital market.

With the gradual burst of huge economic benefits of the railway, speculation on railway-related securities is also on the rise.

According to statistics, three railway securities were listed on the exchange in 1835.During the Civil War, railway securities accounted for 1/3 of the American securities market.

Driven by the California gold rush and the western development, the railway from the United States to California began to be laid on a large scale, and the stock market also ushered in a great boom.

After several rounds of large-scale railway construction, the market demand is gradually saturated, and the position of railway securities in the securities market is gradually marginalized, butThe invention of internal combustion engine greatly stimulates highway construction.。

At the same time, with the rapid rise of steel, chemical, rubber, oil, automobile and other industries in the United States, the stocks of large industrial enterprises have gradually become the mainstream securities in the market.

(3) during the Great Depression

After the end of the first World War, the US economy entered the "roaring twenties", and the prosperous economy naturally pushed up the stock market.

However, with the gradual slowdown of economic growth and the increasingly serious bubble in the stock market, a large number of frenzied speculation in leveraged trading and credit trading finally collapsed, and the US economy fell into the quagmire of the Great Depression.

Frenzied speculation in the securities market, which further worsened the economyMake the government aware of the importance of regulating the financial industry。

In the decades after the Great Depression, the American financial supervision system has been continuously improved and upgraded to form a two-track banking system with American characteristics and a two-line long financial supervision model. That is, different financial entities, businesses and products correspond to different regulatory agencies, while different levels of government (federal / state governments) have different regulatory bodies.

This regulatory framework evolved mainly through a series of reforms represented by the Banking Act of 1933 (Glass-Steagall Act), the Financial Services Modernization Act of 1999 and the Dode-Frank Act of 2010.

The third stage: since the Great Depression

(1) recovery after the New deal to the period of World War II

After Roosevelt's New deal, the economy gradually recovered and the American securities market gradually rebounded. The stock market bottomed out in mid-1932 and continued to rise to the beginning of 37, with a cumulative increase of 324%.

The bull market in US stocks ended on the eve of the second World War.In 1936, Germany and Italy signed the Berlin Agreement in October, and Germany and Japan signed the Anti-Comintern Agreement in November. The fascist Axis Alliance initially took shape.

At this time, the U. S. economy gradually fell into recession, GDP growth declined sharply, coupled with the rapid rising trend of prices at that time, the Federal Reserve began to tighten policy in 1937, and US stocks fell.

From 1937 to 1942, the United States experienced the longest bear market in history.. During this period, in 1939, World War II broke out.

In early June 1942, the naval battle of Midway broke out, and the United States took the initiative in the Pacific Theater, which also became the turning point of the Pacific Theater in World War II.

At the same time, as the US Navy took the initiative in the Pacific Theater, after the fog of the war situation cleared, the four-year bull market in US stocks officially began.

(2) Economic take-off after the war

After World War II, the American economy boomed.Supported by the Marshall Plan, the postwar baby boom, the increase in residents' income, the delayed release of demand brought about by the war, and the two wars against North Korea and Vietnam.Although the US economy has experienced three smaller cyclical economic crises, it has always maintained the momentum of rapid growth.

In the stock market, with the improvement of the economic situation, the US stock market welcomed a bull for more than seven years from June 1949 to August 1956, with an increase of 267.1%.

The US stock market entered a bear market again from September 1956 to September 1957 under the dual influence of the continuous fermentation of Fed interest rate hikes and the weakening of the economy and finally falling into crisis.

To get out of the crisis, the United States still adopted loose fiscal and monetary policies, and U. S. stocks rose head-on in 1957. From February 1960 to 1961, the United States experienced the first dollar crisis and the fourth postwar economic recession. in the same period, the stock market also experienced shock adjustment, but the overall trend remained unchanged under the "e-fever".

In December, 1961, US stocks turned from bull to bear again and suffered a "Kennedy Slide of slump" (Kennedy 1962): since June 1961, the Federal Reserve began to raise interest rates again and raised interest rates by 2% several times in six months, and the federal funds rate quickly rose from 0.5% to 2.5%. The rapid rise in interest rates hit the stock market, and the U. S. stock market began to fall.

In early 1966, as the US economy sank deeper and deeper in stagflation and the Federal Reserve raised interest rates into the second half, the market began to fall, US stocks turned from bull to bear, and opened the prelude to a big bear market for US stocks in the following 16 years.

(3) during the period of economic transition, passing through the "beautiful 50" era of the big bear market

After 1966, the American economy entered a period of transition, which can be roughly divided intoThree stages：

• 66-72: economic growth declines, US hegemony weakens, and high economic growth is unsustainable.

• 73-79: the first oil crisis broke out, Keynesianism went bankrupt and the US economy entered a period of stagflation.

• 1979-82: the second oil crisis broke out in 1979. In order to combat hyperinflation, Volcker began to experiment with monetarism and adopted hawkish high interest rate policy to control prices. The inflation problem that had plagued the United States for 15 years began to be solved.

After President Reagan took office in 1980, he carried out fiscal and monetary reforms according to the supply-side theory, made great efforts to reduce the size of the government, and greatly reduced taxes to stimulate the willingness of labor and enterprises to invest, which laid the foundation for the steady development of the American economy for more than 20 years.

During this period, the US stock market fell into a long run. From February 1966 to August 1982, the S & P 500 index was basically flat, taking into account that inflation reached 175.35% and the real rate of return was less than-60%, compared with about-50% during the Great Depression. an extremely serious erosion of household wealth.

At the same time, in such a big bear market以$Coca-Cola Company (KO.US) $、$International Business Machines Corp (IBM.US) $Represented by others."beautiful 50"Excellent performanceBehind it is the change of the investment concept of US stocks to value investment and the shock of the market as a whole, the result of the accumulation of funds to growth stocks with good performance.

(IV) 1983-07: the era of Great moderation

83 years later, government regulation was relaxed and enterprises came back to life.With the gradual appearance of the effect of the early economic reform, the American economy has entered a new period of development.

As a result of the great bear market of the 1970s, the valuations of most companies were at the bottom, which provided fertile ground for a large number of leveraged buyouts and mergers in the US stock market in the 1980s.Latin American debt crisis and a strong dollarBrought the return of money.

Since mid-1982, the bull market in US stocks has continued, and even the stock market crash in 1987 did not stop the overall upward pace of the market. Under the rapid response of the Federal Reserve, the stock market crash became an excellent buying point for the market. After a short and rapid plunge, the market regained its bull market.

After the Cold War ended,The brilliant achievements of the United States in the arms race began to sink to the civilian field, promoting the arrival of the information technology revolution, the continuous improvement of labor productivity, low unemployment, low inflation and high growth, and the United States ushered in another peak of postwar economic growth.

The US stock market in the 1990s was the era of the rise of institutional investors, and pension funds injected a steady stream of long-term funds into the mutual fund industry. These mutual funds held more than 60% of stock assets for a long time, which became the largest source of incremental funds at the bottom of the bull market in US stocks at that time, and a similar situation also occurred in insurance funds.

In the environment of excessive liquidity, Internet-related stocks have risen irrationally under the pursuit of funds. In 2000, as the Fed continued to raise interest rates, the dotcom bubble finally burst, causing the US stock market to plummet, and the bull market ended and entered a bear market that lasted for more than two and a half years.

In March 2000, due to the Nasdaq bubble, the US stock index, especially the NASDAQ, fell sharply, which also brought about the bear market of US stocks from 2000 to 2002. By September 2000, the Dow and S & P 500 basically reached the pre-decline level. The Nasdaq did not really hit bottom until October 2002.

(5) the 2008 financial crisis

The risks posed by the continued increase in leverage in financial real estate are eventually exposed as the US enters the cycle of raising interest rates.

Due to the rise in mortgage interest rates, home buyers are unable to pay their loans, and the mortgage default ratio continues to rise, resulting in an increase in the default of mortgage portfolios at the bottom of mortgage loans. After the capital chain broke, subprime mortgage institutions began to go bankrupt. Investment funds were forced to close, and the crisis gradually spread and expanded, resulting in illiquidity in the world's major financial markets, and eventually evolved into a global systemic financial crisis.。

As a result, the U. S. stock market suffered its third-largest decline in history after the Great Depression and World War II.

In September 2008, the financial crisis began to spiral out of control, causing a number of fairly large financial institutions to fail or be taken over by the government, triggering a recession.

On Sunday, Sept. 14, Lehman Brothers filed for bankruptcy after the Fed refused to provide financial support, and on the same day Merrill Lynch announced that it had been acquired by Bank of America Corporation. These two events marked the prelude to the global stock market crash of September 2008 the following week, with global stock markets plummeting on Monday, September 15 and Wednesday, September 17.

This round of plunge in US stocks began at the end of October 2007 and ended at the end of March 2009 for a year and three months.

(5) since the financial crisis

In the second half of 2009, the US economy began to recover after nearly a year and a half of recession, and the stock market emerged from a decade-long bull market. There are two main drivers of this bull market: the surge in buybacks and earnings growth.

On the earnings side, corporate earnings maintained moderate growth, but the momentum was weaker than before the crisis. The compound profit growth rate of the S & P 500 components from 2009 to 2018 was 8.16%. From 2000 to 2007, the index was 9.90%.

In terms of buybacks, the common practice of US stock buybacks is to acquire shares in the open market, and to recover shares as corporate inventory stocks, which do not have the right to vote and do not participate in the distribution of benefits, so repurchase passively increases EPS by reducing equity.

Since 2011, the scale of US stock buybacks began to grow significantly, and the total repurchase size of S & P 500 stocks in 2018 was 3.46 times that of the end of 2009. From a sub-industry point of view, the scale of repurchase is positively correlated with the increase of industry index, and large-scale repurchase plays a significant role in promoting the rise of information technology, health care, consumption and industrial index.

meanwhile,After the financial crisis, American technology companies have developed by leaps and bounds, gradually becoming an important driving force, leading the tide of technology stocks, and also contributing to the super bull market of US stocks in the past decade.

All this was interrupted by COVID-19 's epidemic in 2020.。

In March, global investors experienced the most tumultuous month in the history of US stocks:Four fuses in 10 days. The Dow plummeted from a high of 29,000 points in February to a low of 18,000 points on March 23, a drop of 10,000 points in just one month.

In response, netizens invented a word called Trump Trump Circuit Breaker:There are five circuit breakers in the history of the US stock market and four during the Trump administration.。

However, the March plunge did not end the bull market in U. S. stocks. Led by the Fed's huge liquidity stimulus and technology stocks, the Nasdaq and S & P have hit record highs, and the Dow is close to new highs.

But no one knows where the bull market created by this flood of liquidity will go.。

However, everyone will choose to participate, because in the era of paper money, the assets that can be allocated are really limited.

Today's after-class discussion:

Do you have any investment memories of the 2008 financial crisis? Feelings?

Welcome to the message area for interaction!

The class representative will select 8 high participation friends in the discussion area and give 188 Niuniu points!

Tips: tend to choose to actively put forward feasible suggestions related to the course,

Or those who can participate in the after-class discussion!

The second lecture tomorrow"enter the three major exchanges of US stocks"Waiting for you!

Don't break up until we see you!

Attached course link:"20 lectures on investing in American stocks"