The changeful market

After Apple reported a strong quarter report, the share price climbed to $201.32 per share. The market stops talking about Faangs (Facebook, Amazon, Apple, Netflix and Google) and starts talking Maga (Microsoft, Apple, Google and Amazon), since these four companies have delivered strong earnings reports this quarter while Facebook and Netflix show slowing growth. Though I do not think that the entire market will shift their attention completely in such short period, it shows how changeful the market can be.

Because of the attention effect, once a stock is losing its attention, the stock price will fall significantly, as investors change their attentions to other stocks, they will switch the stock to other more popular stocks. Meanwhile, those which gain more market attention will increase in their share prices. In addition, as we can see that the number of the core stocks decreases from five to four, this means fewer companies are gaining more attention, this could lead to a concentration of market attention as well as market capitals. This will make larger stocks becoming larger and smaller stocks becoming smaller, leading to widening the market value gap.

Because of the concentration of market attention and capital, I think that we are not far from seeing companies which are worth trillions of dollars, and even trillionaires, as rich people's wealth is closely related to stock performance.