April 2, 2016

The stock market is not the economy

If you use Danth Kanti tooth paste, use Baba Ramdev soap and shampoo, biscuits from the local baker,  eat bread from a local bakery (or your wife bakes it herself), you buy a Motorola phone, a Samsung phone, a Haier Refrigerator, a Mitsubishi aircon, a Hyundai car and fly Indian airlines, your spending is not being felt by the market. It is just not visible to the market.

You eat out in a restaurant, you drink imported beer, your children drink Coke and Pepsi. You eat at McDonald, and Kentucky Fried Chicken. So that part of your ‘branded’ eating out and its margins are lost to the equity market.

The cash that you pay to the teacher for tuition, the cash that you paid to the caterer, the cash that you paid to the taxi driver – are all lost to the economy itself, so the market cannot capture it at all. The money paid to the grocer, vegetable vendor,…etc. is also lost to the market. -

See more at: http://www.subramoney.com/2016/03/the-stock-market-is-not-the-economy

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