The Miracle Behind the Growth of The Stock Market

The Miracle Behind the Growth of The Stock Market

The growth we’ve experienced in the last four decades in the economy as well as in the stock market is nothing short of a miracle. I attribute much of this growth to advancements in technology- specifically computer processors.

Prior to the 1970’s computers were as big as refrigerators and operated in cool storage rooms. In these computer centers lab technicians long white coats scuttled about. They had received specialized training on how to run and operate these behemoth machine. Then came along Intel’s 4004 processor in 1971.

 

What Intel’s new processor accomplished was that it gave entree to the smaller computers. The new machines produced reduced in size to a mere 250 pounds. Two or three years later, the first personal computers were introduced by IBM, Compaq and Apple. By today’s standard the first personal computers were clunky and very limited in processor power- in fact the Intel 4004 processor could only computer 92,000 operations per second.

Despite this meager 92,000 operations per second Intel’s 4004 chip has given rise to a lot of technological innovations. We’ve come a long way since in comparison, the Apple’s M1 Max processor released in 2021 can run 10.4 trillion operations per second.

Advancements in Technology have had a huge impact not only on the economy, but also out the stock market. The seventh largest stocks in the S&P 500 at the close of the 2021 business last year, were all tech companies. They comprised an unprecedented 28% of the overall market index weight. Prior to 1975. The stock market returned 9% per year. Prior to 1975. Corporate profits grew at 4% per year, after 1975 corporate profits accelerated to a growth rate of 14% per year and the market return moved to above trendline annualized return of 12%.

The impact that technology has had on us is nothing short of a miracle- not only from the standpoint of the economy but also from the standpoint of the stock market.

This article is adapted from an exclusive interview with Robert Zuccaro August 2022.

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Alan Olsen, CPA

 

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

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MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

 

 

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