This company owns the western hemisphere and nobody is talking about it
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Weekly Market Update 🗒️💡
The US added 236,000 jobs in March, which was about in line with expectations. The unemployment rate fell lower to 3.5%, against the expectation that it would stay stagnant at 3.6%. This decrease came as labor force participation reached its highest peak since before COVID-19.
More and more people entering the labor force is a strong sign for the economy.
Below is a chart showing how many jobs were added by each type.
The S&P 500 lost 0.1% last week breaking a 3-week consecutive winning streak. The Nasdaq was down 1.1% for the week while the Dow managed a small gain.
Here are some of the S&P 500’s top gainers:
Tweet of the Week
The Most Powerful Company You’ve Never Heard Of - BlackRock
BlackRock was formed by founder and CEO Larry Fink in 1988 in New York City as a risk management and fixed-income asset manager.
Today, BlackRock stands as the world’s largest asset manager with $10 trillion USD in its portfolio.
According to GOBankingRates, there is currently about $49 trillion in circulation across the entire globe. If you put that into perspective, BlackRock manages just over 20% of the entire money in the world. Ya… it’s that big.
So how did BlackRock become one of the largest companies in the most silent way possible?
Let’s find out.
The Big 3
BlackRock.
Vanguard.
State Street.
The 3 largest passive fund asset management firms.
But they’re all interconnected. State Street is owned by BlackRock, and its largest shareholder is Vanguard. Vanguard is the largest shareholder of BlackRock owning about 8.62% of the company. So it seems all roads lead back to… you guessed it…BlackRock.
Together, BlackRock and Vanguard own 18% of Fox, 16% of CBS and 13% of Comcast - which owns NBC, MSNBC, CNBC and Sky Media Group as well as 12% of CNN and 12% of Disney, which in itself owns a number of subsidiary companies.
You can see how having a controlling position in all of these companies can make you quite powerful. But it doesn’t stop there.
BlackRocks Secret Weapon
BlackRocks secret weapon is an advanced trading algorithm called Aladdin, which was created in 1988 and operated over $21.6 trillion in assets.
The software executes an average of 250,000 trades per day and controls over half of all ETFs, 17% of the bond market and 10% of the stock market.
It collects data on every market, company and asset and uses its machine learning to make trades faster than a human ever possibly could. This software is relied upon by every major bank and fund to beat the market.
With that being said, if you ever think you can beat a computer in the short term, you can’t. Long-term investing over everything.
There are a few issues with Aladdin’s algorithm. If the system were to ever get hacked, it could have devastating effects on the global economy. Another issue is that this software gives companies like BlackRock and Vanguard massive amounts of power over the economy and the ability to shape it where they see fit, leaving retail investors like you and me at a massive disadvantage.
However, Aladdin has done some good for the economy. It actually saved us from an even greater collapse during the 2008 financial crisis. Aladdin was used to figure out which assets to keep and which ones to let go of.
Its success earned it free reign to decide what to do with the $42 trillion printed during the Great Recession. The majority of the money was allocated to bonds and funding mortgage companies as well as banks, in which BlackRock was already heavily invested… funny how that worked out.
The influence of BlackRock has grown and now 70%+ of all U.S. stock market trades are executed by algorithms. In other words, we’re competing against supercomputers.
Voting Power
The influence of the Big 3 doesn’t just stop there. With ownership comes voting privileges, and with their amount of ownership their voting power is influential.
The Big 3 collectively have an ~22% stake in S&P 500 companies and represent ~25% of the votes cast at annual meetings. Essentially, they have the power to determine the structure of management and corporate policies of some of the largest companies in the world.
What This Means For You
This post wasn’t meant to scare you into never investing again. In fact, the opposite. Now that we know that a large portion of the money in the stock and bond markets are managed by the Big 3, we can use that to our advantage.
Usually, if a company has a large influence on the market they are well within its right to predict where the market may be going. It would be beneficial to listen to the forecasts of these companies as it could help you in your own individual investing.
If you want to check out BlackRock’s 2023 Global Outlook Q2 Update click here. I’ve read through it and it’s very good information that could help you make some money.
You’ll never be able to beat the algorithmic trading systems these large firms have in place, so don’t even try. But what you can do is ensure you’re investing for the long term and sticking to your strategy.
Keep building your empires.