Questions answered: What does the "28th" phenomenon mean?

First, let’s explain the 28-20 phenomenon: Barledo’s Law (also called the 28-80 Law, the 28-80 Phenomenon), also translated as “Pareto’s Law” in some places, is the Italian economic law in the late 19th and early 20th centuries. Discovered by the scientist Valledo (Pareto).

He believes that in any group of things, the most important ones account for only a small part, about 20%, and the remaining 80%, although they are the majority, are secondary, so it is also called the 28-20 rule. . The most widely circulated saying is: "80% of revenue comes from 20% of customers."

Also known as the 20/80 rule. "The majority, they can only have a small impact.

The minority, they have a major, major impact" The "28/20 rule" is ubiquitous in life. 80% of merchant sales come from 20% of goods, and 80% of business income is generated by 20% of customers; the "28th phenomenon" is a new interpretation of the recent volume and energy distribution of the A-share market, which is very likely to form a mature overseas capital market. The characteristic is that heavyweight stocks account for 20% of the total number of listed companies and account for 80% of the total transaction amount. This is the "28 phenomenon" of transaction distribution.

In the early days, the "28th phenomenon" also existed in the A-share market, which mainly refers to the distribution of the number of stocks that rose and fell, that is, 20% of the stocks rose and 80% of the stocks adjusted or fell. Judging from the current trend characteristics of the A-share market, the "28 phenomenon" in trading volume distribution has indeed become a trend. On the one hand, it is because the number of heavyweight stocks is gradually increasing, especially because the focus of the Shanghai stock market is increasingly inclined to welcome the big stocks. Market capitalization blue chip stocks.

This is even more true after the IPO restart. Bank of China, Beichen Holdings, Daqin Railway and Industrial and Commercial Bank of China, etc., will inevitably cause funds to gradually "emigrate" to heavyweight stocks. On the other hand, because the investment value of heavyweight stocks is increasingly recognized by the market, heavyweight stocks that were once considered "tasteless" are also favored by small and medium-sized investors, thus activating the equity nature of heavyweight stocks and increasing the turnover rate accordingly. .

Institutional changes accelerate the "28 phenomenon" It is worth pointing out that if the current "28 phenomenon" in trading volume distribution has just begun, then with the introduction of relevant supporting systems, the "28 phenomenon" Phenomenon" may show an accelerating trend. In particular, the introduction of stock index futures and margin trading policies will further reveal the valuation premium of heavyweight stocks.

At the same time, the issuance of covered warrants will also give heavyweights a higher trading premium, because the issuance of warrants may be the "exclusive right" of heavyweights, thus giving heavyweights a new valuation premium. power. In other words, heavyweight stocks will increasingly be favored by funds, and coupled with the existence of factors of institutional change, a virtuous cycle will also appear.

Therefore, the market does have reason to predict that the transaction volume of the Shanghai and Shenzhen 300 Index will reach 80% in the future. The stock price structure will undergo profound changes, and changes in trading volume distribution will inevitably lead to profound changes in the stock price structure of the A-share market. The premium of small-cap stocks that has been popular in the past is very likely to be fundamentally changed, and the vast majority of small-cap stocks will be marginalized. , only small-cap stocks with real performance growth trends are likely to be favored by funds.

Most heavyweight stocks have gained liquidity due to covered warrants, stock index futures, and margin financing. Therefore, the valuation premium of heavyweight stocks is expected to gradually appear. This is actually the reason for the recent bull market in the A-share market. One of the driving forces. Regarding the so-called "February 8th phenomenon", when most large-cap stocks have been heavily speculated, it is not easy to chase the rise.

Although we also believe that the A-share market will be in line with the international stock market in the future, will the investment philosophy formed over the years really be so easy to "abandon the old and embrace the new"? It is worth mentioning that when the market has already risen sharply and may peak at any time, institutions frequently release this kind of public opinion, and investors have to be on guard. In addition, the current round of big market movements since the 1,000-point period has been close to the upper limit of the previous round of big market prices in terms of time and space.

Although we are extremely optimistic about the future market, the bull market does not only rise but never fall. Since buying stocks has a small chance of winning and a big chance of losing, why bother looking for stocks that are 20% likely to rise?

In addition, this phenomenon has also appeared recently: heavyweight stocks accounting for 20% of the total number of listed companies account for 80% of the total transaction value. We must also pay attention to this! .

What is the "28 phenomenon"

The "28 phenomenon" should be interpreted as the "28 rule", also known as Pareto's law, the law of imbalance.

< p> Because in real society, usually 20% of the people control 80% of the property, 20% of the people concentrate 80% of the people’s wisdom, 20% of the people complete 80% of the completed tasks, and 20% of the people manage 80% The same is true for the stock market. It often happens that 20% of hot stocks rise sharply while other stocks do not rise or even fall.

According to the principle of value investment, start from the "eight". "In it, we are looking for a new "two" and seizing the opportunity to partially exchange into large-cap blue chip stocks. However, it is not that easy to find a new "two". The main confusion is the uncertainty of valuation standards and the timing of intervention. The timing is not grasped. It is also very uncomfortable not to be in a hot spot, and it is easy to waver in your own valuation and choices.

When the market fluctuates upward, the switching of hot spots and changes in investment themes are often more elusive. For investors, it will be increasingly difficult to choose industries and companies in the next stage. Therefore, it is recommended that you entrust your funds to trustworthy fund companies and rely on institutional professionals to take care of your wealth. This phenomenon is often said in my country's stock market. In fact, 20% of stocks rise, and 80% of stocks fall or do not rise.

How important is it that the 80/20 rule is widely used?

Valledo’s law (also called the 28/20 law) was discovered by Italian economist Valledo in the late 19th and early 20th centuries. He believed that in any group of things, only the most important ones are A small part, about 20%, and the remaining 80%, although they are the majority, are secondary, so it is also called the 28-20 rule. The "28-20 rule" is common in life. 80% of a merchant's sales come from 20% of the goods. 80% of business revenue is created by 20% of customers; in a sales company, 20% of salesmen bring back 80% of new business, etc.; the "28th phenomenon" is as common as the "golden section". 2 Eight Rules: You develop customer categories, that is to say: you spend 80% of your energy to develop large customers and 20% of your energy to develop small customers. In this way, you can have both large and small customers, and your business will save time and energy. Twenty-eight The law is the unspoken law of the sales industry. Most people just want to survive and do not regard work as their own career. And some may not succeed even if they try their best. In the end, only 20% of people create 100% of the work. Eighty percent sales performance. 80% of a company's profits come from 20% of large or loyal customers.