Policy city, game city, national city, transition city and shock city are the five characteristics of "China bull market", which all investors must face seriously and solve properly. Bian Xiao sorted out five characteristics of China bull market here for your reference. I hope everyone will gain something in the reading process!
In the foreseeable future, based on the factors affecting the company's profit growth, China's economy will continue to exist, and the bull market is hard to see in the short term. However, while sharing the "feast" of China stock market, we have to face up to the "China bull market". Because of its unique phenomenon, it is more difficult for investors to predict market trends and corporate profits, and to improve their understanding of its main characteristics is helpful to adopt corresponding strategies, identify possible investment opportunities and avoid corresponding market risks.
Five characteristics of "China bull market"
1. Policy city.
The market has only policies and foresight. For more than a decade, every major turning point in the market and the emergence of the market have laid a profound policy imprint. Whether we admit it or not, the most prominent factor affecting China stock market is still the direction of policy. We have noticed that whether it is the speed of issuing new shares, the return of red chips, the introduction of stock index futures, the introduction of monetary policy, the proportion of reducing state-owned shares, including the pace of issuing new funds and so on. It may become a bargaining chip for stock market policy regulation. When the stock index of this bull market keeps climbing to new heights, overvaluation is not the most worrying thing for the market. Fear of policy repression is the Damocles sword on investors' heads. Policy trend has become the most important factor affecting the stock market, changing the inherent operating rules of the market. The vagaries of the market can finally be explained by policy regulation, which constitutes the main feature of "China bull market". Policies can not only produce market conditions and create inflection points, but also change the operation rhythm of the stock market, accelerate or slow down the evolution of the market, thus attracting many market participants to study the "policy base" and gradually forming the "backbone" of the operation of market stock indexes. We believe that for a long time, it is still difficult for the stock market to shake off the shadow of policy regulation. China's stock market is often in a state of contradiction, which is not only afraid of policy regulation, but also inseparable from policy support, which has become the main obstacle for the market to gradually mature by relying on its own regulation function.
2. Game market.
The stock market is a place where interests are redistributed. After IpO, the financing in the primary market flows into the business activities of listed companies, and if the dividends in the secondary market are not considered, the re-division of market interests can only be regarded as a "zero-sum game" brought by capital gains. Statistics show that in 2006, 1.4 million listed companies earned a net profit of 389.2 billion yuan, but if the stamp duty is calculated at 0.3[%], if the daily average transaction volume of 200 billion yuan is considered, it will be turned over to the state treasury every year, and if the average commission of brokers is calculated at 0.2[%], the annual commission income will be 6543.8+0.92. Behind this game, there are multiple game relationships between management and market, banned shares and tradable shares, institutions and retail investors, including both the contest between policy and market and the structural game within the market. Under this game relationship, the premise for retail investors to beat the market is to beat institutions first, and institutions to beat the market must first avoid policy risks. The unexpected introduction of "5 30" stamp duty is the fuse of this round of stock market adjustment, and it is a successful game between management and the market from the perspective of preventing systemic risks caused by sharp market rise.
3. National market.
The narrow investment channels make stock investment the main channel for residents to invest. Under the condition of imperfect social security, the accumulation of wealth has become the goal pursued by the whole people, and the substantial growth of residents' savings over the years reflects people's worries about the rising expenditure on housing, children's education, old-age care and future inflation. Asset appreciation has become an inevitable choice for people to get rid of poverty and pursue asset security. The stock market has become the first choice for domestic residents to get rich because of its strong liquidity, low investment threshold and quick money making. In the first half of the year, the market showed the market structure characteristics of saving and moving, and retail investors traded stocks. Under this background, a vigorous national stock trading movement was produced. However, due to investors' insufficient understanding of the nature of the stock market and the lack of awareness of risk prevention, low-priced stocks and junk stocks soared in the first half of the year, which subsequently triggered the plunge of theme stocks and poor performance stocks on May 30, which sounded the alarm for investors to chase short-term wealth.
4. Cities in transition.
Because listed companies are in the period of non-tradable shares, the market has entered a special stage, in which listed companies have become the supporters of their own market value growth. First of all, it is reflected in the commitment to the future profit or market value growth of the company due to equity incentives. Secondly, the major shareholder has changed from "hollowing out" in the past to "injecting", but because the "injecting" of "high quality" assets is often one-off, there is no corresponding guarantee for the sustained growth of profits. Third, it reflects that listed companies are both investment targets and market participants, and they are keen on equity investment in the secondary market, resulting in a sensational profit effect, which may deviate from the original main business and amplify the company's operating risks. Fourth, Dafa seeks favorable cash-out opportunities to further overdraw the company's profits. Listed companies may create short-term profit growth, raise stock prices, overdraw the future and create the best escape opportunities. Cities in transition make it more difficult for research institutions to predict market trends and corporate profits.
5. Shocked the market.
First, the varieties promoted by research institutions are highly similar to their views. Because of the growing influence of research, it directly affects the flow of mainstream funds in the market, and it is also easy to become an influencing factor for the market to help rise and fall. Second, with the participation of the whole people, retail institutions are flocking, and market development is highly related to the number of retail accounts opened. It is easy to induce the market to blindly follow suit. Third, the undercurrent of overseas funds flowing into the stock market aggravated the market turmoil. Fourth, cross-shareholding of funds increases stock market risk. Although camping in large-cap blue-chip stocks and blue-chip stocks may objectively stabilize the market, due to the serious phenomenon of cross-shareholding, once the market plummets and the holders redeem in large quantities, it is still difficult for the fund to get rid of the "prisoner's dilemma", which may become the last straw for the market crash to overwhelm the camel. Fifth, the profit fluctuation of listed companies has increased. Because the profits of listed companies are not only affected by the economy itself, but also by the injection of assets, the possibility of ups and downs of profits increases. In addition, under the background of tax merger, new accounting standards and equity incentive, the false prosperity of listed companies' performance growth is ushered in. Accordingly, the basic research based on profit analysis has also been challenged as never before.
In essence, the "emerging plus transition" domestic securities market has created the main characteristics of "China bull market", which has also caused the escalation of the debate on value valuation, increased the difficulty of fundamental research and amplified market risks. The characteristics of "China bull market" remind investors that the stock market is a place where interests can be re-divided. If the profit growth of listed companies is unsustainable, the market will become a "zero-sum game" In addition, the fundamental research should pay special attention to the study of policy trends, fully understand the market risks brought by the participation of the whole people, rationally treat the abnormal fluctuations of listed companies' profits during the transition period, and prevent the risk of high stock market volatility.
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