In the capital market (such as stock futures market), there will be some other fools willing to buy at a higher price. This operation strategy is usually called fool wins fool by the market, so it can only be applied in the rising stock market. Theoretically speaking, stupidity also has its reasonable side. The stupid strategy is that there is a high price above the high price and a low price below the low price, and its rules of the game are like a baton. As long as it is not the last stick, there will be profits, and those who do more will have profits. Short sellers reduce losses, and only those who receive the last stick are unlucky. What the bigger fool theory wants to reveal is the motivation behind speculation. The key to speculation is to judge whether there is a greater fool than yourself. As long as he is not the biggest fool, he must be the winner, just a matter of winning more and winning less. If no bigger fool is willing to pay a higher price to be your next home, then you are the biggest fool. Any speculator only believes in the biggest idiot theory. In the theory of analyzing the stock market from the perspective of popular psychology, the greater fool theory has been widely known. Some investors in the stock market simply don't care about the theoretical price and intrinsic value of stocks. They only buy stocks because they believe that in the future, more fools will take this hot potato from them at a higher price. The basis for supporting Bo Silly is that the investing public's judgments on the future are inconsistent and unsynchronized. For any local or overall news, there are always people who are too optimistic, some tend to be pessimistic, some act too early, and some act too slowly. The difference of these judgments leads to the difference of overall behavior and stimulates the incentive system of the market itself. This phenomenon is also quite obvious in China stock market. There are two kinds of stupid behavior, one is emotional stupid behavior, and the other is rational stupid behavior. The former did not know that he had entered a stupid game when he acted, nor did he know the rules and inevitable results of the game, while the latter clearly knew the stupid behavior and related rules, but only believed that more and more stupid investors were about to intervene in the current situation. Therefore, investing a small amount of money to bet on a rational fool, provided that more fools take over, is the judgment of the public psychology. When the investing public generally feels that the current price is too high and needs to evacuate and wait and see, the real high point of the market will really come. It's simple to say stupid, not the stupidest, but it's not easy to do it, because it's not easy to judge whether a person is becoming more and more stupid, and a rational fool can easily become the stupidest. Therefore, if you want to participate in Bosha, you must fully study and analyze the public psychology of the market and control the psychological state. Use the brain instead of glands, which is Buffett's famous saying. What the brain should do is to judge the future operation of the enterprise and the psychological trend of the public. Glands will only make people do things by instinct. Buffett is Graham's student and Graham is Dow's disciple. Buffett 100% does not exclude market speculation. I will never take off my existing shoes until I find better ones. Therefore, it is not the most reasonable reason to give up completely on stupid phenomena. At the level I can control, maintaining a certain degree of rational stupidity can be used as an investment strategy in the irrational market. In Shenzhen and Shanghai stock markets, speculative atmosphere always exists more or less, and quite a few speculators are irrational, and sometimes even crazy gambling is for amateur investors. It is not easy to grasp the profits brought by such idiots, but for professional investors, they should try their best to make use of this market atmosphere, invest a certain proportion of funds and be rational, which is often aggravated by news factors. For example, a strong stock is rising day by day, and the P/E ratio is getting higher and higher, which is obviously unreasonable. Moreover, there is no news that this stock is beneficial to many news, but the stock price is skyrocketing, which makes traders who have not bought at a low level itch. Therefore, buying at a high price, chasing the empty will lead to a further rise in the stock price. The more you buy, the higher the price rises, and the more people buy. Soon after, it is strange that the market will naturally have a lot of good rumors about the stock, and the unreasonable rise has also become a justified rise. Therefore, market participants often think that it is the trend that determines the news rather than the news. Stocks with good trends will attract buying. It will also attract good news, so people who choose Bo silly strategy do not need to seriously study the fundamentals of individual stocks. The only thing they need to pay attention to is that the trend of stock price and the cooperation of volume chasing up and down are vividly reflected in this operation. Strictly speaking, the core of the greater fool theory is how to grasp the relationship between homeopathy and reverse thinking, and there will be more discussion about high-priced buying in the later part. Selling at a low price is a taboo in stock market operation, but some people can sell at a higher price by chasing goods at a higher price. Selling at a low price can make up for it with a lower price, which is certainly not a bad thing. Perhaps it is the so-called "highly skilled artists are bold, bold and highly skilled" market. Many times, we can't speculate with simple value theory. When people are enthusiastic, rational value evaluation often fails. At this time, we need to think about the problem from the perspective of public psychology, and judge whether the most dangerous time of the market has quietly arrived according to the expectation of market sentiment.