Many retail investors like to speculate in new stocks, especially new stocks after the opening of the market, and even hang up the daily limit every day to hope that their order will be traded. But this approach is very risky, because new stocks fluctuate greatly, especially now that the sci-tech innovation board and the ChiNext price limit have been relaxed to 20%. Once there is a sky-to-floor killing and falling, assets may be lost within a day. It has shrunk by half, and people with poor psychological endurance simply cannot afford such a loss. So why are new stocks prone to such extreme market conditions?
High issuance premium
The P/E ratios of many new shares may be high, especially for new shares on the Science and Technology Innovation Board, which have an average P/E ratio of nearly 70 times. This level of premium issuance has seriously overdrawn the upside potential of subsequent stocks, leaving no room for investors in the secondary market at all. It can only be said that it is too ugly to eat. You might say that companies listed on the Science and Technology Innovation Board have great potential, good growth, and high price-earnings ratios. We believe that a premium can be appropriate, but the hype that seriously deviates from the law of value will eventually be beaten back to its original shape. Judging from the general performance of the science and technology board stocks one month after the listing, this view can be proved.
Main control panel
In the process of listing of new shares, a large number of shares are obtained by institutional investors through allotment in the primary market. Coupled with the shares held by the original shareholders, a large proportion of the shares are actually locked at the beginning of the listing. of. In this way, the number of outstanding shares that can be traded when new shares are listed is very small and scattered. Institutional investors will generally adopt a lock-up method at this time, and then slowly collect chips from the hands of unstable retail investors. Therefore, the daily limit of new stocks can easily appear in the first few days.
When institutions have enough chips in their hands, they are likely to choose to take advantage of the market adjustment to break the daily limit. With the panic selling of retail investors, it is easy for new stocks to hit the green market or even be pushed on the limit.
Subject hype
There are also some new stocks that may be in line with the hot topics of current hype, such as photovoltaics, new energy vehicles, etc. This feature is easy to be used by hot money to lure retail investors into the market. In the early stage, they will think of various ways to let retail investors hand over their chips, and later they will use the advantage of the chips to control the market when the subject is hyped, and the stock price will quickly rise after a wave of consequences. And the retail investors who chase high speculation are in high positions when they enter the market. The gameplay of hot money is very bad, and it is often shipped violently on the daily limit. In the case of a bad market, the new stocks may directly lower the limit.
Excessive speculation by retail investors
Retail transactions are often irrational. Knowing that the second wave of new stocks in the game is very risky, they are sometimes induced by the main force to chase it in with enthusiasm. On the other hand, it is this kind of excessive speculation by a large number of retail investors that has fueled the motivation of the main force to cut leek with new shares. It is a stock with strong fundamentals, and sometimes it can indeed get out of a better market outlook, such as the previous Xiangchun shares. But this situation is a minority after all, retail investors should still treat it rationally.
Considering that after the comprehensive registration system, a large number of new shares are listed, it is no longer scarce. Moreover, there are no ups and downs in the first 5 trading days, so there should be fewer and fewer main players who want to speculate with new stocks. As long as investors learn how to value stocks reasonably, there will no longer be cases of blindly speculating in new stocks and being harvested by the floor.