Today I saw an article on the official account of the Beijing News in the circle of friends: The 13th National People’s Congress (term ends in a few days) raised an article 6178 to the China Securities Regulatory Commission at its fifth meeting (March 5, 2022) Suggestion No. "Suggestions on Severely Cracking down on Feng Shui Blind Testing of Stock Market Trends".
Today, the China Securities Regulatory Commission received a reply: After careful study and consultation with the Development and Reform Commission and the Ministry of Public Security, the relevant questions are now answered as follows: Your suggestion on "severely cracking down on Feng Shui blind test of stock market trends" is necessary to regulate the release of securities research reports. It has strong guiding significance to protect the legitimate rights and interests of investors and maintain the order of the securities market. The China Securities Regulatory Commission has always attached great importance to the supervision of the release of securities research reports, established a basically sound system of rules and regulatory mechanisms, and continued to strengthen daily supervision and law enforcement, and strive to improve the quality and compliance level of securities research reports.
After reading this passage, I also want to write a little bit of my thoughts.
（1）
There are three major factions in the U.S. stock market.
1. Value investing represented by Buffett
Buffett became a value investor because: he was born in the United States, the most developed and active market for currency-capital investment, and he was born in the best era of the United States (it is said that the United States has become the world's largest GDP since 1890, which is 100 Still thriving for many years). Therefore, when engaging in value investing, you also have to look at the right time and place.
Buffett doesn't look at macroeconomic indicators or news briefings, he just looks at a company's financial report and capital changes in a solid manner.
Honestly go to the company to conduct interviews to verify the authenticity of financial data. Although there are accounting and audit firms, credit rating companies, Wall Street supervision, Wall Street analysts, and Wall Street media in the United States, financial report fraud is still emerging one after another. Don’t you see that Enron and Lehman Brothers collapsed suddenly. Therefore, for value investing, it is necessary to verify the authenticity of financial data. You have to honestly look at the capital changes of the stock (such as reduction of holdings, additional issuance...).
Buffett engages in value investing. Once he invests, he will not move for a long time. He will honestly wait for the company's revenue-profit, and will not change hands like other investors. In fact, Buffett's logic is to eat the dividends of the continuous rise of the United States as a whole, which means rising with the rocket.
2. Quantitative investment school represented by Renaissance
Renaissance is a company specializing in quantitative trading. The founder of Renaissance is Simons, who taught mathematics at MIT and Harvard University, and later founded Renaissance Quantitative Trading.
This company is not like Buffett's value investing in corporate financial report research. Renaissance doesn't care about whether a certain stock's revenue-profit-market value is good or bad, whether a certain stock has a hype theme, whether its industry has prospects, these things. why?
Because the entire stock market is full of all kinds of true and false news, you can't judge which ones are true and which ones are false. So the Renaissance does not judge, but you have a thousand ideas and I have an old idea: no matter whether you are true or false, no matter what reason you judge, anyway, in the end you have to come up with real money to trade. This is the same as what I always say: the demand that does not pay the bill is a pseudo-demand.
Therefore, the main model of Renaissance's quantitative trading is: the real volume and price trading data of the stock market.
A person has his own reasons for buying a stock, and a person has his own reasons for selling a stock, but transactions of real money can never be faked.
Therefore, if the capital investment logic of Renaissance Company is applied to the paradigm of economics, it is a typical microeconomics-Adam Smith: full market competition game-transaction.
3. The hedge investment school represented by Bridgewater
Soros, Dalio Bridgewater and the like are all well-known hedge investors. This gave them a lot to see. I remember reading in Dalio’s book that Bridgewater’s analysis model has tens of thousands of analysis dimensions, and the macroeconomic indicators have been studied all over (GDP, taxation-national debt; M0-M1-M2, deposit rate - loan interest rate - foreign exchange rate; PMI-PPI-CPI, total import and export - total fixed investment - total social consumption).
When you look at the price of a stock, it is affected by many factors. A national policy news, a comment on social media, or even a company announcement can affect the stock price.
So it seems that Bridgewater and the others have analyzed tens of thousands of dimensions, but it is useless. They can only bet everywhere, betting on this, betting on that, and can only hope that the east will not be bright and the west will be bright.
（2）
There are also various stock gods in China. Xu Xiang, the so-called stock god, is still being circulated in Jianghu stories. However, he was arrested and imprisoned in 2015 for violations.
Xu Xiang has a famous name called: Chasing the daily limit death squad. In other words: their way of making money is to chase the daily limit.
As the saying goes: high risk and high return, so chasing the limit is simply licking blood on the edge of a knife. Only those with a high degree of art and courage dare to play in the limelight. Fortunately, in order to maintain market order, the Chinese stock market has set a daily daily limit and a daily limit. As long as a stock's stock price changes by 15% today, it will be blown and trading will be suspended. Therefore, it is not easy to make money and not easy to lose money in stock trading in China.
I won’t tell you why Xu Xiang adopted the investment logic of chasing the daily limit death squad. But what I can tell you is: Xu Xiang is actually a comprehensive investor. He spends at least 12 hours a day on research. Because he is a chasing death squad, he is essentially a volume price trading school. But he also does a lot of research on corporate financial reports. And he also spends a lot of time reading, analyzing, thinking and gaining insight into the country's policy news and remarks on social media.
I also often think about the policy news of those national ministries and commissions that hold real money and real power (such as the central bank, the Ministry of Finance, the State Administration of Taxation, the State-owned Assets Supervision and Administration Commission, the National Development and Reform Commission, the China Securities Regulatory Commission, the Banking and Insurance Regulatory Commission, the Safety Supervision, the Environmental Protection Supervision...), but I am determined Do not read any remarks on social media and self-media.
（3）
In my opinion: The core of business is transaction.
In the eyes of banks, money is a commodity. The money is bought in pieces from ordinary people through savings, and then wholesaled to enterprises at high prices through credit. In the eyes of investors, stocks are commodities. Whether you are doing venture capital in the primary market or buying stocks in the secondary market, you are not the founder of the company, and you have no emotional ties, so whether it is primary or secondary, the essence is to speculate in Chinese stocks. It is easy to understand this principle. Don't speculate in stocks to become a shareholder, or speculate in real estate to become a landlord.
There is a saying in the retail industry: the new tail boom. For the retail industry, a product is a product, and there are new products, popular products, and low-end products.
For the Chinese stock market, it is actually the same.
IPOs were once popular in China. In other words, the price of the original stock must be much lower than the price after listing and trading. Therefore, Chinese stockholders once thought that they could make a steady profit without losing money in new shares. But for new shares, you often have to apply by luck, and you must win the lottery. What’s more, IPO means that once it goes public, sell it quickly when everyone pays attention to it in the week of IPO. In fact, the essence of earning money is the lucky lottery. However, there is a serious inversion of the primary and secondary markets in China's investment now, and the valuation in the primary market is too high, so now everyone is afraid to buy new shares, because they often break as soon as they go public.
There are many kinds of hot styles in China, let me tell you about them one by one.
In recent years, everyone has heard that "Mao" stocks from all walks of life are speculated, that is to say: just like Maotai in wine, only the number one in all walks of life is speculated (is it a bit like the routine of the 50 main constituent stocks of the Shanghai Stock Exchange?) . In the past, in the Chinese stock market, everyone has speculated on the so-called red chip stocks, which are essentially the top stocks of the first echelon, and the "Mao" stocks are directly limited to the first place. The so-called blue-chip stocks that everyone has speculated in the past are essentially second-tier stocks that are growing very fast, and this is also considered a category of hot money.
But hot stocks are not limited to: Mao stocks, red chips, and blue chips. Also, it is quite similar to red chips but has a different evaluation dimension: from the perspective of investors. For example: stocks held by the National Team Fund, stocks held by Beijing Capital. Because Chinese stockholders believe that no matter how much they lose, they can’t lose money from the country (such as social security funds). Chinese stockholders also believe that the capital going north is all foreign money, and they are much more professional in researching stocks, so we have to believe in their professionalism, and we can also drink some soup by following their investment. Under the guidance of this concept, there are still so-called smart investors who only buy stocks of companies controlled by central enterprises (for that reason, no matter how much they lose, they can’t lose to the country).
There is also a category of phenomenon stocks that also belong to the category of hot money, but everyone must observe carefully this type of phenomenon stocks. The Chinese stock market has so-called news almost every day: news broadcasts, policy-planning of various ministries and commissions of the country, Weibo financial big V..., so there will be a lot of so-called theme stocks, such as Xinchuang localization replacement, new energy carbon neutral Harmony, cloud computing, artificial intelligence, digital economy..., the wind blows, and the wave of unrest rises again. Shareholders are like a flock of sheep, one group runs to this type of stock today, and another group runs to that type of stock tomorrow.
However, there are two types of stocks that seem to be explosive stocks, but they are actually low-paying stocks in essence.
One category is small-cap stocks. In fact, small-cap stocks are nothing, but there are often some hot money crocodiles in the Chinese stock market. They are just waiting for the opportunity and their prey. The explosive monster stocks we have seen before are often small-cap stocks, because they need a small capital plate, and the hot money crocodile dealers can collude together to buy black writers and black mouths to talk about this stock intensively, and wait for the market to blow up Almost there, several dealers began to take turns to relay transactions, creating a false impression of being very active to the vast crowd of stockholders. When the stockholders followed suit, the dealers quietly withdrew, cut the leeks and left. This is a typical demon stock-small cap stock play.
There is also a type of final payment stock that is ST stock. Due to the special reasons and special environment of the Chinese stock market, the four major mechanisms of the conventional stock market have not been established in the past 30 years: registration system-market-making system, short-selling system-normal exit system. So there was a period of time when Chinese stockholders were very keen on speculating in ST stocks. The bet was that you could not delist a stock. This stock shell was still valuable and would definitely be successfully reorganized. Once the reorganization was successful and it could be traded again, it would be profitable .
（4）
As I said just now: stocks are also commodities, and they are also a place to buy and sell, and the stock market is also a trading market. The core of buying and selling is nothing more than: whether there is too much noodles or too much water.
If the central mothers of the United States and China are desperately printing money, it will be said that there is too much water. But whether the water flows to the stock market depends on it. American-Merrill Lynch used to invent a revenue cycle routine: Merrill Lynch invests in the clock, buying different assets in different cycles. That's why everyone sees the prices of different assets such as foreign exchange, stocks, bonds, futures, commodities, real estate, gold, digital currency, antique art, etc. one after another.
In addition to the quantitative easing or interest rate hikes of the two central mothers that will affect the amount of funds in the stock market pool, there are also many capital policies that will also affect the water in this pool: such as incentives for investors to invest (such as stamp duty), such as capital for northbound funds. Encouragement will also increase the water in this pool. However, if the southbound funds are encouraged (for example, the channel policy for the southbound funds is relaxed), the water in the pool will decrease instead.
After reading the water, you have to look at the noodles, and the noodles are stocks. If the policy encourages more listings (such as registration system, technology innovation, specialization and special innovation), then there will be too many places, and everyone needs to compete for limited water. In addition, stock companies will also have capital changes (such as reduction or additional issuance, or repurchase), which is actually a competition for water.
（5）
I have also said in the past that when a stock is launched and whether it goes up or down is mainly controlled by the market maker.
However, since my country's stock market is dominated by retail investors and novices, and the policy influence is greater, after the dealers are activated, how far the market can go, how much the market can go up or down, or how much the market can go up or down, is still influenced by the people.
The masses of the people are influenced by human nature (the cycle of greed and fear, fame, fortune, power, money and sex).
