Category: Money tips Release Date: 2006-05-24
There are humorous story: an oil tycoon dead and go to heaven to attend meetings, a discovery had been packed into the conference room, there is no place taking a seat, so he was struck with a loud cry: "The discovery of oil in hell!" This cry does not matter , Paradise of oil tycoons who have to go to hell, and soon, heaven only remaining barons who had. At this time, tycoon thought, everyone ran past, Does hell really the discovery of oil in? As a result, he hastily ran to the hell.
Hell may not have a drop of oil, but go where the suffering is a fact. Think of chase in the stock market sell into greed and fear in the tormented investors, this is the image of the story too, and in fact all people have a herd mentality, because of herd mentality generated by the phenomenon of blind obedience is the "herd effect ", while herding is the most investors can not overcome the psychological phenomenon. Although this story was widely circulated over the interpretation of 1000, but the stock market of the "herd" tragedy but tens of thousands of times to repeat itself in our own. In fact, the herd does not mean a certain loss-making investments, but blind people have lost their herd will surely be the direction, whether you are a professional investor, or an ordinary individual investors.
Market pricing is a rule that will never be broken, it depends more on supply and demand, and people's right to judge the value of the purchased items. Example, usual price of a pound of white vinegar to 2 yuan, in 2004, "SARS" period to coax people to buy when the price of white vinegar in Guangdong and rise to 50 yuan, if the price of white vinegar after the incidents, not only from the end back to square one, and some shops hoarding have to cut prices to sell. The same is true the stock market, supply and demand relations and the uncertainty of stock price volatility amplifies the risk of people to invest in all of us look forward to buying 1 yuan, 50 yuan to sell, "raising group effect" in this price range starting staged. Stock from 1 yuan rose to 10 yuan, one might worry hesitation, once rose to 20 yuan of money, we began frantically to enter, until the Biao stock rose to 50.
2001 dot-com bubble burst, it can be seen clearly after: in the frenzied market atmosphere, is a leader in profitable, most fanatical followers are the victims of the later followers must have forgot to go thought the majority of the stock the true value.
Conformity investment risk also comes from an analyst's recommendation, we note that a very valuable stock has just been discovered, the market does not give its full price, then only one or two analysts recommended shares up was not a lot, once the growing number of analysts recognize its value and begin the recommended time, the stock began to rise sharply, and surged at a certain stage, when all of the analysts have started to recommend, and all the investors are beginning to pay attention to the stock, then re-investment of these hot stocks, their excess returns would be relatively limited. This is the market pricing, when all of the people are beginning to pay attention when a stock is difficult to supply and demand from the market to get the excess profits.
Of course, not all stocks rose no one can make investment and investment is not that we can not herd, the problem is to invest in the stock we are familiar, to understand the value of our investing in stocks the bottom line. Buffett has always stressed that they are familiar with stock investing, do not chase hot markets. In fact, Buffett also has a hand, he familiar with the textile industry, but he rarely intervene. Bull market has come, people are aware of the opportunity to make money, but it is sobering to realize that China's stock market has its own deficiencies in the system does not invest in any stock can make money for himself. In the dazzling rise, the need for more to study the quality of our investing in stocks, the future of the stock market will be high-quality stock bull market, bear market low-quality stocks.
"Herding effect" has been brewing in the stock market over the tragedy of 10 million, and will never end. In any market conditions, however the investment is not hot, we need to adhere to is this: not do blind conformity investment.
