Category: Money tips Release Date: 2006-11-16
Recently, the tape straight round Quotes create a new high, but in the Stock Quotes hot at the same time, the risk of individual stocks also been seen, such as the G Fengyuan, Kaikai Industry Company, etc. out of the opposite trend with the broader market. This tells us that, no matter how Quotes, we can not ignore the opportunities as well as the risks can not turn a blind eye.
Opportunities and risks are relative
At any time in any market, the biggest investment opportunities and the largest investment risk must be the change from the standard of value! The same vegetables, in the spring, summer autumn and winter there are different prices at different times because of its value is not reflected as a measure of its values are not the same, the price will naturally be different. More important is that the value of vegetables and meat is not the same value, so it corresponds to the market price is also different.
An example of this occurred and also reflected in the stock market. For example, the same auto stocks in 2004, the industry's most boom, people give it a valuation standard can reach about 25 times earnings, while in 2005, the industry boom-degree drop, people give it a price-earnings ratio valuation standards for what the child down to about 10 times. So far, only 15 times. Such examples are the same has happened in the steel and petrochemical shares where shares.
Standard of value change is the key
Why changes in values brought to the Quotes is the biggest investment opportunities and risks it? Obviously, the same stock in performance did not change, circumstances, the standard price-earnings ratio reduced from 25 times to 10 times, which means stock prices should be fallen 60%; the other hand, if a standard valuation of stocks from 10 fold increase to 20 times price-earnings ratio price-earnings ratio, it means that only upside for the stock will reach 100%.
The most typical case is G Tianwei, the unit has more than 60% of the main income is from the power station equipment, therefore, from 2003 to mid-2005 two and a half years, it is reasonable to compare the type of power station equipment, valuation standards, give it about 20 times earnings positioning; but the second half of 2005, the company involved in solar energy industry, according to the international market valuation standards, valuation standards of its people are 20 times the earnings from the rapid increase to a 45 ~ 60 times, thus opening up the stock more than 300% upside.
People's values will increase over time, as well as social development and change, so whenever the new mainstream Quotes formed when the hot spot must be a hot spot corresponding to the mainstream industry or company changes, even more importantly, the people's understanding and evaluation of its standards have changed! (A Qi)
