Category: Money tips Release Date: 2006-04-28
Since the prevalence in the value investment philosophy, how to find undervalued stocks to become the main investment strategies of institutional investors. On the other hand in the market valuation of behavior was also a bargaining chip with the distribution of investment fashion, profitability and international valuation of the relationship between the state and others have linked to only from the surface of high and low price-earnings ratio may then proceed to make the wrong conclusions.
We look at Yangzi Petrochemical is a classic cyclical stock, the current market price-earnings ratio is almost the lowest level, even in 2000 and 2002 price-earnings ratio is also near the lowest point in more than 10 times, while the current dynamic price-earnings ratio only five times, apparently a relatively low price-earnings ratio is not a suitable indicator to buy. Counter-cyclical stocks often give the corresponding valuation premium, but how much is appropriate premium rate is more of a market experience and identity, but not from the fundamentals to give a reasonable explanation. Has been historically low price-earnings ratio of Guizhou Moutai level is more than 10 times, and is currently at 25 times. This is of course related to contraction in the economy of the special market environment, but five times and 25 times the difference there is always puzzling, however, recognized the difference between the market precisely. Obviously, if the viability of Moutai to maintain stability, and the current economic environment has not changed, then the valuation differences are likely to continue. But the fact is able to maintain stable operation advantages of the stock are not many, and the corresponding valuation premium will not be able to maintain, so the market for high price-earnings ratio stocks are usually very cautious. (Tape in place short-term adjustment will seize the opportunity for short-term rebound! Edit YXGB, mobile sent to 2.9116 million and China Unicom sent to 9.9016 million, access to our selection of short-term bounce for your chance to share! 0.3 yuan each, 20 seconds is given reply. Moving from Your thumb bar!)
Understanding of small-cap stocks have also experienced a relapse poor stability operations, liquidity is not strong, the lack of corporate governance factors such as exclusion of small-cap stocks was the reason for the fund. But the passage of time, a single market behavior so that the many advantages of large-cap stocks gradually losing, when small-cap stocks in the natural field of vision into the fund. However, this strategic shift to first overcome a significant obstacle to the valuation, that valuation is generally high in small-cap stocks, such as Baoji Titanium, Ginza shares Xingxincailiao, aerospace and electrical appliances in a strong small-cap stocks in June of this year Quotes starts the dynamic price-earnings ratio were more than 10 times, which is bound to trigger a sensitive issue: 5 times and 10 times that which is more worthwhile? The fact that the low price-earnings ratio does not necessarily reliable, high price-earnings ratio may not not have a chance, even with a price-earnings ratio is expected to compare as well. This seems to be a valuation of Rubik's Cube, but the valuation is indeed is a matter of art and learning, with cultural and academic colors, simply relying on the figures do not fully explain. From a psychological and cultural point of view, no matter how good the investment objectives, such as over-respected, there will be "Shenmeipilao it." Once this point of view the formation of a consensus in the market, the investment direction of the wind will be reversed, the popular varieties will be subsequently changed.
