Category: Money tips Release Date: 2006-12-17
We have continuously pointed out that the mad speculation, especially fried junk on the price of stocks on the price of risky. The current rise in junk stocks can only be speculation as to the prices in the name of the oversold bounce. Today, ST stocks overall lower limit is a manifestation of the risks. Speculation on the price of the first phase has basically been completed. The future and ultimately, price speculation, but what kind of stock speculation, hype high, or playing the stock market should take the value of the investment-based. The right price is completed, the value of the company is to determine the price of the underlying factors, but also speculation target.
According to internationally accepted standards of average return of funds is a national 20-year Treasury rate. Issued in China this year, 20-year Treasury rate is 4.11%. In other words, when the listed company's earnings and stock price must be higher than 4.11% higher than average, the investment is cost-effective. To reconsider the stock market investment, risk factors, false statements of listed companies in China are more factors, this proportion should go to 5% of it is appropriate. We know that price-earnings ratio is the price-earnings ratio, therefore, reasonable price-earnings ratio should be less than 100 / 5 = 20 times. The light of China's 20-year bond interest rates, investment risks and characteristics of China's listed companies, down from 20 times earnings is appropriate.
Are now engaged in stock reform, the basic Major Holders are non-tradable shares, the non-tradable shares with the right. This included the right to market a speculation Jiugei theme, but not blind speculation, can not target fried. Based on the above analysis, no matter how much Major Holders while stock after the price-earnings ratio can not be more than 20 times. If more than 20 times, it may be overdone hype.
The above analysis is not considered the company's growth in nature. If we consider growth, the current growth in small-cap companies is better, slightly more than 20 times to be reasonable; but with no growth or even declining profitability of the company and its city should have a lower surplus City Cai Dui. Major Holders of these shares even more and will not escape the decline and even the risk of delisting. Such as chlor-alkali chemical industry, two textile machinery, China's textile machinery such as a sunset industry, the long-term small profits or even losses, stocks, that is, 10 to send 20 of its investment value while stocks did not post. This is simply the stock skyrocketing Bo silly games, like the recent speculation as Baoshan Iron and Steel warrants, and the prices will be short-lived to participate in the final outcome of speculation is often stuck with or a dagger deep flesh. As for the ST shares at greater risk, more rest is history.
