Category: Money Tips Date: 2006-04-27
For the short-term investors, stocks are most concerned about the amount of the general price situation and the technical indicators, often depending on field of capital flows, the sale of strength to decide when to stop. In fact, continuous short-term fluctuations in individual stocks, the market often provide investors with a fundamental departure from the mutation and the short-term stock price arbitrage opportunities, if used cleverly, then the chance is quite big profits, while the risk for are often lower than the action based on technical indicators.
We may wish to Jinan Department Store as an example to skip for analysis. The integrity of the company by the economic downturn affected business sectors, business proudly Victoria Caine, but the Unit in 2000 was a big Niugu, or extremely large, in May, the company announced the restructuring of China entered the construction of electronic messages. However, the company's restructuring of twists and turns, due to economic construction of China, entered the 100 workers to take the attitude of rejection led to a substantial restructuring has been impossible. Uncertainties in the fundamentals and the broad market, under the combined effect of mid-level adjustments, the unit all the way down, the minimum below 10 yuan. At this point, investors are familiar with fundamentals can be found, if the reorganization is successful, the Chinese built electronic power and its industry position to see its stock a large extent, been underestimated. At this point price response to the fundamentals of uncertainty is a risk "premium." If the elimination of fundamental uncertainty, the price return of the space will be enormous. Sure enough, the situation took place in 2001, the company released the news of China to build a smooth White, while the low-income unit the previous day at 9.61 yuan, the message obviously has not digested by the market ahead of schedule. On the secondary market in terms of, and this was a great arbitrage opportunity for investors to intervene if the first time, natural access to risk-free or low-risk profits.
This phenomenon has occurred in the PT-kai on the ground (I am not here to judge the prospects for reorganization of PT shares and to encourage investment in such stocks, for example, only use). The Unit continues to lose money by PT, a series of restructuring will not ring true under the influence of negative factors, stock prices fell continuously. However, careful investors can find that the total capital stock and the flow of capital are relatively small, but well-developed province of Zhejiang in the local economy, restructuring is relatively easy for government involvement in insurance licenses are also more likely. At this point the sharp decline in the stock market reaction to the uncertainty of future concerns. June 13, the company announcement of new restructuring plan, the plan clearly reflects the intention of the local government injection of quality assets. The bad news turned positive face a critical moment for the short-term investors with the involvement of a very rare opportunity to resume trading in the next, the stock despite the general trend of Shenfudiaozheng and continuous daily limit.
Dramatic changes in the use of fundamentals, when engaged in short-term arbitrage, there are several aspects of the problem must pay attention to:
First of all, require investors who engage in such arbitrage and restructuring of the company's fundamentals change has in-depth analysis and tracking, while grasping the right price positioning more accurate. Only the company keep track of changes in fundamentals in order to grasp the timing of mutation. Similarly, only the fundamental changes in the expected stock price after a more accurate positioning can be more accurately measure risk, the arbitrage process in order to become a real "risk-free" or low risk.
Second, the bad news the greater the good news with the announcement of the contrast the greater the less risk involved. If the stock had pre-made over-reaction to bad news, its profit space will be.
Finally, the involvement of such stocks should be very decisive. As investors in the same starting point of an information to make decisions and therefore I only the most decisive investors could seize such opportunities. The same time, holding time, in line with technological trends, the general partial short-term good. Because the company's fundamentals mutation is only on the elimination of uncertainty, the complete change take a long time, during which occur the larger repeated. Once the stock price reaction to the information is completed, is not much room for growth. In summary, uncertainty is a risk on behalf of the name, a huge turning point for the uncertainty is often best to eliminate the short-term arbitrage gold point.
