Category: Money Tips Date: 2007-04-25
Have a shepherd who kept a flock of sheep to look after, it was puzzled and asked him, raising an appetite so big meal to eat the other dogs several times a shepherd can do exactly what's the use, not as good as it sent to the village rich lords. Shepherd listening to these words, in order to save money, eventually Shepherd sent a man in exchange for three puppies. His overhead is smaller, but the three dogs and wolves fight to protect the sheep, they are a bugger. Shepherd only consider the cost of paying to go, but it does not take into account when the Shepherd and the Wolf when struggling with an enemy three!
The current A-share market blue-chip company and the valuation of the company's underperformance in the chaotic state, solely from the shares difficult to reflect the company's fundamentals, good company and bad company's share price is compressed in a very small price range. While the blue chip stocks to buy 1000 shares of the funds to buy the 2000 shares or 3000 shares of stock underperformance, but from the view of the world's mature markets, and now A-share market this gap can not be too persistent, the future will appear to widen trend of the price space. And a large number of price-earnings ratio and the international standards have been even lower than the mature stock market valuation of the company, its stock price if it is not promotion, is still underestimated operate within range, then wait for a large number of underperformance may be the ultimate fate of loss-making unit is to become a penny stock.
As the A-share market in the stock price at this stage of severe structural adjustment cycle, and in this painful and lengthy adjustment process, even those who can really resist the economic adjustment of the listed companies may also be that people ruthlessly abandoned, the cost may lead to some of the temptation to market participants, the higher the relative price of the stock sell-off and replaced by so-called "oversold cap, lower", but this risk is actually Huanchou bet on speculative stocks, price-earnings ratio is far higher than the market average low significantly reversed the next whether stocks with higher price-earnings ratio to attract incremental funding of the intervention is a highly uncertain unknown, at least in the overall valuation of these stocks began to decline in the trend is to not have defense capabilities.
As the absolute value is relatively low, often a fraction of the price cap, lower down, down on the already very impressive, and it once the market adjustments, such stocks are the most involved in the lack of long-term financial support, the withdrawal of speculative funds, once very rare the selling price will be able to quickly knocked one level, the actual operation more difficult.
Optional I mentioned here the relationship between strong and weak choice, does not mean that the strength of stock price movements, but rather refers to the overall competitiveness of listed companies, the strong and weak relationships. Valuable things, the importance of capital compete for scarce resources; and overestimate the value of things, not only will not attract strategic financial involvement, violence speculation speculators will cash in for a smooth look for any opportunity to escape opportunities.
That shepherd made a wrong action, so that the sheep eventually lost the protection of their practice for the dog to focus only on the immediate small gains but lost because of a wrong decision even greater benefits. Investment in listed companies is also the case, or simply being out of the market to wait and see strategy, or the holders of the future growth potential and have a good defensive Corporation. The company's strong and weak reflected in the share price performance during a period of time may not be obvious, but long-term trends will give the market a clear answer.
