Category: Money tips Release Date: 2006-10-03
Panic when the group dropped the "lemming effect" occurred, while the investment opportunities are time comes
Gone against the tide of this wave of investment law allows you enough to make a
Editor's Note
After the last round of crash Quotes After that even the most optimistic brokers researchers, but also hard to believe that the stock market could be so quickly to erase the scars of post-crash: Shen Chengzhi 5 after 30 years of the five trading days up to down 20.87 %. However, later pulling 7 Yang Jing Lian, to short squeeze way to reaching record highs. Yesterday to close at 13811 points, compared to May 30 there are 2.64% gain.
Open daily Shen Chengzhi K-line diagram, a typical V-shaped reversal of the wonderful people lamented bull market. In adjusting the market, whether institutional or individual investors, most believe the Shenzhen and Shanghai stock markets and long-term bull market situation remains unchanged. However, what is the reason they are most panic when the selling in the hands of stocks? This article attempts to decode for you.
Reporter Xiong Yuan-jun
Suddenly there is no buyer on the market
Two weeks prior to the Shenzhen and Shanghai stock markets suffered a panic inside the bull market: from May 30 to June 5, many ways to sell the stock to daily limit. Among them, the British conglomerate with five consecutive daily limit, to become a listed company in Shenzhen, "diving champion." Its stock price from the 17.95 yuan, has been dropped to 10.63 yuan, short-term drop of 40.78%.
Fundamentals of individual stocks did not occur in the case of mutation, simply because the policy to curb excessive speculation in the signal, hundreds of stocks in large groups like the United Kingdom, as a sudden the market was big sell-off.
From the May 30 start of the fall, Shanghai and Shenzhen cities lower limit of the data is panic: From the May 30 start of the three trading days, the benchmark Shanghai Composite Index lower limit the number of stock companies, were about 900, 280, and 800. By last Monday, although the three major securities newspaper editorials, respectively, for the stamp duty to clarify the stock market rise, but the cities are still over 900 stocks lower limit, only 31 stocks rose.
Lower limit, usually means the disappearance of liquidity of individual stocks. What kind of fear, so that large areas of the stock market, a sudden lack of buyers do?
"The sudden introduction of initiatives to raise the stamp, how much was unexpected, so heated reaction. In the emotional state, it is difficult to 1:00 rational treatment, so we also have a serious oversold the stock market." Shenyin Equity Research The principal analyst Gui Haoming that the crash began when the moment we are unable to adapt, many investors fled recklessly Duo Lu, so that the entire market has shown a panic, to form a continuous lower limit of the stock market.
Rome was not built in a day, nor is it destroyed in one day is suddenly upon the hook. From the May 30 start of the stock market crash and the surface is the result of a policy raising the stamp duty, but more because of the excessive increase in valuation, structural foam rapid expansion of short-term market profits are too many chips needed carried out through the shock Huanchou.
Is widely believed that a single month in the Shanghai and Shenzhen stock market turnover more than 100% of the background, management raised the stamp duty, to adopt appropriate policies curb excessive speculation is correct, but the adjustment, it is the result of this major adjustment of the lead fire Sok.
Left the market, a very narrow channel
It is learned that for every one big bull market is always larger wealth effect, and to attract a large number of new investors enter the market. Data show that the first 4 months of this year, the number of new accounts were as high as 3.42 million, 1.27 million, 4.01 million, 6.7 million! The first four months of this year alone on the additional 15.4 million is the number of accounts opened last year added more than 3 times. In the May 28, the National New A-share accounts hit a new high of 385.3 thousand, Shanghai and Shenzhen stock markets reached 100.2736 million total accounts.
A sudden surge of investors, resulting in too much money chasing too many stocks, investment opportunities in a sudden decrease. This allows the investment community think of the famous lemming phenomenon: the dramatic increase in the Norwegian lemming once every ten years and had to travel through the large-scale migrations to foraging, but the outcomes are always the way of collective suicide Touhai ended.
Animal studies suggest that academia, driven lemmings move forward, not the desire to die, but panic. Including hunger, panic, and the disoriented panic.
Quotes in the early fall, the Fund Awkwardness plays down of the June 4 weighed on the market plunge, giving the bull tried to counterattack the final blow. Such as Sinopec, China Vanke, etc. are all lying in the daily limit on the heavyweight. This will undoubtedly enlarge the market panic, for a number of new shareholders an even greater threat.
"Investors in the fourth or even fifth daily limit on the ship should be agitated in the last sell-off." Shenzhen, a private equity fund Trader Otto bluntly, after this fall, retail investors in a state of fear, would choose to leave the market, turned to buy the fund. According to China Securities Depository and Clearing Corporation statistics show that in May 30 when the benchmark Shanghai Composite Index plunged 6.5%, the fund added accounts amount to 76.5 thousand, much higher than the previous day to 4.8 million.
When the market was driven by the dream of new investors to make money, suddenly confronted with even the old and experienced investors rarely fall market, their mentality would happen then? States Securities analyst Zhang Xiang believed that the greed of the rapid shift from the pre-panic. In the role of herding, the panic sell-off will be a large number of gush. If the funding from the stocks afloat for money, loans or mortgage, then the motivation to sell will be more intense. At the same time, the market will give rise to the Christian Democrats dropped a large-scale redemptions, which means that the fund is also facing Awkwardness greater downward pressure on the market is also under the action of negative feedback effects of further decline.
This rose to switch from the slump of the upheaval seems to have verified Morgan Stanley economist Andy Xie, former chief Asia-Pacific region had the description: "left the market, the channel will be very narrow, the market there may be a crash situation."
The most panic when the most profitable
Yesterday, Shen Chengzhi another new high, the Shanghai Composite stone's throw away from a new high. About You Sancheng stock has hit since May 29 high. Now investors are most confusing is that in the frenzied sell-off earlier this month, the behavior is not rational behavior in the end?
On Wall Street, there is a classic case of investment: the summer of 1998, the U.S. Midwest drought, resulting in corn and soybean futures prices soared. However, in the Chicago Futures Exchange the location of a sudden it began to rain, resulting in corn and soybean prices fell.
So absurd decline seems to reflect the market reaction to the irrational and excessive. However, the Nobel laureate Merton Miller, financial experts believe that in a rational market, the relevant objective environment, even a minor change, but also may lead to a major revision of the pricing benchmark. Because once the end of prolonged drought to happen, even a minor rain, may also make the market to weather changes and the supply of corn forecast a rapid and profound changes.
Similarly, in the current round of fall Quotes ago, the Shanghai and Shenzhen stock market rose has lasted 24 months, the Shanghai Composite up 334% cumulative gain, according to the calculation of the average flow of capital stock up to 60 times price-earnings ratio. Moreover, from 3000 points to 4,000 points in just less than 50 business days. In the fall before, and frequently appears more than 8% of the daily turnover and the intraday volatility, indicating investors under the fragile state of mind.
From the behavioral finance perspective, the individual rational choice, once passed into collective action, and sometimes they become "collective fallacy." Industry experts believe that the stock market crash, the individual most rational choice should be clear light stock, waiting to low which saved to. However, once everyone is doing so, the market is no disk access. However, at least short-term investment opportunities and therefore elected.
"The best investment opportunities, is when the panic withdrawal of all time." This is Wall Street, the "father of global investment," Templeton reputation of the investment money-making magic master. In 1949, the Nikkei average fell 179 points, he bought a large number of Japanese stocks. However, more than 20,000 points, he would think that the market bubble is too large departure clearance. Later, the Nikkei rose to 38957 points, the highest in 1989, Templeton did not get to enjoy this mouth while the "big fat", but also to avoid a big bear market. In 2003, the Nikkei fell to a maximum of 7603 points.
Similarly, many individual stocks in the last week, when the daily limit of four consecutive Zachu dare to approach investors, at least for the short term is a winner. Such adverse economic investment law has once again proved that stock-market rule: the long term, a person to make money, two tie seven losses. Perhaps, as institutional investors, Goldman Sachs Group, founder Menschel "market, mobs and riots," a book put it, "groups of the more positive things, the more likely an error. If all is correct, then the stock market, it has not profit to be made. "
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Lemming effect
It is reported that the number of Norwegian lemmings, every 10 years will surge in two three times, they were forced to prowl. However, Norway's long coastline, often become lemmings move forward a natural barrier. They were forced to build-up in groups to form a long advance team. Herd, so they have become lemmings of instinctive behavior.
The United States "share God" Buffett will fund manager described as "Lemmings," because they are a serious emotional groups, read the same magazines declarations, I believe that with a number of "experts" predicted. They are more concerned about is the "other funds are doing." Buffett has also created a new term to the fund - "Group unavoidable crazy." That he knows something wrong, but because other people are doing themselves forced to follow suit.
