Category: Money Tips Date: 2007-01-28
Abstract: With the exponential the beginning of the bull market and structural adjustment, most of investors caught in the cycle of making indices, but lose money. In this context, is still digging performance, high-growth industries inherited from the top-down stock selection method will no longer suitable for the current market environment, particularly in the pre-institutional Awkwardness of Awkwardness of Fund faces a greater risk ......
With the exponential bull market and structural adjustment, most of investors into the index does not make money or lose money making the cycle, we believe that this is because the current stage of the market in which there is not enough and the lack of a clear understanding of corresponding changes in thinking caused by stock picking The. In such a structural adjustment process you want to survive well, first of all should know what stock picking thought desirable to avoid high-risk blocks, which is the focus of this research. The next article, we will focus on stock selection ideas which can be better suited to the future potential of markets to help investors find hot plate.
In fact, the market entry into the exponential phase of the bull market means that market transition has already begun, a small number of heavyweight power index and the majority of the top stocks in the index under the cover of continuous reduction of the stock picking ability of market participants, higher demands. In this context, is still inherited in the first half performance, high-growth industry, mining top-down stock selection method will no longer suitable for the current market environment, particularly in the pre-institutional Awkwardness of Awkwardness of Fund faces a greater risk.
1, the market turns requires a new method suited to stock picking
In our previous article, proposed that the bull market began to enter the exponential type, the majority of shares under the structural adjustment began to highlight the risk of individual stocks. At this stage, we need to change the stock-picking ideas, to adapt to the current market environment.
In fact, the recent body led decliners Awkwardness can be seen, pre-highly favored by the mainstream market, the risk has become a high incidence of plate, which means money to do the mainstream thinking began to change disc. If investors do not fully adapt to the market this change, to change their stock-picking mind, it is likely the next phase of the market, discount sand Shen Ji. In fact, ICBC's pre-IPO market, the structure in place to run quietly changing the consumer before the highly sought after upgrading the stock one after another silence, while the bank represented by blue-chip part of the broader market is starting to be brisk again, this trend is currently in the further evolution.
Second, under the current stage of the two types of undesirable stock selection method
1, from the top-down stock picking high-growth industries
We first make it clear it is not that this stock-picking approach is incorrect, on the contrary, high-growth industries often contain large Niugu the cradle, but the current market environment would be inappropriate to use this stock-picking approach.
First, mainly because most of the high-growth industries have been fully tapped. Consumer stocks, such as upgrading the industry has always been considered to be high-growth industries, yet its overdraft in the general valuation of the performance of the next one to two years of room for growth; Secondly, in the macro-control under pressure from slowing economic growth, so the growth rate of all industries also will generally slow down growth in the larger environment determine industry being no longer able to become the market's major investment bright spot by looking for high-growth industries and a top-down stock picking more difficult on the rise.
Based on the above two points, we believe that the starting high-growth industries by finding a top-down stock picking approach, even though it can become very popular in the first half, but it has been unable to meet current and future mid-market environment, investors should temporarily abandon the election stock method.
Of course, the growth of localized hot spots may still occur, such as smooth in the winter if the 3G licensing in the early Ming, then the 3G device will fully benefit from the stocks and face a high growth opportunities, but this, after all, is not prevalent cases of .
2, institutional holdings of stocks of high concentration
Generally favored by the main body doubly Awkwardness is often a hot chase the market, fully subject to the attention of investors, investors are flocking to hot spots. However, we believe that at this stage Awkwardness of some institutions, especially Awkwardness of Fund often be a high-risk blocks, investors should focus on avoidance, the reason for saying this is because the following reasons:
First of all positions currently in the agency adjusted the time period, many statistics show that agencies are often Awkwardness of funds will be necessary to focus on the future institutional transfer warehouse stocks, that is, the mainstream capital ship object, it faces downward pressure can be like conceivable.
Secondly, some of Awkwardness is often held by numerous agencies where there is little focus on other investors, especially Awkwardness of Fund. Such institutional investors Kongpan Though the circumstances conducive to maintaining stocks rise, but once you join one of the participating agencies of such stocks to ship, often at the same time bring the other agencies involved to ship the chain reaction, or even lead to avalanche-like down. This will have an enormous destructive price fell decline is also very frightening, to the participating investors substantial losses.
Therefore, we think that the existing institutions, especially some of the gains Awkwardness great body Awkwardness will face greater investment risk, investors should remain fully alert.
The other is noteworthy that the mainstream funds for their own interests, probably through a variety of ways to adjust the positions of its services, such as the full utilization of the media and propaganda, so investors want to comment on the current market better distinguish capacity.
Overall, in the current market environment, you want to survive, first of all should adjust its stock-picking ideas, be able to circumvent the high-risk section to avoid the loss is the primary task of survival, followed by changes in stock selection ideas to find out the future of the mainstream funds will be involved in the potential of hot. In this regard, we will take the next article what kind of stock-picking approach can adapt to future market environment for further study.
