Chen Hao: Why can't retail investors buy at a low price?

Editor's Note:

On Wednesday, the three major indexes collectively opened low, the Shanghai index maintained a narrow range in the morning, and the ChiNext index continued to weaken. In the afternoon, the index oscillated lower, and the ChiNext index fell nearly 3% intraday, and the index recovered near the end of the session. Transactions broke through trillions for the 14th consecutive trading day. As of the close, the Shanghai Index reported 3558.18 points, down 0.33%; the Shenzhen Component Index reported 14207.19 points, down 1.28%; the Chuangxin Index reported 3075.98 points, down 2.17%.

Today's three major indexes fell across the board, just the opposite of yesterday's trend. Now that the pattern of differentiation makes it more difficult to operate the market, how should investors look at and interpret the market? Wolf Shuai Chen Hao's latest views can't be missed!

Chen Hao

I think the big trend in the future will definitely be on the shock disk, but it is extremely difficult to accurately grasp the short-term fluctuations. So the market is now a specially structured bull market, which I classify as a shock slow bull, which I still hope small and medium-sized investors will be convinced. Because of big data statistics, the entire index has so many funds, so many long-term investors, value investors, growth investors have won, but retail investors are keen to trade, but still do not get any benefits.

Market analysis

For the future, although the market is getting bigger and bigger, it is actually getting smaller and smaller, and I personally estimate that the stocks held by institutions will not exceed 500, and the stocks involved in institutions will not exceed 1,000, which is very strict. High-quality stocks are two, in fact, one is that the ROE return on net assets must be good, the passing line is 8%, lower than 8% of the return on net assets, you have to find out what special reasons it has, let you ignore its poor performance and are willing to hold it for life, that is, now you can hold it for three years without asking the price, which is called high quality. At present, when it comes to speculating in stocks, we have to look at the ceiling, where is the ceiling? Some people look up and find that they can't see it, this stock is a good stock; but you can see the ceiling when you look up, and you say that it is now worth three dollars, and this stock is probably high. So there are only about 300 stocks without a ceiling. It's not that there really isn't, it's that you can't see now, which means it's still far from the ceiling.

However, my advice to everyone is called "scattered investment", on what you want to think someone said is reasonable, you can point, but do not concentrate on configuration. Because I see some retail investors' habit of speculating in stocks, as soon as someone says which stock is good, he sells everything, and he bets on that at once. No matter how famous people make a single suggestion are unreliable, such as consumption, there are always people who tell you how much Maotai wine bought many years ago is now issued... You have the ability to put all your funds on Maotai now, in fact, it is difficult to withstand its fluctuations, its operating policies are slightly adjusted, and the financial statements affected are not only tens of billions and hundreds of billions of problems.

Institutional analysis

Now everyone can see clearly that institutions cannot cut leeks, cannot choose the time, cannot change tracks, and can only go black in one way, because the liquidity of the market on any track is not enough to support the shipment of a blockbuster fund manager. You see now, the fund manager who manages the most money in our hands has hundreds of billions of dollars per person, and the daily transaction volume on a certain track has to be hundreds of millions, and he is not supported at all. So the institution's stock is solidified for a long time, the result of the solidification is that they are all sky-high control stocks, the transaction is relatively light, just like Moutai is a look, there will always be a few grades of net value up at each stage, everyone looks at the fund, we don't look at how much money the fund makes, it is to see how much the net value has gone up, all holders are very happy, because they are playing this game.

But at the same time, institutions have their own views on companies, which means that when we recommend a fund, we must believe that its top ten heavy stocks are at a high level, but they can't see the ceiling. Once you see the ceiling, it's the agency stampede, and the stock is gone. But the institution is decentralized, you see it has gained 100% in the past 12 months, which is equivalent to losing a stock, then it is only 1%? Institutions are not afraid of this.

Policy analysis

The capital market is very cruel, you win others at least do not win or even lose. So you always have to think about how the majority thinks, and you have to find a solution that has nothing to do with the majority. When everyone knows they should buy at a low price, 5% of them must be more aggressive. For example, if you look at the past K-line chart, I think that the decline of about 12% of the index I bought, can comfortably do a 12% short difference, the result is that someone is more anxious, just fell 3%, he started, there is a fall of 4% to start, there is a fall of 5% to start... The result has not yet fallen to 6%, the supply and demand relationship has been turned over, the result will cause the upward breakthrough of the last wave of retracement to retrace a little. What does the drawn curve look like? It is to rush up and down first, then rush up, quietly fall back, go up and go, what is this called? This is called the technical ascending triangle because everyone knows that everyone should buy at a low price, so it cannot be low.

Then some people say, if you look at a bull market from 3,000 points to 6,000 points, the index has only doubled, what if you want to earn twice? If I make a few short differences in the middle, earn 30% and go, then retrace 15% and come back; earn another 30%, and then retrace 15% back... If you do this all the way well, the result can be to double the index to a timesaly and a half, twice! The ideal is very full, the reality is very bone. Then ask the question, is the bull market higher than the next? If your fingers are always selling keys, can you escape to the top? It must be too late.

We also have a theorem called right-hand trading is not feasible, you say I see the top signs of the market I go again, I ship small good turn. Why can't you go? Because the individual stocks held by retail investors are generally ahead of the right signal of the index and begin to fall deeply; when you feel that the index is not working, the individual stocks are finished, at this time everyone does not want to escape the problem, everyone thinks of waiting for the return of the capital and then shipping, so this kind of thing is everywhere, not that you fantasize about a way to make money, you can achieve it. I'm telling you bitterly, don't be fanciful.