As an ordinary person may not have participated in stock trading so far, and even now many people still have the psychology of talking about stock color change, it seems that stocks are forever bound to losses and tragedies, which intensifies the fear of stocks among the general public. As the saying goes, the best way to eliminate fear is to face it. What is a stock, why does it have a price, why does it go up and down? Only by understanding these basic questions can we have a clear understanding of stocks and the stock market, rather than being immersed in fear.
The first stocks appeared in the Netherlands more than 400 years ago, when Europe was at the beginning of the Industrial Revolution and a large number of companies were in full swing. The first thing to do when an enterprise is established is production. The most important factors of production are labor (workers) and production tools (equipment), and enterprises with these two factors can take the lead in production, and then occupy the market to gain advantages. Slowly the capitalists discovered that as long as there is money, these two problems can be solved, and the money can be turned into wages to pay workers, into industrial capital to buy equipment, as long as there is money to produce.
But the capitalists' money did not come from the wind, when the industrial revolution was still in its infancy, the means of production had not yet been fully converted into profits, overseas markets had not yet been opened, and the capitalists' pockets were stretched. The dire situation led the capitalists to come together, and together they paid for the establishment of companies, the purchase of equipment and the hiring of workers; According to the different proportion of each person's capital contribution, the company is divided into several parts, and each person obtains the corresponding proportion, commonly known as shares, and the certificate of ownership of shares obtained by investors (shareholders) is called stock (equity), which is the birth history of stocks.
This is a stock issued by the East India Company on September 9, 1606, which is also the oldest stock in the world. The stock was worth 150 guilder and was held by Peter Halmenson.
From the history of the birth of the stock, it was initially equivalent to a receipt, a proof of capital contribution by the capitalist. But with the development of trade, stocks have a new feature - dividends. The scale of the company is getting bigger and bigger, and the profits are getting higher and higher, so the capitalists distribute part of the profits to the investors in the form of dividends, and the investors can get the corresponding dividends with the stocks they hold, so that they can really lie down and earn money. This caused the people around them to fall into a deep sour smell, so more and more people participated in the matter of funding the factory. But the tolerance of a market is limited, and the market gradually becomes saturated and no longer needs so many companies; Individual capital is also limited, and they cannot buy a company on their own, so stock exchanges and stock exchanges came into being.
Although the capitalist cannot afford to buy the whole company, he has the money to buy the shares of one of the investors, as long as the investor is willing to sell, then the capitalist can obtain this part of the shares and take over the investors in the future to enjoy dividends; This model quickly became popular, because at that time the Netherlands did the best foreign trade and the company's willingness to expand was the strongest, so an organizational form similar to a stock exchange was spontaneously formed in Amsterdam. Its function is mainly to provide a place for buying and selling shares and a platform for the establishment of new joint-stock companies.
Many people here will think that this stock exchange is the same as the vegetable market we used to gather when we were children. If you have this experience, then congratulations, you basically understand what the stock market is. Yes, the stock exchange is a vegetable market, but the items it buys and sells are not firewood, rice, oil and salt but stocks; And stocks in this market is a commodity role, for people to choose and buy, as long as the price of the buyer and seller agree on the transaction can be completed. You can shout in this market, "Has anyone bought so-and-so shares for 20 yuan a share?" If no one cares, then you can only be forced to reduce the price in order to sell: "Has anyone bought 18 shares of so-and-so?" ”； Of course, as a buyer, you can also enjoy the initiative, and you can also shout "AA shares 10 yuan, will someone sell me?" If no one has been paying attention to you and you really want to buy it, then you have to add money: "AA shares 11 yuan has anyone sold me?" “。
It can be seen that the way of buying and selling stocks is not fundamentally different from that of ordinary commodities, and buying and selling stocks is buying and selling a commodity. It's just that compared with general commodities, stocks have three very special places: one is the rapidity of its price changes, we often hear that the price of a commodity is one price a day, but for stocks, this speed is faster, as fast as one price per second; This change in the price per second is brought about by the second characteristic of stocks, that is, ultra-high liquidity, the funds involved in stock trading are very large, even the new market such as the Chinese stock market now maintains a daily trading volume of trillions; The reason why there is such a large trading volume is based on the third characteristic of stocks - profitability.
As detailed earlier, the original purpose of buying stocks is to lie down and enjoy dividends in the future, so some people will ask, does the company have to pay dividends, why have I never received dividends when I bought shares of a certain company? First of all, according to the provisions of the Company Law, part of the profits of continuously profitable enterprises must be used for dividends; That is to say, it is illegal for a continuously profitable company not to pay dividends; Secondly, most companies are actually very willing to pay dividends, for the majority shareholders account for more shares, it is more difficult to rely on selling stocks to cash out to make profits, dividends are an important source of income for major shareholders, and major shareholders essentially hope to pay dividends; Third, many companies are cyclical, and although they have operated well in the past two years, they may slow down in the next two years due to market saturation.
If this happens, then the profits earned in the first two years may also be used to cover the losses of these two years, so when the company is profitable in the first two years and foresees that the next two years may not be good, it may also choose to quickly take the profits to dividends, in case the time of poor management, the current profits can not escape. It can be seen from this that it is not that the more dividends, the more, but also combined with long-term management to be reliable.
Some friends will also ask, I have been buying a stock for a long time, why have I never received dividends? This can also be found from the previous explanation, dividends come from profits, an enterprise without profits naturally no dividends. And a business has no profit, it may be because of poor management to the sunset; It may also be because a company in the development period needs a lot of funds, profits are used to reproduce or occupy the market, now many startups are adopting a burning model, this should be quite familiar to everyone, such as a certain duoduo, so and so taxi are burning money, they are not currently profitable, but many investors recognize their model, or will choose to buy their shares to become their shareholders.
If there is no profit, there is no dividend, so why buy it? No profit now does not mean no profit in the future, for example, a certain East has lost 11 consecutive years in the stage of building a national logistics and warehousing system, but this is only a necessary cost of the development period, the market recognizes this method and recognizes its company, so it is determined that the future operation of a certain East will be better and better, profits will be more and more, dividends will naturally increase. The previous sentence is very important, we buy general commodities because we think it is now at this price, and the reason why we are willing to buy a stock at the current price is essentially to think that the company will operate better and better in the future, more and more profits, and more and more dividends, then the price of this company will definitely be higher than now, even if I do not enjoy dividends, I can earn profits by selling and selling prices. Although a company can temporarily not pay dividends, if a company clearly says that I will not pay dividends in the future, then its value will instantly return to zero.
The fluctuation of the stock price is essentially an estimate of its future operation, and it is estimated that it will operate better and better in the future, then its stock price will naturally rise; It is estimated that its future operation will become worse and worse, then its stock price will naturally fall. Just because the main body of market participation is people, investment and human nature are very opposed events, this kind of prediction is often mixed with a large number of personal emotions, will infinitely amplify good news, and will be infinitely pessimistic about unfavorable news. This irrational emotion will exacerbate price fluctuations, resulting in multiplying the returns if you choose the right one, and multiplying the returns if you choose the wrong ones.
Of course, choosing the right and wrong is essentially to look at it with a long-term perspective, and the price fluctuations in one or two months or even a week or two are often greater than the company itself, especially in the immature market of A-shares. As a result, two methods of technical analysis (also known as right-hand trading) and value investing (also known as left-hand trading) were born in stock trading strategies. The former is to use market news, buying and selling forces and other data to trade; The latter is based on the logic of the company's own development, based on the company's financial and macroeconomic data and other data. Either method has its own rationale and feasibility, and it's important to keep in mind that the requirements for the stock's expected return, holding period, maximum drawdown, etc. are different. It is very taboo to take the left side of the transaction, but demand the stock according to the holding period and drawdown of the right trade; Or take the right side of the trade but use the holding period and expected return on the left to claim the ticket.
Today's A-share market is very similar to the US stock market 100 years ago, with a huge number of retail investors, few high-quality companies, lack of basic knowledge of shareholders, and various speculative and marginal events. Many people like to compare A shares with each share, in fact, it is not fair, although our market is not perfect, but throughout the global market, basically this is how it comes, the Chinese stock market has only been born for more than 30 years, it is not easy to have today's development. A mature market needs more rational support, the irrationality of the A-share market comes from the number of retail investors, now A-share retail investors and institutions are about 7 to 3, while the US stock market retail investors and institutions are about 2 to 8, individuals and institutions, in the speed of news acquisition, psychological endurance, professional knowledge, and the use of tools are at a huge disadvantage.
At the level of obtaining information: institutions have more or less complex relationships with the management of some listed companies, and the speed of obtaining information is incomparable to retail investors.
In terms of psychological endurance: institutions use the money of shareholders or investors, and if they lose money, they only lose other people's money, and the specific operators certainly do not have so much psychological pressure.
Professional knowledge: Most institutions are graduated from famous schools and related majors, and they are a group of people, and it is natural that professional knowledge is stronger than retail investors.
Tool level: the strategy of the quantitative system institution is richer, after all, it is the result of the labor of many people; Targeted placement of these things is again an institutional priority.
The advantages of institutions are indeed incomparable to retail investors, which is not to say how advanced the strategies and methods of the institution are, nor how powerful the people in the institution are, and even I can say that most of the people in the institution are very average, but the institution has a concentrated resource advantage; I am not exaggerating to say that just taking someone from an analyst at an institution, also with only a computer and a million cash, and managing trading in a closed way for a month, absolutely many retail investors can beat these so-called analysts. There is no way around it, the market is such that we can indeed beat an analyst in the institution, but it is very difficult to break the advantage of the institution.
With the development of the A-share market, the process of de-retail will become faster and faster, and residents will use funds, trusts and other means; Through pensions, social security funds and other means, the state will gradually expand the team of institutions to reduce the number of retail investors. When the number of institutions is increasing and the number of retail investors is getting smaller and smaller, the market situation becomes that institutions hit institutions, rather than institutions hitting retail investors as they are now; At that time, institutions can only choose rationality, choose high-quality companies, reduce speculation and speculation, so that the entire stock market will be in a healthy upward development for a long time, and the dream of ten-year-old bulls will come true.