Text// Tianyu Duge
"The stock market is a barometer of the economy", this sentence always seems to be difficult to verify in the A-share market. Over the years, despite the continuous rapid growth of China's economy, the A-share market has been unable to escape the curse of 3,000 points, and investors' expectations for a bull market always seem to be empty. In the morning of April 16, a terrifying scene was staged again: more than 5,000 stocks fell, many stocks fell hard, and even some indices plummeted by more than 10% at one point. This can't help but make people wonder, why is the A-share market caught in such an endless cycle?
The introduction of the new "National Nine Articles" was regarded by some investors as the main culprit that triggered the crash. However, we must be soberly aware that the new "Nine Measures" are not the culprit of causing market turmoil, but rather reveal the long-standing problem of speculation and speculation in the A-share market, and are a powerful reversal of market chaos.
For a long time, the A-share market has been plagued by speculation, and junk stocks, problem stocks, poor performance stocks, and high-valuation stocks have become popular and have become hot spots for market speculation. These stocks often lack actual performance support, but they are hyped up with various concepts and themes, attracting a large influx of speculative funds. However, this short-sighted speculation not only seriously distorts the market valuation system, but also harms the long-term interests of investors.
In such a market environment, high-quality stocks are often buried, while low-quality stocks are rampant. This phenomenon of "bad stocks driving out good stocks" has seriously hindered the healthy development of the A-share market. When the market is enveloped in speculation, investors lose focus on fundamentals and instead pursue short-term hype gains. The prevalence of this speculative mentality has made the A-share market hovering around 3,000 points for a long time, making it difficult to break through.
The promulgation of the new "Nine Articles" is a powerful blow to this kind of speculation and speculation. It emphasizes the rectification of market chaos and strengthens the supervision and punishment of violations. This is undoubtedly a warning and blow to investors who are keen to speculate on junk stocks and problem stocks. However, this has also caused panic and dissatisfaction among some investors, who have wrongly blamed the decline in the market on the new "National Nine Articles".
For a long time, investors were given the impression that China's A-share market was volatile, speculative, and often hovered around 3,000 points. Despite China's continued rapid economic growth, the stock market has failed to form a long-term bull market to match. The reasons behind this are complex and varied, but it is certain that factors such as the market's structural problems, investor behavior, and the policy environment all play an important role.
There are a large number of small-cap and micro-cap stocks in the A-share market, which tend to have small market capitalizations, poor liquidity, and are susceptible to manipulation and speculation. Because of these stocks, there is a strong speculative atmosphere in the market, and many investors prefer to profit from short-term trading rather than holding high-quality stocks for the long term. This short-term behavior leads to increased market volatility and makes it difficult to form a stable upward trend.
The immaturity of investor behavior is also an important factor that makes it difficult for the A-share market to form a bull market. Many retail investors lack professional investment knowledge and risk awareness, and are easily affected by market sentiment, chasing up and down, which exacerbates market volatility. At the same time, some institutional investors also pursue short-term profits, and obtain profits through improper means such as manipulating stock prices and disseminating false information, which undermines the fairness and health of the market.
For a long time, the A-share market has been regarded by many investors as a casino, rather than an investment venue. Stir-fry concepts, stir-fry themes, and stir-fry small stir-fry differences have become the main theme of the market. The promulgation of the new "Nine Articles" is undoubtedly a powerful blow to this kind of speculation. However, such policy adjustments have also triggered wild market volatility, especially for small-cap and micro-cap stocks that rely on speculation to survive, which is undoubtedly a fatal blow.
The quality of listed companies in the A-share market is uneven. The market is flooded with junk stocks, problem stocks, counterfeit stocks, and underperforming stocks. These companies often use various means to maintain their stock prices, even at the expense of financial fraud to attract investors. When the market environment changes, such as the implementation of the new "National Nine Measures", the stock prices of these companies will fall off a cliff. This phenomenon not only harms the interests of investors, but also seriously distorts the value discovery function of the market.
High valuations have always been a major problem in the A-share market. Many companies' share prices are deeply disconnected from their fundamentals, with ridiculously high price-to-earnings ratios. In this case, the rise in the stock price is more based on speculation than a real increase in the company's performance. Once the market sentiment changes, high-valued stocks become the target of sell-offs, triggering significant market volatility.
Although the regulatory authorities have stepped up their efforts to crack down on market violations in recent years, there are still criminals who defy the wind and commit crimes, undermining the fairness and transparency of the market. This not only affects investor confidence, but also hinders the healthy development of the market.
If we continue to indulge in speculation, the A-share market will never be able to get out of the 3,000-point predicament. Because speculation will only plunge the market into short-term revelry and long-term malaise, and will not achieve real value discovery and long-term growth. Only when we abandon the speculative mindset and focus on fundamentals and long-term value can we push the A-share market towards a real bull market.
Stock market crashes are not the norm in the market, but the result of market imbalances and excessive speculation. Only by strengthening supervision, improving systems, and improving market transparency can we effectively prevent and resolve the risk of stock market crashes. The promulgation of the new "Nine Articles" is precisely aimed at strengthening market supervision and standardizing market order, and preventing and defusing market risks.
We should rationally look at the decline of the market and the introduction of the new "National Nine Articles". The decline of the market is the need for the market to adjust itself, and the new "National Nine Articles" is a powerful measure to promote the healthy development of the market. We should abandon the speculative mentality, focus on fundamentals and long-term value, and face market volatility and challenges with a rational attitude.
The root cause of the long-term hovering of the A-share market at 3,000 points, the lack of a bull market and the frequent stock market crashes is the speculation and chaos in the market. The promulgation of the new "Nine Articles" is a powerful response to and rectification of this problem. We should take this opportunity to promote the return of the market to rationality, strengthen supervision and regulate market order, improve the quality and ability of investors, and jointly promote the healthy development of the A-share market. Only in this way can we really get out of the 3000-point dilemma and usher in a real bull market and prosperity.