This article is a screenshot of the interactive Q&A session of the Douyin live broadcast on the evening of October 20: Inflation Rising Liduo Bank. 【Douyin search "Dong Baozhen bargaining investment"】
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Moderator: The central government now has some ideas about real estate, believing that Evergrande is a case, and the case does not affect the healthy development of the entire industry, which is also some of the things that our central government has recently expressed. So like our 2007 bubble, and the 2015 Gem bubble, and now we see this bubble of Baijiu Pharmaceutical, it is the limit, but the undervaluation of bank stocks is also extreme. Why does the bubble have to evolve to the extreme before it bursts, but can there be a bubble in the middle that will burst?
Will human greed and fear evolve to the extreme, or will there be such a phenomenon, such as the bank stocks we are now focusing on, and its valuation will be repaired to bubbles?
Dong Baozhen: First of all, let me talk about it, why can't this bubble stop at the best, it always falls up and falls to death, rises up and rises to death, including now investors asking questions that baijiu medicine has a bubble, you are very bold, you dare to say that baijiu medicine has a bubble, are you not afraid of people beating you?
Just because I said that baijiu medicine has a bubble, the character has declined, and the social evaluation has dropped significantly. The extreme of the bubble is mainly a reaction to the mechanism of human nature, because in the process of evolution, for example, he goes out hunting, if he does hit the prey in a certain place, he will instinctively believe that in the place where the prey has been hit, the prey will still appear, so when he goes hunting again in the future, he will prefer the place where he once hit the prey (waiting for the rabbit).
Why are so many stocks overvalued and overvalued that money is still pouring in? Because man has such an instinct, he always thinks that the place that once made him profitable will make him profit in the future. On the other hand, man also has an instinct, that is, wherever he has been put at risk, he will think that there will be risks in that place in the future, and he will unconditionally refuse to go to that place. The reason for the fall, because the process of falling is equivalent to letting people encounter risks, people will instinctively induce a mechanism, thinking that this fall will fall, so it avoids. Under this mechanism of human nature, he provides the human basis for the extremeization of bubbles.
But on the other hand, the objective facts, the changes in objective fundamentals, are one yin and one yang, and if it is high, it will be low, and if it is low, it will be high. Therefore, human nature has a natural instinct for extremism, and it will not be just right, and it will not stop at the highest good. This is why the ancients asked everyone to stop at the supreme good, because at the level of human nature you will not stop at the supreme good, and stopping at the supreme good is the ability to cultivate.
In addition to human nature, there is also a factor that China's institutional investors need to show their extraordinary investment ability in the extreme bubble.
For example, if there is a fund manager who gets an annual return of 25% in 2020, then he cannot raise funds, because most of the funds will return 100% in 2020, although the return rate of 100%, a rational person cannot believe it, but last year, China's public offering institutions almost created such a high rate of return for you, where did the rate of return come from? Growing from fundamentals? Fundamentals didn't grow much last year, and it came from group manipulation, creating bubbles to pull their net fund value to an annual return of 100%.
I have a customer of mine, who is also my friend, we often talk together, and as soon as he entered the stock market, someone advised him to follow us, and we can make you 15% a month! It is similar to the public offering to earn more than 100% a year. My customer heard the news and immediately left, saying that it is impossible, our family does business, to do the most influential operator of a certain commodity in the country, our annual profit margin is less than 15%, you do nothing in the stock market, 15% in a month is impossible, this is the idea of rational people who have done industry, but who is the fund of the public offering agency sold to?
Sell to those eternal gods Yy DS, that kind of person is not so thinking, he has to cater to this kind of person, the kind of person who buys yy DS to pursue the eternal god, he simply does not know how a fund that doubles the net share price within a year is realized, so because the general fund customers are like this, so those institutions have to pull up, so these institutions also promote extremes.
I myself am an old securities, I was in the Chinese capital market in the early 90s, from my securities qualification time is only 4 years shorter than the Chinese capital market, so I have experienced the era of the bookmaker, the bookmaker is a very negative name, the bookmaker is a very evil role. But I tell you, I experienced the bookmaker era, the valuation of a company is generally 20 times the price-to-earnings ratio, and the general bookmaker pulls to 40 times the price-to-earnings ratio and starts shipping, and will never pull you to 100 times, why? The dealer uses his own money, so he is responsible for his own fate, so he doubles the height and leaves quickly.
The irrationality and bubbles created by bookmakers are much smaller than the institutions are today. In fact, looking back now, it is recommended that Tsinghua University, the Academy of Social Sciences, including the Securities Regulatory Commission, do a study, that is, the bubble degree of some stocks in the era of the bookmaker and the bubble of some tracks now make a comparison, and you will find that the bubble created by the bookmaker is not higher than the current track, which is that the Chinese stock market has fluctuated more in 2015.
Institutions don't make markets more stable and more volatile, why? Institutions do not use their own money, do not trust the fund manager, the fund manager can deceive you to death, do not think that you are the most intelligent successful person, the financial market deceives you, you are no temper, so do not trust the fund manager, especially do not believe the fund manager who has a head and a brain (holding a group to create a bubble, harming others and benefiting themselves).
【Risk Warning】The market is risky, investment needs to be cautious, this article does not constitute investment advice.