Bread In Stock Market At This Stage

In 1960s, Eugene Fama, a financial economist at University of Chicago, put forward the famous effective market hypothesis theory.

The effective market hypothesis theory holds that in efficient markets, investors earn only the normal part of their profits which are matched by their risks, and there will not be excess returns with high risk compensation.

Later, according to the effective market hypothesis and empirical research, the academia divided the stock market into three types, the weak effective market, the semi strong effective market and the strong effective market.

I think the Chinese stock market is a semi strong effective market, that is, the current price of the securities fully reflects all public information, and the future price changes depend on the new public information. Only those who use insider information can get abnormal excess returns.

This is determined by the quality of Chinese shareholders and the current situation of the stock market.

On the one hand, China's stock market has developed for 32 years, and has trained a large number of experienced investors. It is reasonable to believe that the competition between them can drive stock prices to reflect the information fully and timely.

On the other hand, China's stock market is incomplete in mechanism and information disclosure is not smooth. The state-owned enterprises with government background have information superiority than other investment institutions. The insiders in the enterprise have information superiority than the outside ones. The executives have information superiority than the general employees. Important information is concealed or delayed released, and it does not reach all investors at the same speed, which provides space for insider trading.

The nature of the market determines that those who master the inside information will win the most wealth.

Do you want to know how the insider information is pformed into wealth? If the birth of a good news is likened to a stone into the lake, the investor with the most information superiority is in the center of the circle.

He first knew the news, and when he finished the layout at low price in the stock market, he spread the news to the more close ears.

These people hear the good news, then buy stocks and raise the share price.

Then they passed on the good news to their friends and family members, and the information spread out like water waves, and share prices also rose sharply.

Until a person without background like us can find this information online, the stock price has already fully or overly reflected this positive.

The retail investors saw the good news and the upward trend of the stock price, and took the stock happily, but found that the share price began to fall, because the initial investors had made enough money to prepare to leave.

This is just a way of listing the insider into wealth. Now that the economy is developing, the way people earn information resources is becoming more and more diversified and complicated.

Therefore, information will eventually be reflected in the stock price, but the process of information is different from what we imagined.

The distribution of income that is favorable to investors is also very different from that in imagination.

Most of the imagination is to miss the good news, no profit, but did not expect to pay for the good.

If we compare the value growth brought by good value to a loaf of bread, in order to grab this bread, all competitors must take out their ten loaves and face the risk of being robbed together.

The ten bread is the capital spent on buying stocks, and the risk of being robbed is the fluctuation of stock prices.

The people with the information advantage were more powerful. He took ten of them, and finally robbed the sixteen.

Not only did the inferior person not get the bread, he even robbed five of his own bread, leaving only five.

In the market environment where people occupy the commanding heights of information, no matter whether they are good or bad, they only provide an excuse for retail investors to lure retail investors into gambling.

Now that we understand the distribution of information and the distribution of interests in China's stock market, we must think about how to put ourselves in a better position.

The status quo is hard to change, and only to adapt.

The first way is to get closer to the source of information, which tests the personal connections and the ability of information identification and analysis.

The most valuable resource in the stock market is information resources, and information resources can create wealth.

If you have strong ZF and financial background, you can get first-hand information, that is the best.

At the same time, it has strong ability of information authentication and analysis. Otherwise, it is sad to falsely believe false information or not to correctly analyze the information.

The second way is to admit their weakness and give money to the fund or bonus insurance, so that those resources and powerful institutions can help themselves invest.

You can earn money by doing your job well.

A friend who plans to engage in securities analysis should choose the first way, which requires us to continuously accumulate connections and analyze ability.

The relationship between people depends on saving. Few people are born with tough backgrounds. People are slowly developing good relationships with others in their own lives, schooling, training, work and entertainment.

Interbank connections are particularly important. Here, you can borrow the strength of training institutions, because they are a gathering place for their peers, and build an exchange platform, so that you can get valuable human resources here.

The ability to analyze is no longer redundant. We all value this piece very much.

In short, only those who have information and connections can eat bread in the stock market, so don't ignore the power of information and connections.