Chapter 365: The Tide

The management still started to take action. In response to the current speculative overheating behavior in the market, several articles have been published in succession to remind investors to pay attention to risks and criticize the phenomenon of vicious speculation.

However, the effect seems to be unsatisfactory, and not many people noticed this. Everyone is happy to join the stock market and enjoy the pleasure of a rapid rise.

When Yang Jier and Chen Mingluo came to the stock market again, they found that the market was hot, and they looked full of red and gratifying rises. Many stocks pulled out almost straight trends in one day, and it was rare to see low-key stocks.

Everyone stood there and communicated with each other, or discussed with a smug look on how much money they made today, or were studying how long it would last?

"Hong Kong will return for more than two months, and it is estimated that the market will not change in the short term." Many people expressed their judgment optimistically.

After hearing this argument, Chen Mingluo laughed and refused to comment.

"You are smiling strangely-" Yang Ji'er said after seeing her.

"I'm laughing at these people-" Chen Mingluo replied, "Ordinary people know the impact of Hong Kong's return on the stock market, so how can the dealers still not know? In fact, this is also the smokescreen they release, which is a powerful tool to numb everyone. With this understanding, they can arrange everything safely and then escape from the high position smoothly."

Yang Jier nodded and said, "What you said makes sense, it's just taking advantage of everyone's greed. Although it sounds simple, most people regard themselves as stock gods and naturally fall into the trap."

"Greed is the natural enemy of stock trading." Chen Mingluo said.

By the end of April, Chen Mingluo had already taken out all his stocks.

However, the market's enthusiasm for speculation is still as hot as ever. Everyone seems to be a little crazy. They will rush to catch any opportunity. Stocks that have not been speculated in the entire market have completely disappeared, and there have even been several stocks that are about to hit the 100-yuan mark.

However, under this situation, many people also realize that the risks are intensifying and a relatively large adjustment should occur.

Finally, as the last week of the end of April, the stock market underwent drastic changes.

All stocks seem to release huge amounts within a unified period of time, and what follows is a continuous decline. Many stocks directly hit the limit.

Many investors who were originally content with satisfaction were stunned. The stocks they held in their hands had no chance to escape when they faced the limit. They could only watch their stocks shrink day by day and were helpless.

For a moment, this slump lasted for two months.

Of course, the most heavy losses are the ordinary investors, including the 10 million new investors who have entered the market.

It is said that the institutional investors, dealers and traders have been eliminated in full and have gone to Southeast Asian countries and Maldives for vacation. It is impossible to come back in the short term. Only trapped investors are left in the market crying together all day long, and they are full of worries.

In fact, from the history of world stock market development, every time the stock market price rises too high, it will bring revenge of a plunge, which not only causes losses to a large number of investors, but also has certain ups and downs and fluctuations on the national economy.

For example, after the Taiwan stock market reached its peak in the 1980s, it was exposed to the cold and it was down for five or six years but never recovered. For example, on October 19, 1987, the US stock market encountered a black Monday. The Dow Jones Index plummeted from 2246 points to 1738 points, falling more than 500 points in one day, down 22.6% from the previous day. This is all because the stock price of the US stock market rose too quickly in those years.

However, the power of the market is often irrational, especially in the stock market.

Taking the US stock market as an example, unusual growth has begun in the past two years. The Dow Jones Index grew from more than 3,500 points at the end of 1994 to more than 6,500 points in November 1996. In two years, the index almost doubled.

In this case, Greenspan, chairman of the Federal Reserve, had to speak out. His words on December 5 last year were intriguing, "How can we know when the irrational stock market boom will inappropriately increase the value of assets, resulting in unexpectedly long-term economic tightening?"

It is precisely for this reason that learning from the experiences and lessons of developed countries that the domestic management departments have made clear intervention decisions. An article by the People's Daily's special commentator finally gave the fanatical stock market a blow, making millions of sane investors sober.

However, this decline will reduce at least more than 100 billion of funds, which means that the market value of more than 300 billion of circulating market may be reduced to 200 billion.

Perhaps the Chinese will only become mature after experiencing these painful lessons.

When Chen Mingluo sent Yang Jier home, Sang Mingda talked about this matter again.

"When the stock price rose, the management was worried, but now it fell, and they were also worried-" Sang Mingda said to Chen Mingluo, sighing in his words.

There are so many constraints to want to do something in the country.

Take the stock market as an example. The best situation everyone hopes for is a slow bull rise, a kind of rise that conforms to the concept of the investment market, rather than the current over-speculation. This uncontrolled surge and plummeting will only cause market sentiment to be sluggish, thereby harming the interests of most people, and at the same time it will greatly affect the financing effect of the stock market.

Chen Mingluo also has a deep understanding of this aspect. "Now, the excessively high stock prices in Shenzhen and Shanghai stocks have begun to decline, which is actually a good thing. You must know that maintaining a high-priced stock market is too expensive for a country, especially not for developing countries like China that need funds. If the asset value expressed in the form of securities is too high, it will occupy too much of the total amount of money. Therefore, China's strategy is to maintain a low-priced market, and never a high-priced market. This must be the basic strategy of the domestic securities market. To achieve this goal, it is necessary to timely suppress the overheating wave of speculation, adjust the speed of new stock listing, and expand the capacity of the stock market. Another more important point is to reduce the premium when new stocks are issued and reduce the issuance standard of fifteen times the price-to-earnings ratio."

After hearing this, Sang Mingda looked a little thoughtful. He didn't know much about this, so he was not sure what Chen Mingluo said was correct. However, he still hoped that Chen Mingluo could talk more about his views on this issue, so as to give himself some inspiration.

"There are two feasible ways to expand the stock market. One is to list some of the legal person shares or state shares of listed companies, and the other is to choose some large-cap stocks with large capital. The fact is precisely that many large domestic companies urgently need financing from the securities market. For example, the Tianjin Steel Pipe Factory built with loans of over 10 billion yuan has just solved the problem of part of the capital, and still needs a certain amount of supplements. At this time, why not accelerate the transformation of its own shareholding system and strive to achieve domestic

What if the capital market raises a part of the capital capital?" Chen Mingluo said, "These two choices are very realistic. If the management makes any decision in this regard, the stock prices of the Shanghai and Shenzhen stock markets will undergo a corresponding adjustment. Imagine that as soon as the large-cap stocks listed at a price-to-earnings ratio of five to six times are listed, the stocks with high prices in the earlier high prices must move closer to the low stock prices under the comparison of the low prices of new stocks. If the expansion speed is faster, stocks with high price-to-earnings ratios last year will quickly fall back to the reasonable investment price."

Sang Mingda felt something was right after hearing it, while Yang Jier had more knowledge after hearing it.

It is said that because the market is too hot this year, the management has changed the issuance quota for next year to 10 billion, which is much higher than in previous years. It seems that this is negative news, but in fact, it is actually positive news for the market and investors.

After all, only by eliminating the heavy speculative fog in the stock market can we usher in real stock value investment.

Another point is that the annual report of various stocks will also have a severe test for the Shanghai and Shenzhen indexes.

Fundamentally speaking, the price of stocks is linked to corporate benefits, and it is difficult to have a large divergence between the two. In any aspect, last year and this year will be a valley bottom for macro-control, and the Chinese economy can only operate under a tightening situation.

Therefore, although the stock market was very hot a while ago, it is unrealistic to hope that the benefits of listed companies will improve greatly.

"The stock prices of Shanghai and Shenzhen stock markets need to be adjusted significantly, and the prices must return to a reasonable investment price. Unfortunately, a large number of new investors who bought at high points have suffered heavy losses. These people can only look like ships placed far away on the shore, looking at the tide that is retreating further and further, waiting for the next opportunity to rise." Chen Mingluo said to Sang Mingda.

Sang Mingda nodded and said to Chen Mingluo, "It seems that the stock market expansion will be relatively large next year. I think Xiling Province also needs to add several new listed companies, but it has not decided to find a breakthrough from those industries."

There are many excellent enterprises in Xiling Province, but there are also many backward enterprises, especially textile enterprises and heavy machinery processing enterprises that have been relatively depressed in recent years. They have been more affected by the external environment. Sang Mingda's meaning is that he hopes to integrate these enterprises and then go public to raise funds and obtain development funds.

After all, it is not so realistic to rely solely on administrative means to solve problems.

"This question is not that easy--" Chen Mingluo was not optimistic about this, believing that Sang Mingda's hope was difficult to achieve.

"Why?" Yang Jier expressed doubts about Chen Mingluo's different views.
Chapter completed!