Generation of investors, the stock market rise in 2007

 2007-2008: the rise of a generation
stock market investors this article first appeared in people shocked, surprised the world. It attributed the legend of the Chinese stock market started in 2005, the share reform, her interpretation of a policy effect, but if you go beyond the stock market back in the past, the Chinese investment market in 2007 has five major surprises: 1 , the stock market the world's most expensive; 2, the higher the price the more stressed; 3, found many deposits of gold, the gold price rise not fall; 4, Chen Yifei's ; 5, or by the highest proportion of tea, and nephrite, and a variety of rare mahogany furniture.
reform of split share structure reform, the skyrocketing price of tea can interpret it? Obviously not. So the market in 2007 to *** Wonders of the reasons behind certain policy effects beyond the simple,bailey UGG boots, deeply explore the internal logic of its economy. five surprise in common investment goods, the past two years as the formation of the Chinese market, the beginning of investment goods will have to face a new economic phenomenon: the rise of investor groups. from the investor group and investment goods market point of view, the market in 2007 is unprecedented spectacle. because the traditional Chinese investment has always been rejected not only the exclusion of investment in cultural traditions, political system exclusive investment, even without also rejected the orthodox into the investment business, so in Chinese history did not leave an investor's tombstone!
times are different, the rise of the investor, who is the biggest investment of contemporary people? To answer this question, the most The simplest way is to see who the most profitable? Who's the largest market share? who market the most influential? So the answer is self-evident: the country! state of contemporary China's biggest investors. Therefore, to understand the Chinese stock market's past and future,Discount UGG boots, must be research as a market, the country's largest investor behavior and its relationship with other market between investors. From the perspective of behavioral finance is to behavior in the anatomy of the market groups, interpretation of the behavioral characteristics of the different behavior groups.
First, the state: a world-class investors, the first birth of a planned economy
the monopoly of investment, the most direct and most simple way is to close all of the investment goods market, so we closed the famous Shanghai Stock Exchange mm Far East was ranked first, third in the world. Since then, investment has become the executive power contingency, and then faded into a vassal state of political rights. So far, countries in the elimination of other investors, but also eliminate the person as an investment One of the country.
from the the legal position. but in other areas of investment, especially investment in the virtual economy, law and policy did not give investors a clear legal status, there are ministries that three years ago, the official issued a document strictly prohibited affiliated enterprises to participate in equity investments. In the illegal market would be tantamount to non-savings into the market, so any money without a bank it! In addition, the amendment before the We all legal regulations and control as one by one and found that farmers were not restricted to trading only stocks, in addition to unrestricted registration as a street: social idlers, that is, the saying goes, conclusion: China's stock market is to make the original design of the system of doomed unable to avoid. So in the state-owned economic entities began to appear in the ; of securities companies, fund companies and pension funds and other investment business license issued by state-owned enterprises. Obviously, this is contrary to the split share structure reform, the revolutionary significance: the stock market, securities are commodities, investors are God. countries have made the legal status of investors, securities market has been one of the largest legitimate from investors.
the affiliated enterprises equity incentive, all of a special status based on country: I am a investor! national foreign exchange reserves also contributed to the rapid growth in the investment management of foreign exchange, then set up the China Investment Corporation, a two-billion dollars initial investment to become the world's largest sovereign wealth funds. At this point, a world-class national investors was born, looking back two years, the stock market boom, the state is the biggest beneficiary of the investment, the stock market value of the state-owned assets, both in proportion or in the aggregate, are the largest. state-owned assets in the stock market carrying a premium of more than 13 trillion, while the end of 2006, the SASAC only less than the carrying amount of the net assets of 5.4 trillion. China shares the U.S. investment firm Blackstone and Morgan Stanley, its world-class investor's market position is very clear, although the printing of talking about their investment decisions, but in the investment community, has always been not to short-term gains, then the success or failure, or even the success of Heroes .2007, a world-class national investors is born! concern national investors and other market between investors is the key to interpret the stock market in 2008. other market investors, what does? one body, the second is retail.
II institutions: a non-rational growth of investment groups
2007 years is the rise of institutional investors in China for one year and the current public offering funds of up to 3.4 trillion total market capitalization, representing the market value of stock in circulation nearly 40% of the total, according to The total market value of shares in circulation to fight the freezing of funds + market funds calculate the total amount of raised funds in the proportion of nearly 30%. There are other institutions and private equity QFII, QFII funds the amount of two thousand million, which is well documented, Other private equity funds and . Therefore, the total amount of institutional funds should be 4 trillion over the present, accounting for total stock market value Banbiheshan mainland.
institutions in the market, hold high the found that If we trace such a major driving force behind the prosperity, none other than the non-institutional investors. This raises a question: is a rational investment agency people? What is the reason? If it is a reasonable valuation of the futures market, who is the China's stock market pushed up to nearly 70 times earnings? more than 6 times the book value? If institutional investors, institutional investors and how to define a rational standard it?
people on the different. Nobel Laureate in Economics, Amaya. Sen (Amartya Sen) of the theorem of rational choice economics (RCT, Rational Choice Theory) made a very detailed study, based on my Amaya. Professor Sen's understanding , the rational economic analysis has broad and narrow sense, the concept of narrow rational cost-benefit analysis is based on maximizing the interests of the broad concept of the rational method also includes the investment decision-making, and as a decision making method of discipline (Discipline), defined as the use of reason (for the operation or be used to predict and so on) there are different meanings. institutional investors have risk management techniques, have their own ideas persist, with operations specifications compliance, a pre-set goals , and will therefore maximize the return on the investment in the pursuit of behavior driven, pushing China's stock market continuously raise the stop loss point of risk management, protection and amplification of its profit margin. Therefore, the rational organization methods Trader higher the degree of its investment-driven level of non-rational higher market valuation. Therefore, I interpretation of institutional investors is: a non-rational rational investment groups.
people often ; chase often come from the agency selling the Most do not want to , do not read off the computer, and only interactions, trends in the economy without changing the fundamentals, the market does not occur as long as the mental collapse of its main direction is to push stock prices higher. because the chase does not sell into retail, institutional sell into the rise not to kill. In short: higher level of investment philosophy, the more mature the ability to push the stock market, the stronger, so the rational organization of investment and market valuation on each other, in the Chinese stock market's growing non-rational expectations context, enhanced the stock market's irrational exuberance .2008 go from here? look at the behavior of individual investors preferences, and their game with the national investors.
three retail: a pack of wolves and sheep's China's stock market before 2005, the surface is dominated by retail investors, because the legal and policy constraints forced the agency into the good and evil? stock among retail investors in the sun, the national investment in the gray areas, institutional investors are sneaked into the underground society of public opinion is biased in favor of retail investors. Over the past two years, public opinion began to shift criticism of retail investors ; non-rational This is the seventy million investors say the origin. However, China Securities Depository and Clearing Corporation recently sealed over twenty million deal almost did not happen over fifty million valid account. subdivided look, there are infiltrated underground organization, which is like ;, including those dedicated the second calculation, the effective retail more than five hundred thousand people, we often say this is the old shareholders. Therefore, China's old shareholders have seventy million of that, as it should be corrected.
statistics that in 2005, new accounts create a low number, only a hundred million, increased to 3.18 million in 2006, two years together and then divided by two, adding more than two million, which also includes the rise of new public fund and QFII accounts .2007 sudden opening of a climax in April and May reached its peak, this is definitely a wave of retail clustering market. to the latest statistics of the account calculated the total number of 130 million in one year to five thousand million new accounts in order In addition to two terms, new investors into the market in 2007 should be two thousand five hundred million, almost double the number of old shareholders. I misjudged the end of 2006 the stock market was flat in 2007, 2008, stock index or six thousand, mainly due to One is not this an estimated retail market in groups to the so vigorous. so later in the to six thousand, six thousand main stock index has still not think the goal came so fast! Stock Market Analysis of changes in investment structure can not be separated for the analysis of 200 groups of new investors into the market in groups of sudden changed the trajectory of China's stock market in the past. They are already accounted for in the number of absolute advantage, its investment style and the old shareholders are also very different.
Behavioral Finance put forward a concept called , including the ), one is noise traders (Noisy Trader), the former is the body, which is retail. two investors have the behavioral characteristics of the sheep, but retail investors are noise flock characteristics, institutions are Silence of the Lambs. almost straight upward, only two intermittent, once in adjustment are down 20% high end of the adjustment time is about two months. I wrote in the column observed, the time was the beginning of June 3450 recognized stock index down at the end, one is Shanghai in early December confirmed refers to the five thousand stabilized (after correction for the middle of the oil included in the index, will occur more than 230 points of variable). These two callbacks exposed a silent group, their institutions , a firm to do more.
with there must be passed in the process of amplification of partial derivatives, like a stone's throw into the water as part of a ring wave amplification, but the direction will become increasingly distorted. Therefore, the sheep running in and out in the market outside the stock market index has also come to fluctuations shock. However, in China, every Japan continues to steadily rise. If it is not very careful observation, you almost difficult to distinguish between two investment groups in the stock market exchange. This is my column's symphony, in short, in the , including myself. Although we see a trend, but did not expect silence in a pack of wolves, driven by trends revealed himself so quickly, the stock rose so high!
2008, the market transform into especially in the Chinese stock market's determine the trend of convergence is always
eyes of the beholder, the wise see wisdom, in my view, the virtual economy, market and general commodity market is the biggest difference between the Trend unpredictable. so there a need to grasp in the uncertain market conditions of certainty; asymmetric information in the search for profitable liquidity; forecast trend in the unpredictable risk of stage degrees. So, although I predict a the relative risk at different stages, to grasp a specific point in time the market opportunities, not being able to interpret the stock market code in the , and to avoid this type of narcissistic regarded as elegant; was to meet the challenges and changes based on real market constantly revised. which in turn can be divided into two schools, one is rational judgments, from the fundamentals of economic operation determine trends in the stock market, identified as the national economy, the stock market , the two ideas is different, can be neglected.
to see the stock market from the economic fundamentals, there are four good in 2008: 1, accelerate economic development in the inevitable escalation of the middle class demand for investment goods; 2, the slowdown in U.S. economy directly promote the inflow of foreign investment in multi-level; 3, the inevitable tightening of monetary policy to accelerate yuan appreciation; 4, loose fiscal policy directly contributed to improved fundamentals. The level of theory, we remain in the future discussion, now from the behavior of investment preferences to analyze the trend in the stock market in 2008.
stock among investors --- the greatest country, rational investors --- institutions, as well as noisy or silent investors flock of sheep and wolves --- group. they choose what the internal consistency? This is economics made himself a new proposition, because the economic definition of rational choice is one of internal consistency. I call this interpretation of the internal consistency for the group convergence behavior, trying to find different investors the same or similar behavior preferences, feels like a sudden out of a thick forest and see the endless blue sky. These three investment groups, which the seller will do in 2008? The answer is simple: never!
most likely to be the seller is a national investor, but unfortunately she is still a cage tradable, negotiable shares less than 27% this year, in 2008 only 32%, circulation of the Times to become a reality in 2010. And from the actual control of the management of state-owned listed companies motives of view, the beginning of this year incentive, market management, profit and corporate governance, and so turned over, the pressure in the stock market bubble , their rational choice is necessarily a Rational Analysis for the self-interest is to maximize the internal consistency or national investors, at least in 2008, rational choice is not assets outside to do the bull market of state-owned banks from the China Banking Regulatory Commission the first half is the main yes. then according to the theorem of rational choice economics,UGG boots, institutional rational (Discipline) operating level is higher, the market's irrational (Irrational) will overestimate the higher the institutional funds so dominant on the market, the stronger the stock market as a whole increase the driving force of the stronger. The paradox is a seemingly unreasonable export a > look at retail, to enter the market in 2008, can not be both ratio is about 20%, of which about half is the insulation. China's urban population in 2008 is expected to reach six hundred million or more, 10%, the direct intervention of the shareholders should have the sixty million or so, so I estimate the number of new accounts in 2008 will decline, at least not recurrence of the outbreak of 2007 in groups into the market. If these estimates can serve as a reference, the total number of new accounts in 2008 will be reduced to four million, the Shanghai and Shenzhen account divided by two separate terms, the number of new investors will about ten million.
incremental reduction of the number of new investors but does not necessarily mean incremental reduction of shareholders funds, which gave me propose a new problem: individual investors in 2008 to estimate the amount of money? There are several reasons I am more inclined to conclude that the significant increase in the amount of retail funds: 1, the inevitable effect of inflation, negative interest rates squeeze bank savings, from the bank's regularly into current, which means that savings is about to accelerate, not to sell from the impulse into sound,UGGs, from gambling to investing; 3, the wealth effect of the investment market will be like a catapult into the water ripples that circle around to enlarge, forming a steady flow of information, so that more capital into the stock market, as long as blindly without policy intervention, there is no market for psychological breakdown, from the wealth of information to transfer funds into the market chain will not be reversed in the recent trend.
In summary, the investment group in 2008 and 2007 still Like the stock market has pushed up the internal consistency. This convergence behavior of groups of macro-economic trends in selection and promotion of the common stock of irrational exuberance, so the bull market will continue, turning point must in time, trend reversed only in national investment preference reversal in human behavior when it is likely to occur, and this reversal will be tradable stock market in China as a precondition to the Government An economic study of social choice, provided us with a judged that the key market trends, investment in research opened the door to people's behavior choices, the conclusion may seem absurd, but in 2006-2007 the stock market has been partially tested. Economists have no reason to refuse to open the windows of rational decision making, behavior selection into the door, but should not be self-appreciation of so-called En Liesi modern works are not of interest in the stock market the housing market, did not on the behavior of inflation and asset bubbles of interpretation and decision making. Many people still do not miss the era of inflation, asset bubbles like to squeezed life, and sing away from the economy, government, cursed deviant society, did not realize, all of which have become the lifestyle of their choice, calling the survival password interpret these modern financial experts.
2007 年December 29 in Las Vegas