Rebirth of the Capital Legend

“That makes sense,” Zhang Xinlei said. “As Buffett said, principal, principal, and more principal… The most important and primary principle of investing is to avoid losing principal, right? At this point, continuing to sell to cut losses might indeed result in selling at the lowest point of the day, but if you don’t cut your losses, the risks will only be greater.”

“Market liquidity is already dwindling across the board and is heading towards a depletion effect,” Lao Qian said. “In this situation, I think there’s nothing wrong with quickly cutting losses.”

“It’s not just us…” Zheng Jinming said, “Right now, all short-term funds in the market are basically scrambling to escape, and the number of stocks hitting their daily limit down due to loss of liquidity in both markets is also increasing.”

“Look at the stock ‘Huaxin Cement’. The buy orders at the daily limit have dropped sharply to below 10 lots.” Zhang Xinlei said hurriedly. “Judging from this, ‘Huaxin Cement’ will definitely not be able to hold the daily limit today. Under such extreme sentiment, 10 lots of buy orders probably won’t last long.”

"Without a doubt, 'Huaxin Cement' stock can't hold on any longer." Seeing that 'Huaxin Cement' stock was starting to show a great risk of hitting the limit down, He Zhong felt that this absolute core hot concept leader of the 'major infrastructure' theme would most likely replicate the trend of 'Huawen Online' stock yesterday. He felt much better and said, "Within 5 minutes at most, this stock will definitely hit the limit down."

"Beijiang Jiaojian is still a relatively stable stock," Zheng Jinming said, as the risk of Huaxin Cement's stock price hitting the daily limit and then falling back increased rapidly. "It seems that if Huaxin Cement falls back and Beijiang Jiaojian is the only stock in the market with high turnover and a limit-up price, then Beijiang Jiaojian could indeed successfully take over Huaxin Cement's leading position and become the emotional focus and concept leader of the 'major infrastructure' theme."

"With the entire market crashing, what's the point of becoming the leading stock in the 'major infrastructure' sector?" Lao Qian said. "Can 'Beijiang Jiaojian' really break away from the overall trend of the 'major infrastructure' sector and continue its upward trend with consecutive limit-up days?"

“Yes, I also think that at this point, it’s completely pointless for Beijiang Communications to forcefully maintain its limit-up price,” Zhang Xinlei said. “Even if Beijiang Communications manages to lock in its limit-up price today and exist independently of the market, then tomorrow, when the ‘major infrastructure’ theme experiences a strong loss-making effect and the entire market’s main themes open significantly lower, Beijiang Communications will most likely have to catch up with the decline. So… from this perspective, what is the point of Beijiang Communications forcing its limit-up price today? It would be better to follow the market’s correction and let the limit-up price fall.”

“That’s still different,” Zheng Jinming said. “If the stock price hits the limit up and then falls, it’s obvious that the major speculative funds that bought up ‘Beijiang Jiaojian’ during the day will suffer even greater losses. The overall circulating shares of ‘Beijiang Jiaojian’ are not large, and the turnover of the market was quite sufficient during its limit up in the morning.”

In other words, under conditions of relatively high turnover.

The main speculative capital maintaining the price limit up strongly held the price up without withdrawing its orders, and the selling pressure it faced was not much.

This major speculative capital only needs to spend a small amount of money to lock the price of 'Beijiang Jiaojian' at its daily limit. As long as it can strongly lock the price at its daily limit, no matter how bad the performance of other stocks or indices is in the market today, this major speculative capital that took over in the morning will not lose money during the day.

Moreover, 'Beijiang Jiaojian' maintained its strong upward trend, hitting the daily limit.

With other stocks that hit their daily limit up due to high turnover all subsequently falling back, when this one stock remains the only one with such high turnover hitting its daily limit up in the entire market, its market popularity and investor attention will inevitably rise even more rapidly.

As long as attention increases, the level of discussion also continues to rise.

Therefore, it will inevitably attract the participation of a group of followers.

As long as there is participation from groups of investors following the trend...

This allows the main speculative capital in the market to have room for maneuver, and with the support of these follow-up funds, they can reduce losses and exit the market.

Therefore, all things considered, as long as 'Beijiang Jiaojian' can lock in the daily limit up, this stock is a sure thing.

That would definitely be better than following the market and experiencing a sharp drop.

As for the check for 'Huaxin Cement'...

Do you think the major speculative investors who bought 'Huaxin Cement' this morning didn't want to continue pushing the stock to its daily limit?

Was it intentional to cancel the order and cause a market crash?

No, it's mainly because the circulating shares of 'Huaxin Cement' are too large.

The confidence of investors holding positions in the market has weakened significantly, and the selling pressure on the market is too great. The major speculative funds that were trying to hold the stocks at the limit up price simply cannot withstand this selling pressure.

If they face this selling pressure, they will forcefully resist the pressure to buy.

So, let's set aside whether the institutional investors who have finally gathered their funds on 'Huaxin Cement' stock will follow suit and sell off at this critical juncture.

Even if these institutional investors continue to lock up their positions.

This would create a situation where the major speculative funds that took over the market in the morning dominate the market.

When one party dominates the internal shareholding structure, and the overall market sentiment is trending towards a rapid collapse, if the entire market opens significantly lower tomorrow, panic will continue to escalate.

With one major player dominating the market, these speculative investors are even less likely to be able to exit.

In other words, even if Huaxin Cement manages to close at its daily limit up today, it will be difficult for the stock to sustain its upward momentum tomorrow. It will likely open significantly lower or even hit its daily limit down, similar to the performance of Huawen Online and Huawen Media today.

Since once the price is forcibly locked at the limit up, a huge amount of money has been invested.

The final result is irreversible, and there is a high probability that the losses will be even greater.

Therefore, under the current circumstances, these groups of funds that were manipulating the price limit, facing increasingly heavy selling pressure, naturally dared not fail to cancel their orders.

“Hmm, that makes sense,” Lao Qian said in the group. “It seems that, relatively speaking, the risk of the ‘Northern Xinjiang Transportation Construction’ project is actually smaller.”

"The advantage of small-cap stocks, you know," Zhang Xinlei chuckled.

Following a brief exchange among the group...

Under the watchful eyes of everyone, the 'Huaxin Cement' board quickly broke open.

The 10 lots of limit-up orders held for less than 3 minutes, despite the heavy selling pressure in the market, with virtually no large orders withdrawing to stop losses.

Then, under the watchful eyes of countless investors, the stock price plummeted and fell back to its previous high.

Almost instantly.

After the initial surge of Huaxin Cement's stock price was reversed, the stock price quickly fell back to around 5% within just 20 to 30 seconds.

"Damn, the market sentiment today is absolutely terrible! Even with such a strong fundamental logic, 'Huaxin Cement' still crashed."

After the collapse of Huaxin Cement's concrete panels.

Among the vast group of retail investors gathered on various online stock investment exchange platforms, some couldn't help but complain.

"Solid logic is useless; the market is a mixed bag."

"Sigh, yesterday I chased after 'Huawen Online,' the leading stock, at the opening bell, only to see it nearly hit a limit down intraday. This morning I sold off 'Huawen Online' at a loss, losing almost 20%, and then immediately chased after 'Huaxin Cement,' the core leading stock. Now 'Huaxin Cement' has also crashed, and I'm losing another 10% intraday. Damn it... I've lost almost 30% in two days! How am I supposed to play this market? I don't think I've lost this much even during the previous stock market crash." "Yesterday you chased 'Huawen Online,' and today you sold off 'Huawen Online' at a loss to chase 'Huaxin Cement.' You're not the only investor doing this."

"Yes, I also bought 'Huaxin Cement' at a high price, and I never expected it to crash."

"Sigh, it's not just 'Huaxin Cement' stock that's suffering today. The 'emerging industrial chain' theme is also in a terrible state. All three of my holdings have now hit the daily limit down."

"Let it fall, let it fall, anyway my stocks have already hit the daily limit down, I'm not afraid of how much it falls today."

"The market has generally fallen by nearly 4.5%, but look at the Shanghai Composite Index, it's still holding on, not even falling by 1.5%. It's really ironic!"

"With safe-haven sectors such as 'big finance,' 'liquor,' and 'white goods' supporting it, the Shanghai Composite Index is unlikely to fall too far."

"The 'major infrastructure' sector is also completely unable to hold up. The core leading stock, 'Oriental Yuhong,' has now seen its market decline widen to 5%."

"It's strange that, given the current situation, the 'Oriental Yuhong' stock hasn't been sold in large quantities yet."

"This is normal. It shows that the funds from 'Fuxing Road' are still holding onto their shares in 'Oriental Yuhong'."

"Yes, that's the only consolation, and it's also the reason why I didn't sell the 'Oriental Yuhong' check."

"I initially thought that the performance of 'Oriental Yuhong' stock today was weak enough, but compared to the funds that followed 'Huaxin Cement' stock in the morning session, I feel relatively lucky. Everyone was pessimistic about 'Oriental Yuhong' stock before, but look at it now... the leading stock characteristics of 'Huaxin Cement' stock are simply incomparable to those of 'Oriental Yuhong' stock!"

"In terms of its influence on market sentiment and the smoothness of its price movement, has any stock surpassed 'Oriental Yuhong' in the past two months? Absolutely none. So without a doubt... 'Oriental Yuhong' remains the core leader in the market."

"To be precise, it is President Su's 'Road to Rejuvenation' that is the barometer of the market."

"Oh dear, what should I do? The stock 'Huawen Media' hit the daily limit down today, and I can't sell it at all. I've already lost more than 30%."

"There's nothing we can do but wait for the price to fall below the daily limit."

"Actually, there's no need to place any more orders for stocks that have already hit their daily limit down. Since they're limit-up with no volume, whether you place orders or not, the result is the same: you won't be able to sell. And once you can sell, the stock price will basically rebound soon, so there's even less need to sell."

"56 stocks in the two markets have already hit their daily limit down. That's terrifying."

"Isn't it highly likely that hundreds of stocks will hit their daily limit down today?"

"I think a hundred stocks hitting their daily limit down is probably just the starting point, after all, the market is still in the morning session, and there's still a long time left in the afternoon."

"Perhaps, the feat of 100 stocks hitting their daily limit down can be accomplished by the morning."

"I don't understand. The stock had already hit its daily limit down, and everyone was still scrambling to sell."

Whether to sell or not makes little difference.

"That's right, I just don't believe that the market won't rebound tomorrow after such an extreme plunge."

"Looking at the ChiNext index over the past two days, the magnitude of the correction has been quite deep, hasn't it? It feels like the panic has reached its limit."

"That's not necessarily true. Market confidence has completely collapsed. In this situation, if the market continues to plummet, the Shanghai Composite Index could easily fall below 3000 points. Once the index falls below 3000 points, the entire market situation will be completely different. Once 3000 points is breached, we'll have to look to 2800 points."

"Is the possibility of the Shanghai Composite Index falling below 3000 points high?"

"It's hard to say. There's not much room for maneuver left before it reaches 3000 points."

With the strong support of the "national team," it seems unlikely that the market will fall below 3000 points.

"Can the liquor, white goods, and financial sectors hold up today? I cut my losses on other small- and mid-cap stocks and just bought into liquor stocks."

"Why bother switching positions at this point? Just sell all your shares!"

"Yes, clearing out the entire position is the only correct course of action."

"Speaking of 'Beijiang Jiaojian' stock, its performance today is surprisingly strong. 'Huaxin Cement' stock has collapsed. I didn't expect that this stock, which was originally a follower and the second largest, would actually hold up. Even now, at the limit up price, there hasn't been a significant increase in trading volume."

"If the first wave of price drops doesn't cause a crash, then the stock 'Huaxin Cement' won't affect the stock 'Beijiang Jiaojian's' performance, right?"

"In a sense, hasn't the 'Beijiang Transportation Construction' check already successfully positioned itself against the 'Huaxin Cement' check?"

"At this point, what's the point of talking about positioning? Everything is going to fall."

"Indeed, even if they successfully secure the position, it won't mean much. 'Beijiang Jiaojian' has no subordinates behind it. Generally speaking, such a lone entity can't survive."

"Even if this check holds up today, there won't be any premium tomorrow, so it's meaningless."

"It's this road, oh, it's truly horrific!"

"The market hasn't fallen this much in a long time, has it? Although there were two days of large-scale sell-offs before, investor confidence was much stronger then than it is now. Now the whole trend has changed."

"The winds of change have shifted, but the main trend seems to remain the same as before, right?"

"Yes, it seems that the main theme of the main board and a group of blue-chip stocks are still stronger. Small and micro-cap stocks do rise sharply when the sentiment is good, but they also fall sharply, and you can't react at all."

"That's right. The shares I bought in the morning yesterday were hit with two consecutive limit-down days. Who could have predicted that?"

Amidst the heated discussions among countless retail investors gathered on online stock investment platforms, the market trend, still driven by emotions, continues its descent into the abyss.

Even at 10:39 AM.

With about an hour left before the morning close, the market had already witnessed a widespread sell-off, with hundreds of stocks hitting their daily limit down. (End of Chapter)