Rebirth of the Capital Legend

"That's right, Lao Liao, why are you being so modest?" Li Jinshi responded at this time, "If it weren't for your reminder, Lao Chen and I probably wouldn't have invested in the smartphone industry chain. Not only would we not have invested in these two stocks, we would have most likely also taken over the stock 'Baofeng Technology'.

If it had taken over the stock of Storm Technology, today's closing result would have been completely different.

Not only will you not be able to make a profit, you will also suffer a lot of losses.

By the way, Lao Liao, your prediction on the stock trend of Baofeng Technology is also quite accurate.

This stock, with such a huge turnover in the morning and the overall market trend improving in the afternoon, still couldn't break out and couldn't hit the upper limit. It's really unexpected. I guess many people got scammed by this stock today, right?

"It's not really a problem with this particular stock," Liao Guoxiang said. "It's more that the emerging industry chains related to internet software, internet applications, and film and television media haven't been recognized by various short-term investors in the market, or rather, by many major investors in the market.

After all, the current market ecology is actually significantly different from before.

In today's market ecology, the main institutional capital group plays a leading role in the market and guides the core trend direction of the market.

Look at the major infrastructure line, and the new energy industry chain that has emerged in the past two days.

In other words, the main weighty sectors such as liquor, white goods, medicine, consumption, electricity, finance, and petrochemicals that have been growing strongly for half a year.

And the main line of the smartphone industry chain that broke out today.

Is it the core theme of the market dominated by the main institutional capital group? Is it mainly the continued support of the main institutional capital group that drives the market?
After the end of the last bull market, there were several rounds of stock market crashes.

The vast majority of stocks in the market are heavily locked in.

Under such a heavy situation of trapped shares, without the continuous entry of major institutional capital groups to take over and digest the power of these trapped shares, it is actually difficult to leverage the active short-term speculative capital groups in the market alone. To attract a large number of institutional main capital groups to take over, it requires the support of underlying logic and the expectation of a reversal of fundamentals. However, the main line of the emerging industrial chain, which is mainly composed of film and television media, Internet software, and Internet applications, lacks the expectation of a fundamental reversal. What is missing is the underlying logic.

Without these, the main institutional capital groups will not intervene on this line on a large scale.

This has led to the situation that in the main areas of the emerging industrial chain, mainly film and television media, Internet software, and Internet applications, the internal chips of a number of stocks cannot be completely settled. The chip structure cannot be completely settled, which means that there will always be a large number of chips floating, which will definitely cause signs of continued increase in selling pressure.

You can find out by looking at the volume feedback of the two stocks, Baofeng Technology and Oriental Yuhong.

Oriental Yuhong's check has doubled from the bottom, and its market value is much larger than that of Baofeng Technology. However, if you look at its volume feedback, not to mention the trading volume, just talking about the trading amount, Oriental Yuhong's current market trading amount is smaller than that of Baofeng Technology.

Even though the stock price has doubled, the trading volume has not changed much compared to the bottom.

This means that the internal chips of this stock have been completely settled under the leadership of many institutional main capital groups that continue to take over, and have been directly locked by a large number of on-site holding funds under the continuous lock-up of the "Fuxing Road" funds.

In this case, no matter how the stock goes up or down, the selling pressure it faces will not be very great.

Since the selling pressure will not be too great, there will naturally be a lot of funds willing to take over, and the corresponding stock price trend will be much smoother.

On the other hand, as for the stock of Storm Technology, this morning, the main funds invested in this stock were at least around the daily limit, with more than 5000 million invested. However, such a huge investment still failed to block the daily limit, and the market divergence was still so huge, which means that although the stock price has fallen by almost 90% compared to the high point, the internal chips are still very scattered.

Under such a fragmented chip structure, it is difficult to develop a coherent market trend.

In addition to the need for a large number of institutional main capital groups to continue to intervene to lock positions, it also requires core market hot money like "Fuxing Road" that can invest over 100 million yuan in funds for long-term lock-up, so that the internal chips can truly settle.

However, let’s not talk about the fact that there are several hot money seats in the current market that have the influence of "Fuxing Road".

Just say that in the absence of underlying logic and no expected reversal of fundamentals, who would be so foolish as to enter the market and lock up large amounts of funds?

After all, this check has a high market recognition.

However, its operating performance has always been questioned by the market, and it is very likely to be delisted in the future.

In other words, compared with the future development of the industry and market trends, this stock lacks medium- and long-term logic and it is difficult to attract medium- and long-term investment funds to enter the market. Without medium- and long-term investment funds entering the market to lock up the chips, then in the short-term market trend, the chips will always be difficult to settle, and the stock price will be difficult to maintain sustainability, let alone open up the expected height space.

This problem exists not only in the stock of Storm Technology.

Looking at the main areas of the emerging industrial chain, which are mainly composed of film and television media, Internet software, and Internet applications, many corresponding concept stocks have this problem.

For example, LeTV, Maruda Film and Television, Netspeed Technology...these were previously the leading stocks with the highest weights in the ChiNext Index.

And as the core leader of this line.

The reason why the stock of Huawen Online can show sustainability and open up high space is mainly because the circulating volume and market value of this stock are very small. With the market value and circulating volume of this stock, there is no need for the intervention of the main institutional capital groups. The combined efforts of several hot moneys in the market and some retail capital groups that follow the trend in the market are enough to form a complete control trend of this stock.

So, I think we can speculate on this emerging industrial chain.

You should also choose stocks with relatively small circulating shares and market capitalization, preferably below 50 billion, which have speculative value.

Once the market capitalization is large, it will be very difficult to hype it up solely by relying on the active hot money in the market.

Relatively speaking...

It is definitely the individual stocks corresponding to the large-scale infrastructure, new energy industry chain, and smart phone industry chain that are more cost-effective for speculation and investment, and the winning rate will be higher.

At present, we must recognize that the market trends are no longer dominated by hot money in the market.

Only by recognizing this fact can appropriate trading strategies be implemented. The current market environment is no longer an era of purely speculative trading based on concepts.

I feel that after this year's continuous stock market crashes and continued market performance, the market has evolved, and it is no longer possible to speculate on single concepts.

If we don't change our past views and recognize evolution.

I still hold the same idea of ​​stock trading as before.

I feel that it will be difficult to make any real money in the market in the future.

Take the stock of 'Lixun Precision' for example. The reason why I believe this stock will become the leader in the smartphone industry chain.

It is because of this stock that there are strong expectations for future performance.

At this time, it is a company that is particularly closely tied to Apple and has strong business expansion capabilities.

Judging from the company's many industrial and business layouts, although the current market value of this stock has reached tens of billions, its growth room is still very large.

This is also the reason why a large number of institutional capital groups in the market are willing to hold this stock.

Of course, with the continued support of the main institutional capital groups in the market, it was indeed a bit beyond my expectation that the stock could be directly grabbed to the daily limit in today's market trend.

But no matter whether this stock hits the daily limit today.

In fact, none of them can change the subsequent market trend of this stock.

According to my prediction, this stock will most likely continue to rise sharply in the future, and I feel that the smartphone industry chain seems to have reached a point in time where the fundamentals are gradually improving and the industry continues to grow.

The global smartphone market before was actually a pattern of competition between the Spring and Autumn periods.

But now, as the market becomes more and more mature and as more and more players exit this market, I feel that this market will tend to mature and stabilize, and the corresponding business volume of the core leading foundry will become larger and more stable. I feel that the check of "Lixun Precision" has a trend of transforming from a growth stock to a blue-chip stock.

Of course, the two stocks of Oufei Technology and Goertek are also not bad. They are both core leading stocks in Apple's industrial chain.

Basically, as long as the performance of Lixun Precision stock is good.

Then, there is a high probability that these two stocks will rise and follow the trend.

Moreover, this trend-following is even more closely linked than the stocks in the major infrastructure sector that follow Oriental Yuhong's movements."

"Old Liao has a point," Li Jinshi said. "The current market ecology is indeed significantly different from before. Short-term investors seem to be increasingly favoring small and medium-cap stocks favored by institutional investors, rather than stocks with compelling concepts. I suspect this shift in ecology is due to Huayi Capital's massive increase in core holdings in the liquor and white goods sectors at the beginning of the year, as well as their subsequent investment in infrastructure.

In the past, many major institutional capital groups also engaged in short-term speculation.

After all, it’s for performance.

But now, when the market concept speculation no longer works, everyone finds that as long as you choose the right direction and the industry with a fundamental reversal, like an institution like "Huayi Capital", you can also get explosive performance by holding large positions for a long time and locking them in. Naturally, you will become less interested in short-term speculation.

This has also led to a decreasing number of funds engaging in short-term speculation in the market.

In today's market, the overall volume and liquidity of short-term investors should be decreasing, right? On the contrary, the number of long-term investors is increasing.

This is also the fundamental reason why the corresponding stocks in the main sectors of emerging industrial chains such as film and television media, Internet software, and Internet applications, which rely more on concept speculation, have such weak trends and have always found it difficult to form a sustained upward trend. It is also a major reason why a number of the market's weighted main sectors, such as liquor, white goods, pharmaceuticals, consumption, electricity, finance, and petrochemicals, perform significantly better than the index regardless of whether the market index rises or falls.

I feel like this morphological shift, and ecological shift, is going to continue.

More and more investors in the market have realized this.

The market's major trends and diverging effects will likely become increasingly pronounced, and the survival space for concept stocks without substantial performance support will likely become increasingly smaller."

Chen Guiyun couldn't help but smile when he heard what Li Jinshi said, "Hearing what you said, the market ecological structure has begun to generally lean towards the medium and long term. There is an increasing amount of medium and long-term investment funds in the market. If pure concept stocks have no future, isn't this a sign of market maturity?

I feel that it is actually quite tiring to keep engaging in short-term market speculation.

If you can reap relatively substantial profits through medium- and long-term investments, then there is really no need to engage in short-term speculation every day.

Moreover, if the market ecology gradually changes.

In other words, as more and more retail investors agree with this investment philosophy, it seems that this investment model can be formed.

After all, the rise in stock prices is based on everyone's expectations.

As long as this concept is recognized by everyone, then expectations are formed, and the market will naturally develop and strengthen in the direction of expectations."

"Old Chen, aren't you being too optimistic?" Li Jinshi said. "I'm worried that if this ecosystem continues, it will often lead to a situation where excess is worse than deficiency. In other words, the market pendulum effect will likely develop towards the other extreme. At that time... I'm afraid it will replicate the trend of the US stock market fifty years ago, the Nifty Fifty!"

Chen Guiyun chimed in, "That's basically impossible, isn't it? my country's market ecosystem is completely different from that of the US stock market. Besides, the 'Beautiful 50' phenomenon back then was a magnificent bull market. If our domestic market could replicate that trend, accurately predicting the trend and timing wouldn't be a bad thing. After all, we're not institutional investors. Even if we recognize this shift in the market ecosystem, we're trend investors, not so-called fundamental investors. Since the market trend is developing this way, we naturally just follow the trend." (End of Chapter)