Starting with a fully invested A-share portfolio to become a capital...

Chapter 177 A-shares collapse, Huajian becomes a safe haven for funds

Shenzhen, in eastern Guangdong.

China Merchants Securities Hongling Middle Road Branch.

Chen Sanrong touched his forehead, which had been losing hair recently, and said with deep regret, "Damn it, Wuyingjiao is still a loyal and righteous person. There was actually a two-yuan premium on China Construction. I should have gone all in with 1100 million."

Two days ago, Liao Guopei told him to go all in on Huaguo Construction's IPO. Chen Sanrong even suspected that the other party was trying to swindle his money. Now, looking back, Liao Guopei really does have some loyalty and integrity.

A 500 million yuan investment in Huaguo Construction, calculated at 3.96 yuan per share, would yield 126.26 million shares. Currently trading at 6.34 yuan, this represents a 62.37% increase, resulting in a total profit of 311.85 million yuan.

Earning 300 million in three days, 100 million in one day, Chen Sanrong swallowed hard. The money came too fast, so fast that he couldn't believe it.

But the thought that the opportunity to earn six or seven million had been cut in half filled Chen Sanrong with regret.

"Damn it, we missed out on so much money. We should have listened to Shadowless Kick and gone all in."

While complaining, he opened Liao Guopei's QQ friend chat window to view the chat history.

[Zen City Shadowless Kick]: Huaguo Construction is performing well; it is recommended to subscribe with all available funds. Xu Xiang will intervene and drive up the price on the first day of listing, so don't rush to sell.

Looking at the cold text in the chat box, Chen Sanrong fell into deep thought.

To sell or not to sell?
If he sells it, he will make a net profit of three to four million.

If they don't sell, they're either gambling that Xu Xiang will actually get involved, or gambling that Liao Guopei isn't lying to them, which is extremely risky.

Chen Sanrong hesitated.

Anyone who has participated in IPOs knows that the stock price on the first day of trading often results in a split-second profit or loss.

What is the concept of gain or loss in a single thought?
In the blink of an eye, profit and loss can switch.

You might be in a loss one second and have a profit the next.

Because of the huge fluctuations, many experienced IPO investors sell as soon as there is a premium and do not wait for the stock price to become clear.

After some hesitation, Chen Sanrong decided to take profits in time, as he did not trust Liao Guopei and the two were not close friends.

At 9:24, Chen Sanrong put up 126.26 Huaguo Construction chips at a price of 6.57 yuan.

As 9:25 a.m. approached, the Shanghai Stock Exchange's trading and settlement system automatically searched for the price with the highest price and the largest trading volume as the opening price, which was ultimately set at 6.7 yuan.

At the opening price of 6.7 yuan, all orders placed below this price were executed.

The moment Chen Sanrong saw the transaction price of 6.7 yuan, he regretted it so much that he slammed his fist on the table and said, "Damn it, I set the order price too low."

The difference between 6.7 yuan and 6.57 yuan is only 0.13 yuan. In Shanghai, 0.13 yuan is so small that if it falls on the ground, no one might even pick it up.

But as the old saying goes, small numbers add up over time; if you give it a large base, the result can become considerable.

For example, this 0.13 yuan, when added to the base of 126.26 yuan, yields a profit of 164138 yuan, a full 16.4 yuan.

In 2009, 16.4 Chinese Yuan was enough to build a small villa in my hometown.

……

While Chen Sanrong was still feeling sorry for the investors, those who had subscribed to the new shares were even more excited and were posting pictures on the online forum.

[Benben is here]: Image.jpg, subscribing to new shares is so awesome! I made 200 million in three days, which is higher than my return rate in six months. I'm going to be rich this time!
[Takoyaki]: Thank you to the country, thank you to the people, thank you to the China Securities Regulatory Commission, thank you to China Construction, for allowing a young woman like me to earn my first million. Thank you so much!

[Spicy Rabbit Head]: Image.jpg, sigh, what a pity, I only made 6000 yuan. I should have shoved my underwear in.

[Socialite Feng Ge]: Who told me China Construction would break its issue price? I missed out on this wave of profits, I'm so pissed off!

At that time, the retail investor forums on financial websites such as Caiyan.com, Eastmoney, and Tonghuashun were filled with IPO investors of Huaguo Construction showing off their returns.

Someone earned 500 yuan.

Someone earned 10 yuan.

Some people have made millions.

Retail investors who didn't subscribe are now filled with regret and extreme envy.

[Little Pig]: Please stop posting profit screenshots, I'm begging you! I'm missing out on the benefits of being a post-80s generation.

[Lone Wolf]: If God could give me another chance, I would go all in on China Construction!

[Hua Ge Doesn't Drive a Car]: I've sold my RV, cashed out my credit cards, and listed my wife on Zhenai.com. I'm begging for another big-cap IPO. I need to defy fate and cry in a Rolls-Royce.

While investors who missed out on the IPO or didn't have time to subscribe were lamenting their losses, Xu Xiang, who was far away at Zexi Private Equity, was smoking a cigar and looking at Sun Guodong, Ma Xinqi and others, saying: "There will be a wave of selling pressure when the market opens at 9:30. We must catch it, as it is related to the subsequent rise in stock price."

"I know, Brother Xiang."

"Understand."

Sun Guodong, Ma Xinqi, Shu Yimin and other Ningbo speculative investors responded quickly.

Since Zexi Private Equity settled in Shanghai, Sun Guodong, Ma Xinqi and Shu Yimin, the three "leaders" of the Ningbo Limit-Up Daredevil Team, have followed Xu Xiang to train newcomers.

As for the old stronghold on Jiefang South Road, it was under the command of Xu Haiou.

At this moment, in the trading room of Zexi Private Equity, more than 20 traders were focused on waiting for 9:30 to arrive.

Not only managers from private equity firms such as Zexi Private Equity, Haoze, Yitian, and Xin Chongyang are waiting for Huaguo Construction to open for business.

Besides private equity firms and speculative capital, public fund companies such as China Asset Management, Harvest Fund, Southern Asset Management, E Fund Management, and Bosera Asset Management also participated in this event.

It's no exaggeration to say that all the funds in the A-share market were deeply attracted by Huaguo Construction. The Shanghai Composite Index and the Shenzhen Component Index both opened lower, with the former opening at 3419.99, down 0.53%, and the latter opening at 13778.58, down 0.42%.

It's clear from the index decline that heavyweight stocks fell more sharply than small and mid-cap stocks, with banks, securities, oil, and coal all opening lower to varying degrees.

At 9:30 a.m., the transaction volume of Huaguo Construction's auction was recorded, totaling 1173 million lots, or 11.73 billion shares.

Based on the opening price of 6.7 yuan, the trading volume of 11.73 billion shares has reached a staggering 78.591 billion yuan.

The 78.591 billion was just from the opening auction, which shows how popular it was.

After the A-share market officially opened, just as Xu Xiang had predicted, a huge amount of selling pressure immediately emerged, amounting to several million lots, as many investors wanted to cash out and leave the market.

"Take over!"

Xu Xiang spoke without hesitation.

In an instant.

Zexi's private equity funds flooded into Huaguo Construction's trading platform like a tidal wave.

Not only Zexi Private Equity, but other public and private funds, including retail investors, rushed in to support the stock price immediately.

"Holy crap, the selling pressure is huge! A full 500 million lots of sell orders!"

"The capacity to absorb the demand is also very strong!"

"The selling pressure of 33 billion was actually absorbed; China Construction is about to take off!"

"A rock-solid stock price!"

Inside Zexi Private Equity, traders were amazed as they placed their own buy orders.

Once the initial selling pressure was absorbed, the stock price began to gradually climb upwards.

6.72 yuan.

6.81 yuan.

6.9 yuan.

When the stock price reached 7 yuan, Chen Sanrong completely lost his composure and slammed his fist on the table again, exclaiming, "Holy crap, how is it still going up?"

He sold all his shares at 6.57 yuan, and now he has missed out on a 6.54% gain.

"Should we admit our mistake and bring him back?" Chen Sanrong hesitated greatly.

While he hesitated, a large number of retail investors had already taken the lead in the charge.

[Just Today]: China Construction is still rising, damn it, guys, I sold too early! I'm planning to buy some back.

[Little Lucky]: I've already bought back the shares; I'll just hold out against the major players with 10 yuan!

[Don't Call Me Da Vinci]: That's amazing! Is this what a large-cap stock looks like? Unbeatable!

[Stopping War is the Way to Victory]: Within two or three minutes of the market opening, the trading volume reached tens of billions of Chinese yuan. The scale of China Construction is terrifying.

While retail investors were discussing the matter, self-media articles flooded in like snowflakes, quickly obscuring their view.

Unbelievable! The exorbitant premiums in Chinese construction have enabled some to transcend social classes and achieve financial freedom!

Shocking! Huaguo Construction's pre-market auction trading volume reached 1173 million lots, worth 78.591 billion yuan, becoming a benchmark in the A-share market!

Eagerly anticipated! A 500 billion yuan project lands, A-share heavyweights collectively pull back, and a large influx of funds flows into China State Construction Engineering Corporation!

On July 29, the A-share market was no longer dominated by banks, securities, coal, and oil, but only by Huaguo Construction.

Huaguo Construction's stock also firmly occupies the top spot on the trending search lists of major platforms.

……

And at the same time.

the other side.

The Finance Conference Room of Caiyan.com

Liao Guopei was extremely excited, his whole body covered in goosebumps.

"It's gone up again!"

"Damn, it's gone up again!"

Should we reduce our holdings?

He really is afraid of heights. You have to understand that Zhang Yang, Liao Guopei and Lin Guangchang have invested a lot of money, almost 2 million yuan in total. It's perfectly normal for them to want to take profits.

Lin Guangchang looked at Zhang Yang, waiting for the man to nod.

However, Zhang Yang remained unhurried and said in a deep voice, "The intraday support is very strong, and the selling pressure has decreased. Let's wait a little longer."

"Gulu——"

Liao Guopei and Lin Guangchang exchanged a glance.

We still have to wait!
That works!

Then let's keep waiting!

The two still unconditionally believed in Zhang Yang.

Because they now have a 70% to 80% profit margin as a buffer, even if the price falls, they can take profits immediately.

Why do retail investors always lose money?

The reason lies in the ten-character mantra: "Eat until the bottom is full, then buy at the bottom halfway up the mountain."

No matter how strong the buying support or how good the trend, some retail investors will rush to exit the market when the price rises even slightly.

If you're afraid to buy when prices are rising, and you stubbornly hold on when prices are falling, who else but you'll lose money?
There are also some retail investors who like to buy at the bottom. No matter how bad the trend is, they enter the market as soon as they feel it's right, and the result is that they get deeply trapped.

As a top fund manager on Wall Street in his previous life, Zhang Yang would naturally not do something like "buying at the bottom of a mountain and then buying at the top halfway down."

With strong buying support and a profit margin of 70-80%, he doesn't need to panic at all; instead, he should patiently wait for the turning point.

7.09 yuan.

7.15 yuan.

7.33 yuan.

The slow climb in Huaguo Construction's stock price has captivated the hearts of countless investors.

Stockholders are shouting, "Go up! Go up! Go up!"

On the contrary, shareholders who did not hold shares in China Construction were hysterically shouting, "Fall, fall, fall!"

At that moment, Chen Sanrong regretted it.

7.33 yuan…

Do not!
It's already 7.39 yuan!
The first-day increase in Huaguo Construction's stock price far exceeded his expectations!
Just then, Zhang Yang looked at Liao Guopei and said, "Send a message to the guy who jumped off the building, and show him a screenshot of his account earnings."

"why?"

Liao Guopei was puzzled.

show off?

Isn't that unnecessary?
However, Zhang Yang just smiled faintly and said, "If I'm not mistaken, he must have sold Huaguo Construction a long time ago, or he didn't participate in the IPO at all."

“Now if you send him a screenshot of your earnings, it will not only show that you are genuinely helping him play, but it will also make him completely addicted.”

"Look at this, this is a master of manipulating people's hearts. I seriously suspect that Joker studied psychology in college!" Lin Guangchang couldn't help but exclaim.

He had never met any geniuses before and thought he was an absolute stock market genius.

But when he met Zhang Yang, Lin Guangchang suddenly realized that he had been narrow-minded and ignorant.

A true genius can achieve a return of millions in just a few months!

"I'll send it right away."

Liao Guopei quickly opened QQ on his computer.

Even though his capital is much larger than Zhang Yang's, Liao Guopei has to admit that Zhang Yang is a hundred or a thousand times better than him in terms of trading strategies, news interpretation, and trend judgment!
Just as someone who doesn't invest in stocks sees Zhang Yang as a frog in a well looking at the moon, someone who invests in the stock market sees Zhang Yang as an ant seeing the blue sky!

"pat-"

Press Enter to send the message.

[Zen City Shadowless Kick]: Image.jpg, how much did you earn this round?

Upon seeing the message, Chen Sanrong fell silent. He was wrong; he had truly made a mistake.

I sold it for 6.57 yuan, and now Huaguo Construction's stock price is heading straight for 8 yuan.

How much did he miss?

Assuming the stock price reaches 8 yuan, the price difference per share is 1.43 yuan, and 126.26 shares would be worth 180.5518 yuan.

What can you do with 180 million?
The most obvious benefit is that you can buy a house in the core area of ​​Beijing, Shanghai, Guangzhou, or Shenzhen.

Having missed out on nearly 200 million, Chen Sanrong's heart was bleeding. He quickly typed, "I sold my chips too early. Is it still worth buying them back?"

Upon seeing the message, Liao Guopei immediately relayed it to Zhang Yang: "The guy who jumped off the building asked if he could be brought back, because he sold it too early."

"I'll definitely try to persuade him to buy it; maybe I can squeeze every last drop out of him."

Lin Guangchang spoke first.

"no!"

Zhang Yang shook his head. He knew Chen Sanrong was a very cautious person, and this might be a test.

Thinking of this, he replied to Liao Guopei, "Tell him not to go in, it's going to fall."

Or is it about gaining trust?

"Yes."

"This is ruthless and devastating."

"It's easy."

……

While Zhang Yang, Liao Guopei, and Lin Guangchang were plotting, Huaguo Construction's stock price had already reached 8.04 yuan, triggering its first trading halt.

It is worth mentioning that in 2009, a dual-board suspension was implemented.

What is a double-board suspension?

If the stock price reaches 20% or 50% of the offering price on the first day of listing, trading will be suspended for 5 minutes to give all investors time to calm down and think things through.

This is like having two insurance policies. After the 50% "insurance circuit breaker" is triggered, even if the stock price rises to 10000%, it will not be suspended from trading again, and there is no limit to the rise or fall on the first day. Theoretically, it can reach 10000%.

Of course, if it really is 10000%, the China Securities Regulatory Commission (CSRC) will probably manually suspend trading and thoroughly investigate which funds are manipulating the market.

After the first trading halt, countless new investors were still completely bewildered.

[Loves Chocliz]: What's going on? Why is Huaguo Construction suspended from trading? Could it be that the China Securities Regulatory Commission has intervened?

[Cola Chicken Wings]: The CSRC is getting involved? This is just a case of excessive price increases triggering a 20% trading halt. It will resume normal trading in 5 minutes. [God of Baijiu]: Huaguo Construction is my god! I'm going to make a killing!

With an issue price of 3.96, the current share price is 8.04 yuan, representing an astonishing increase of 103.03%!

Wang Yawei, who participated in the price surge, looked at the increase in the holdings of mutual funds and sneered, "Let's see who dares to challenge me for the top spot in mutual funds this time."

However, what Wang Yawei was unaware of was that fund managers from the other nine major public fund institutions were also involved in this cross-century rally.

Huaguo Construction is quite special; it was the first large-cap stock to be listed after the IPO suspension, and it's also an infrastructure stock.

Where will the 4 trillion yuan be invested?

Infrastructure!

When a large-cap stock goes public, other fund managers aren't stupid; they've already laid in wait, ready to make a big profit.

Besides public funds, even more private equity firms are involved, including Zhao Danyang, known as the "top private equity manager."

five minutes.

fleeting.

After a brief trading halt, Huaguo Construction showed no signs of correction and continued its upward climb.

8.12 yuan.

8.33 yuan.

8.42 yuan.

When the stock price reached the 8.5 yuan range, public fund managers, private fund managers, and speculative investors all chose to reduce their holdings.

However, retail investors were completely caught up in the hype and rushed in desperately.

[Stock Market Guru]: Take life and death lightly, fight if you're not convinced. Huaguo Construction is a recipient of the 4 trillion yuan investment plan. The reason its stock price is soaring now is because institutions don't want to give us retail investors cheap shares. Damn them!

[Night Sky and Galaxy]: I am firmly bullish on China Construction. Trust my judgment, this stock is sure to take off!
[My Favorite Beside Me]: What's there to be afraid of at 8 yuan? I saw an expert say that Huaguo Construction should reach at least 20 yuan, which is still 120% upside potential.

[I like girls in black stockings]: It's still rising. This is a large-cap stock. I should have known better than to sell it. They actually came up with the legendary "SB strategy".

Those who frequently trade stocks know that the simplified letter for selling is S, and the simplified letter for buying is B. The so-called "SB strategy" means that on the same day, the purchase price is higher than the selling price.

As massive amounts of retail investor funds poured into Huaguo Construction, continuously driving up its stock price, Huijin Company's leaders stood in the open trading area, their eyes gleaming, and said: "Prick the bubble."

"Pierce it!"

"Pierce it!"

In an instant, a group leader repeated it loudly.

Every trader, poised and on edge, dumped all their holdings on the moment they heard the instruction.

The four major banks, as if releasing a flood, were the first to show signs of selling.

[Stock Anomaly Alert]: Huaguo Bank has seen a massive sell order of 700 million.

[Stock Anomaly Alert]: China Construction Bank has seen a massive sell order of 800 million yuan.

[Stock Anomaly Alert]: Agricultural Bank of China saw a super sell order, amounting to 600 million.

[Stock Anomaly Alert]: A super sell order of 700 million yuan appeared in ICBC.

Not only the four major banks, but also China Merchants Bank and Shanghai Pudong Development Bank saw large sell orders, causing their stock prices to plummet.

The moment the banks collapsed, the A-share market was like a dam bursting, and the raging floodwaters swept through like a ferocious beast, leaving destruction in their wake!

Huaguo Petroleum fell 5.32%.

Guizhou Moutai fell 3.79%.

Huaguo Shenhua fell 5.78%.

Yangtze Power fell 3.33%.

The A-share market, like a breached dam, plummeted, with the Shanghai Composite Index even reversing course.

3400 points.

3300 points.

3280 points.

Just as the Shanghai Composite Index touched 3280 points, a large number of off-exchange investors with high leverage were forced to liquidate their positions, resulting in a stampede of funds.

[Sleeping Baby]: Damn it, the four major banks are down an average of 5%, I'm going to play your dam!

[I am a dragon]: My life is ruined! I just started investing in stocks with 5x leverage, and then the stock market crashed!
[Super Cotton-padded Jacket]: No, I don't like it! Let me out! I'll never trade stocks again and will just go to work honestly.

[Creamy Bun]: Damn it, this guy is really going to become a prostitute. He got wiped out by leverage. What a joke!

The Shanghai Composite Index is still declining, currently at 3256 points, down 5.3%, while the Shenzhen Component Index has fallen 800 points from 13836.66 points and is about to break below 13000 points, a drop of 5.78%.

The sharp drop in A-shares directly dragged down the rise in Hong Kong stocks. However, the Hang Seng Index remained within a controllable range, with a decline of only 3.6%, far less than the declines in the Shanghai Composite Index and the Shenzhen Component Index.

Besides the margin calls suffered by investors who had leveraged their accounts, all the stock market investors who had misused credit funds received calls from their respective banks.

The conversation was very simple, roughly...

[Dear Mr./Ms. XXX, we are the loan management department. We have detected that your loan of XX million yuan has been illegally diverted into the stock market or real estate market. Please repay the entire loan within 15 working days. If you fail to repay within the stipulated time, our company will charge a penalty fee as stipulated in the contract and has the right to freeze your savings account.]
Experienced stock market investors know that this is the legendary withdrawal of loans.

With a large number of investors facing loan withdrawal warnings, both major indices continued their downward trend, relentlessly seeking a bottom.

New investors who believed in value investing and selected blue-chip stocks flocked to Li Daxiao's Weibo account to denounce him after seeing their accounts turn green.

[When You Come to Harvest]: Teacher Da Xiao, you actually lied to me! Didn't you say it would reach 6000 points? How come the A-shares market crashed?

[Mo Chou]: You son of a bitch Li Daxiao, I believed your lies and bought a bank account, and now I've lost 2 yuan. You have to make it up to me.

[Li Xiaoyao himself]: I have some connections in the gay community. Li Daxiao, you just wait. If I lose my temper, I'll call 10 Xiongxiongs to beat you until you can't hold back your shit!
Li Daxiao was too busy to pay attention to the shareholders' accusations; his phone kept ringing off the hook.

"Ding-ding-ding-ding-"

The landline phone at his desk rang, and Li Daxiao quickly answered it.

"Hello, this is Li Daxiao from Yingda Securities."

“Da Xiao, Da Xiao, I am Shui Pi.”

"Boss Shui, Boss Shui, this is Da Xiao."

"A-shares plummeted, Hong Kong stocks also plummeted, where is the national team?"

"national team……"

Li Daxiao glanced at the computer screen and reassured her, "The national team is in there, don't worry, Shui Zong, we can hold 3200 points."

"It's still falling, Da Xiao."

Mr. Shui's tone was somewhat helpless.

Since this was a client with tens of millions in assets, Li Daxiao continued to reassure him: "We'll save the Hong Kong stocks first, then the A-shares. Don't worry, Mr. Shui, we can hold them off!"

"Won't it keep falling?"

Mr. Shui asked again.

"Don't worry, as long as Hong Kong stocks can recover, A-shares will be fine. Trust me, Mr. Shui, the bull market is still going strong," Li Daxiao assured him.

"Alright, alright."

"Then I'll hang up now, Mr. Shui."

"Hang it up."

As soon as he hung up the phone, Li Daxiao wiped the sweat from his forehead. Before he could rest, another call came in.

His continued bullish stance prevented many clients from avoiding the downturn, and many new clients suffered losses during this sharp drop.

During the A-share market crash, professors such as Yang Delong and Liu Jipeng, who had consistently maintained a bearish outlook, were finally exonerated, and countless investors flocked to them to confide in them about the huge losses they had suffered.

at the same time.

Zhang Yang was also exonerated.

Yesterday's bearish comments posted on the members' channel drew a large number of requests for help from stock market investors, most of whom were new to the market.

[Wind Chime]: I was wrong, Joker, I was wrong. The A-share market may have really peaked. I'm currently down 4%, what should I do?
[I'm Never a Short Seller]: As a newbie to the market, I've never seen anything like this before. A week's gains aren't enough to cover a single day's losses. Any advice?
[High Priest is here]: Joker, are you there? I'm really bowing down to you, what should I do now?
[White Sanctuary]: Hahaha, this feels like the crash of 2007. Luckily, I believed Joker and reduced my holdings yesterday.

People's joys and sorrows are not shared. At this moment, a large number of investors who were stuck at the daily limit down began to panic because they couldn't escape even if they wanted to. Meanwhile, a large amount of funds that had been watching from the sidelines began to rub their hands together in anticipation of the crash.

What kind of game is the stock market?
A game of financial speculation!

If someone loses, someone else must win!

Now, some are cutting their losses, some are buying the dip, and some are stubbornly holding on; a major battle of capital is unfolding in the A-share market.

……

Unlike the sharp decline of other A-share stocks, Huaguo Construction bucked the trend and rose, attracting a large amount of safe-haven funds to flock to it.

Xu Xiang originally planned to "suspend trading twice and then dump shares," which was something he had discussed with other fund managers.

With funds pouring in so aggressively, he keenly sensed an opportunity.

"Stop shipping!"

"First, let's see how strong the ability to absorb the load is!"

"???"

"???"

Xu Xiang's words left the traders at Zexi Private Equity and the speculative capital brought in by Ningbo's limit-up daredevil team completely bewildered.

What do you mean?
Plans can't keep up with changes?
Indeed it is!

The stock market is ever-changing; sticking to old ways will not get you to the top.

In the face of a sharp drop in A-shares, funds will seek safe havens, and Huaguo Construction may be their first choice!
Speculative funds are limited.

Institutional funds are limited.

Retail investors, however, have unlimited funds!

Why is it said that retail investors have unlimited funds?

The reason is that 95% of the A-share market is comprised of retail investors; it is a retail investor market.

One retail investor is easily exploited, and so are ten retail investors, but what if ten thousand or a hundred thousand retail investors work together?

If 10 individual investors each take 10 yuan, that's a total of 1 billion yuan!
There are far more than 100,000 retail investors in the A-share market. According to the latest official data, the number of retail investors in the A-share market exceeds 100 million.

It wasn't just Xu Xiang; other public fund managers such as He Zhen of GF Fund Management, Xiao Hua of Bosera Fund Management, Chen Zhimin of E Fund Management, Wang Hongyuan of Southern Asset Management, Shao Jian of Harvest Fund Management, and Wang Yawei of China Asset Management all sensed something unusual.

Without any market signals or notifications, they tacitly stopped selling.

The influx of retail investors' funds has made China Construction uncontrollable.

The more the Shanghai Composite Index and Shenzhen Component Index plummet, the more funds flow into Huaguo Construction, and the higher the stock price naturally becomes.

……

Zhangjiang Changtai Plaza, Block A.

Financial Research Network office space.

Liao Guopei stared wide-eyed at the plummeting A-shares and exclaimed, "My God! Both A-shares and Hong Kong stocks have crashed! What happened?"

"The index is poised to break 3200 from 3400 points. Will it then fall back to 1600 points?"

Lin Guangchang was somewhat frightened.

At the same time, they were surprised to find that Zhang Yang remained as calm as ever.

"Joker, aren't you surprised?" Liao Guopei asked curiously.

Zhang Yang clicked the mouse twice and switched to the Industrial and Commercial Bank of China (ICBC) page. At that moment, its stock price was 5 yuan, a drop of 5.84%.

After glancing at the information, he said calmly, "This crash was inevitable, and the risks had been apparent for some time."

"How to say?"

Lin Guangchang listened attentively.

Zhang Yang glanced at Liao Guopei, then his gaze finally settled on Lin Guangchang. He said, "Today, Huaguo Construction went public smoothly, and the national funds have completed their mission. These funds will naturally be withdrawn. However, I did not expect the withdrawal to be so violent, which has already caused a stampede of funds."

Once a stampede of capital has occurred, it is very difficult to reverse the situation.

Of course.

Difficult does not mean impossible.

If a massive amount of capital enters the market, around 1000 billion yuan, it should be able to reverse the current trend of A-shares.

But is it possible?

Obviously impossible.

Because massive amounts of funds generally refer to the national team.

The national team is now clearly trying to deflate the bubble and clear out the shares that have accumulated during their mission; they certainly won't pump the price on the same day.

After listening to Zhang Yang's account, Lin Guangchang couldn't help but exclaim, "No wonder you were so calm, Joker; you had already foreseen the decline."

"If I remember correctly, Joker said on the website's member channel yesterday that the dynamic price-to-earnings ratio of A-shares has reached 27.9 times, more than double that at the beginning of the year, while the net profit growth rate of listed companies during the same period was only 12%. The deviation between price and value has reached a historical high. How low does this price-to-earnings ratio need to drop before we can get back in?"

Liao Guopei, who was standing nearby, asked.

"We don't need to look at these; they're for retail investors. We're market makers, and market makers don't need to look at the macroeconomics of the A-share market."

Zhang Yang laughed.

"Snapped--"

Liao Guopei slapped his forehead, suddenly realizing, "The A-share market crash confused me; I almost forgot we're speculative investors."

Do speculative investors look at price-to-earnings ratios?
I won't watch!

Then let's look at the balance sheet?

I'm still not watching!

Speculative funds only use one indicator to select stocks: the number of shares in circulation, because the number of shares in circulation directly relates to the difficulty of controlling the stock.

Short-term control, 10% of the circulating shares.

Mid-term control, 30% of the circulating shares.

Long-term control, 60% of the circulating shares.

With fewer shares in circulation, the cost of controlling the stock in the short to medium term is lower, which is why speculative stocks often originate from small-cap stocks.

At this point, some people might ask, "Isn't 60% of the shares enough to trigger a disclosure requirement? And with such a high concentration of shares, how can we guarantee trading volume?"
Speculative investors aren't stupid; they generally have multiple securities accounts and won't allow any single holding to exceed 5% of the company's total share capital.

As for how to ensure trading volume when the chips are highly concentrated, the solution is simple: transfer chips between the left and right hands.

Looking at the bewildered Liao Guopei, Lin Guangchang couldn't help but tease, "The A-share market crash didn't stun retail investors, it stunned speculative capital, haha."

"This kind of drop can be traced back to a year ago, it's terrifying."

"It's only the first day, let's watch the show."

"It would be fun if we went back to 1600."

"You're overthinking it. I think it's certain that it will fall below 3000 points."

Liao Guopei and Lin Guangchang chatted idly, while Zhang Yang didn't join in the conversation but instead looked at the Huaguo Construction intraday chart.

"Intraday trading volume decreased, sell orders decreased, the KDJ indicator's K line crossed the D line, a clear buy signal, the stock price is trending upward, and net capital inflow continues to increase..."

Mostly small orders…

"Few large orders are flowing out..."

Zhang Yang's mind raced as he thought that all the funds in the A-share market seemed to be treating Huaguo Construction as a safe haven.

If that’s the case…

The premium might just mean we can still afford to eat there!
(End of this chapter)