Several little-known truths about the stock market.

2024-07-22

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1. The main force only operates for a few months each year, and most of the time is spent resting.

You might think that the main force is constantly manipulating the market every day, but in fact, they spend most of their time resting.

Even in a bull market, after the main force has completed their layout within a certain period, they just lie quietly and wait.

The real main force is not busy; they are not like hot money that is always looking for hot spots.

What the main force seeks is the main line, and they operate in waves and trends, not short-term emotions.

Ordinary people, following emotions, chase hot spots in the market to make money, which is actually very difficult.

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But if you understand the direction of the main force, and can make fewer moves each year, looking for opportunities in the market's main line, then the probability of making money will greatly increase.

2. Bull markets are a minority of the time, and most of the increases are actually rebounds in a bear market.

Many people like to treat every rise as if a bull market is coming.

If you look back at the historical trend of A-shares, you will find that there are not so many so-called bull markets.In fact, for the vast majority of the time, it is in the rebound during a bear market.

It is important to understand that the goal of a rebound is to make a little money, reduce losses, and the main focus should be on getting out of the market as much as possible.

It can be said that, strategically, it is necessary to reduce positions, not to increase them.

Therefore, for most of the time, when you see the market rise, those who take profits are the real winners.

When you start to fantasize about the arrival of a bull market, you have actually already lost, and it is very easy to be caught chasing high prices at the top.

3. The actual control of the main force usually does not exceed 30% of the actual circulating plate.

Don't always think that the main force controls the plate, and it is necessary to control a stock.

If the main force wants to influence the stock price, having an actual control of 20-30% is already very high.

After all, the remaining retail investors have no way to unite with each other.

Moreover, this control refers to the actual circulating plate, and some major shareholders cannot reduce their holdings in the short term, and are not included in the actual circulating plate.The daily transactions of the main force generally account for no more than 30% of the total transactions.

If a stock is always busy with the main force every day, the situation is actually very bad, because when the main force wants to sell out, no one can take over the position.

So, when you find that the turnover rate of a stock is very high, you should be alert that the main force may have already started to escape, and may have already fled.

There are many situations where the sky-high volume sees the top, and there are also many that see the top with a positive line, which requires special attention.

4. The main targets of the market makers' harvest are not mainly retail investors, but insiders.

Retail investors always think that the market makers want to harvest themselves.

Nowadays, there are not many market makers who are still harvesting retail investors, because retail investors have also become smarter, and it is not so easy to harvest.

Most market makers, when thinking about their own retreat plan, do not take retail investors as the first target.

Their real target is actually insider trading, to find funds to take over the position.

For example, find a public fund, find a private fund, to be the big head, and take over the position at a high position.After all, there are too many stocks now, and it is actually not easy to operate to let retail investors take over at high positions in large quantities.

Find the funding party, agree on the division of the takeover, this method is relatively low risk, and the income comes quickly.

Touch less stock with insider trading, because there are too many insider transactions, which are easy to be caught off guard.

Any stock that has a phased rise, then falls after a large volume, and the stock that is closed at a one-word limit, is mostly stock with insider trading, and should be less involved.

5, not all hot money can make money, the proportion of losing money is actually more than 1/3.

Retail investors like to do short-term trading, and the most worshipped in short-term trading is hot money.

Many retail investors mistakenly believe that hot money is all making big money, all are grabbing the limit up, and all are several times a year.

But in fact, more than 1/3 of hot money is also losing money.

Many stocks are not actually a game between the main force and retail investors, but a mutual game between hot money.The final baton is not handed over to retail investors, but to other speculators.

Ultimately, the trapped speculators pass it on to retail investors, which is how the situation of retail investors being caught at the top occurs.

Many times, do not deify these investment institutions, including private equity funds; they also lose money when it's time to lose money.

There are even funds that manipulate the market, which ultimately also lose money, which is quite normal, they do not lose less than retail investors.

6. The market never trades on performance, it's all about expectations and storytelling.

Does the A-share market trade on performance? No, it doesn't.

Performance is actually also a theme, packaged as a blue-chip stock to be hyped.

The essence of a blue-chip stock is, in fact, a story, telling a story of performance expectations.

The previous story might have been about the explosive power of the theme, the story of imagination, and the performance expectations are just another story.

The essence of the market is to speculate on expectations, not performance at all.Investing is essentially a game of storytelling, where many stories are told so convincingly that they attract a lot of investors. Even high-end players and professional investment institutions can step on landmines because of stories. In this market, if there are no stories, there will be no speculation and opportunities. If everyone were to trade stocks based on performance, the market would mechanically stop, and even the trading volume would be greatly reduced. This does not conform to the logic of investment and is impossible to exist. Therefore, storytelling will continue and has always been the main theme of the market.

7. Short selling is not actually profitable, but suppressing stock prices can open up room for price increases. Many people say that short selling can make money, but in fact, short selling does not make much money, or it can only make a little money. The more you earn from short selling of stock prices, the less you earn, and the more you earn from long positions, the more imagination is limitless. All you can lose is that much, but you can make several times as much, which is not a fair game.However, to make several times the profit, there is a prerequisite: the buying point must be low enough.

So, you will find the real crux of the problem, which is that short selling can open up the space for making money.

A stock price of 10 yuan, when pumped up to 15 yuan, can only make a 50% profit, but if it is suppressed to 5 yuan and then pumped up, it can make three times the profit.

Therefore, the market is very happy to short sell, first suppressing the stock price to a very low position, getting cheap chips, and then making the market.

Not only is the safety factor high, but the profit space is also very large, which is convenient for the operation of funds.

8. In this market, there are no more than 1/10 stocks that truly have investment value.

Among more than 5,000 listed companies, there may only be more than 500 companies that really want to develop and have the ability to develop.

The purpose of most listed companies is actually to "sell shares" and support the company through financing.

This kind of thinking is actually very normal, after all, the temptation of the capital market is too great.

Nowadays, the real economy is not easy to do, and listing and financing means using the power of finance to support the company and give the company a new lease of life.If possible, one can also cash out and reduce holdings to gain immense wealth.

However, from the perspective of stock trading, 5000 companies all have speculative value and trading value.

In theory, as long as the trading is done well, there is an opportunity to make money from any stock.

Therefore, for retail investors, either you have the ability to identify these 500 companies,

or you should earnestly improve your trading skills, think about the stock market from a different perspective, and make money through trading.

Both paths are not easy, but to make money, one must successfully navigate one of these paths.

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