Reasonable valuation and stock market ups and downs of non-rational

 Reasonable valuation and stock market ups and downs of non-rational
This article first appeared, made the basis of the reasonable valuation range is: under the conditions of ample liquidity, the stock market is expected to advance hh 2010 hundreds of samples in the long term the company track the dynamic data based on the analysis to determine the profitability of listed companies in 2009 will achieve 17% growth, the forecast uncertainty has increased significantly.
why the stock with a listed company in the Mainland and Hong Kong have different valuation standards? When the split share structure problem can be solved, and the market A new variable,UGGs, especially in the second half of 2009, which began a new variable A-share market valuation of supply and demand balance and the level of impact. in the full circulation of the stock market, stock market investors have liquidity preference and control preferences. The so-called: the great saphenous, hidden line in the city hh
recent stock market crash of 3000 is a stock index point not rule out the stock index fluctuated in the 2500m3500 point, because the stock market will always be among the expected and confirm each other's reality.
the trend of the stock market to determine why the eyes of the beholder is always wise see wisdom it? one of the reasons: Our estimate value of the standards may not all agree on the basic level, the value of the stock market there are always different views; causes II: adjustment of the existing valuation conclusions will be random, such as from last October to 3 times since I raised the value of center, the first one is the main stock index in 2000, the second is the 2500 stock index, the third is Hu Zhi 3000; third reason: the rational and irrational impulses valuation is a pair of twin brothers, devotion, rational valuation of the stock market in the event of The large deviation, or because of market sentiment, counted out?
State Securities Institute in the interim report put forward this year, a reasonable valuation range is based on: the conditions of ample liquidity, the stock market is expected to advance in 2010, in 2010, ROE (ReturnonEquity) is expected to reach 14.5% when the stock market investors will accept 2.5-3 times the book value and 20-25 times earnings.
Dr Chan led the team attaches great importance to macro-quantitative research, the number of long-term follow hundreds of samples of the company, based on dynamic data analysis to determine the profitability of listed companies in 2009 will achieve 17% growth, the forecast uncertainty has increased significantly. stock index at about the current location of 2700 is less than the corresponding 2.7 times the book value and 21 times earnings, sharply more limited space, even down in the stock index 2400m2500 point range will have a very strong valuation support. Financial and other television stations for a proposed investment market in stock index 2700m2800 range, you can participate in short-term trading opportunities for stock index 2700-3300, also long-term investment.
flow valuation:
capital flows and groups behavior
track sample of our company, A shares and H shares listed on both the stock market while the company, there is a huge difference in valuation standards. Why is the stock with a listed company in the Mainland and Hong Kong have different estimates value standard, in addition to trading and the differences in the distribution system, we can only find two reasons: First, the different currency regime, and second, investors are different. This leads to a new valuation criteria: First, liquidity valuation, the second is emotional valuation. The former comes from the surface of the inflow and outflow of funds and the supply and demand balance, which is expected from the emotional side of psychology and group behavior.
the behavior of capital flows and groups together about the stock market liquidity of valuation, seemingly unrelated, but in the stock market, every day is involved in the transaction when the stock of capital and people, as the issuer of listed companies basically do not participate in secondary market transactions. assumes unchanged stock liquidity, capital inflow and outflow and stock price changes should be proportional, but price is not so decide. so why do simple arithmetic conclusion wrong? because there are behavior of different groups of people, different emotional states, stock prices and financial flows between the supply and demand will be a great change. in the stock and fund balance of supply and demand, the price will be as optimistic about the long-term holders who become scarcity, will sell the pessimists become crazy enough, so the stage in a bull market may be overvalued, but in the irrational exuberance of the market environment, investors singing valuation and liquidity supply and demand, become almost entirely determined by the emotional side of things. but in 2008, into a non-rational irrational exuberance plummeted, investors exclaimed, reversed, the stock market all the way down, very emotional over-pessimistic completely dominated the market trend. So in October the stock market stock index fell below 1700 points, I was in the CCTV, ; of the concept, mainly based on market sentiment is overly pessimistic judgments. because the Golden State Institute report shows that the sample interval in 1600 stock index, dividend rate has exceeded the savings rate, investment risk groups and even save preference can also be accepted.
behavioral finance experts, Professor Shiller even market sentiment and the wealth effect of the interaction is interpreted as the flow of information about market sentiment and investor group behavior. from the emotional side and financial side of the interaction to interpret the mobility of the stock market valuation, stock prices can be inferred fundamental departure from the valuation of its inevitability, that is, the basic valuation of the valuation and liquidity side deviation from the norm, not the exception. economics in the 90's before accepting the Game Theory, 1994, the On the way to start thinking deeply influenced the economic way of thinking, so we swept the international economics textbook valuation represents the face of traditional economic way of thinking, represents the valuation of mobile way of thinking of modern economics. two valuation standard economic thinking behind the differences between the two, both the two complementary, but also conflicting.
liquidity valuation:

share reform with Chinese characteristics is the logic flow valuation of the stock, financial and human interaction, there is another China, a special kind of mobility is at stake split system, the listed company's stock is divided into tradable shares and non-tradable shares. This is a new variable, especially in the second half of 2009,UGG boots, this new A-share market variables to begin the supply and demand balance and the valuation the level of impact.
2009 年 8 3, the first time the Chinese A-share market than non-market capitalization market capitalization, then within a month occurred in up to 22% decline. Perhaps it is mere coincidence, but end of the year, the proportion of market capitalization will be increased significantly by about 74%, which is a milestone in A-share market. fundamental differences in valuation levels not only from financial and emotional, and now we introduce the system differences, compare the circulation the stock market and stock market valuation of share-trading levels. diagram shows, a bridge across the two valuations in A shares and H shares and the valuation difference is clearly related to the level of the proportion of tradable shares.
the stock market who thought up, most people hear is the valuation of liquidity troubles. From a fundamental valuation perspective, stock index 2700-3300, surpassing the range is in the second half will not be good in the first half; look from the valuation of liquidity, Restricted Shares of the lifting of the ban will change the balance between supply and demand of China's stock market, in short, that is, more shares can be traded, the value of the stock market will fall by the central . We go back to stocks, funds, and the game between the solving equations.
It is said that reduction does not necessarily restricted shares, it will not affect the stock market valuation levels. For this reason does not hold the party at the beginning of reduction of reduction will always say before the reduction, with game theory to analyze the way of thinking, lifting shares do not trade is almost impossible. because the shares of such nature, are fond of freedom, which comes from the investment market liquidity preference is operated by the financial sector liquidity premium. lifting of the ban as long as the proportion of non-tradable shares rose behind the behavior of groups from the original years, this is the group behind the stock price game.
ban increased the proportion of shares, will have the liquidity of A-share market valuation of the stock market to move closer to the circulation, have more and more recently the price has been upside down, that is,Discount UGG boots, A share price is lower than H share price, can be seen hanging upside down stock prices of almost all of the stock after the lift, so the increase in the proportion of shares after the lifting of the ban, A shares of the total valuation will face downward pressure, difficult to re-stock index during the year high.
reasonable The market trend will become the norm. box if the trend tends to smooth volatility, trading of investment income will drop, and once the wealth effect of stock market weakened, the net inflow of funds will be slowing down, in this case, equity Split valuation reform period decreased liquidity, the changes will pass through the financial side and emotional side to the fundamentals, leading to a decline in the stock market entered a new cycle. People often say that the stock market The reason is that the stock market stabilized, the popularity and lax, the fundamentals have not significantly improved conditions,UGG boots clearance, the stock market will enter the downstream channel in the consolidation.
spike in the market trend is usually due to uncertainty, long and short game, each has its advantages , but in the next two years, uncertainty still spike caused by a special institutional reasons. because in the between the formation of a new game. in the original A-share market, the liquidity preference and the preference of control are separate, secondary market investors, whether institutional or individual, which is almost not involved in control of listed companies of the game. the future is different, not only the price of the stock market game situation, and have the right to dispute the main force of the former is many small, which is the main predators are sharks, the stock market from now on will be fast, and gradually change the game had some of the Chinese stock market rules.
in the circulation of the stock market, stock market investors, there are two preferences, one is the liquidity preference, driven trading premium; the other is control of the preference, the drive control premium. purely market trading game the difference as the goal, so mostly short-term trading, and trading into the stock market in the control, the long-term strategic investor will also participate in secondary market transactions, market stability will gradually increase after several rounds of rises and falls as the stock market began power after the battle ended, the party will lose its power to vent their anger style crazy to sell, the formation of prices plummeted.
All in all, a box shock later this year, next year is the policy game, the stock market and macro policies on the national economy The control mechanism is expected to gradually increase and stock market valuations will become more rational. from the general trend, or the economic recovery and inflation is expected to drive the two stock market, as long as the macroeconomic policy was not sudden reversal, the stock market this year and next also is a passionate market, upward trend in severe shock.