This week, the market has fallen sharply as I expected. You must be feeling sour right now, right? Especially the new shareholders who only entered the market at 4,000 points, they were still looking forward to making a windfall, but now they are estimated to lose their faces.

There's a lot to say this week, so I'll just say the same.

First of all, why was I able to predict this decline in advance?

I am neither a god nor a half-immortal, and I have no powers for an unpredictable prophet. The reason why I was able to anticipate this decline a week or two in advance is that it is actually just an imitation.

History is always repeating, and although there are always some differences in the details, it is always so familiar in many ways.

For example, the new investors who entered the market this year, their mentality, their performance, is actually the same as that of the investors at that time in 2007 or even 2000.

Even the CSRC and the media's warnings of stock market risks are very similar to those of the year. I doubt that the reporters who wrote the article from 8 years ago were posted as they were by changing the date and the big inventory.

So recently, many newcomers have asked me, what books should I read to learn to trade stocks? I can tell you solemnly, look at the history of finance.

If you thoroughly study the financial history of China for more than 20 years, as well as the financial history of the world for nearly a century, you will find how simple it is to predict the market.

Eighty percent of what is happening in China's stock market, and what is happening in China's economy, is repeating the past.

For example, in 2006~2007, the stock market walked out of the main rising wave, and now the market is also in the main rising wave, in February 2007, the market rushed to 2900 points, there was a 2-month correction, the correction range was as high as 15%.

After the adjustment, the market continued to rise to 4300 until the 530 event broke out, this wave started at 1700 points, and the market that ended at 4300 points was the main rising wave of the year.

This time it was actually the same, the market lacked momentum after rushing to 4,500 points and needed to be adjusted, so the big drop came.

According to the experience of 2007, the current wave of market decline, the adjustment range is expected to be 10% ~ 15%, that is, 3900 points to 4100 points.

I don't have the ability to guess where and when the market will adjust in the end, but the only thing I know is that after this wave of adjustment, the market will begin the second half of the main rising wave, and if nothing else, it is only a matter of time before the all-time high of 6124 points is broken.

Therefore, for long-term investors, there is no need to worry about whether the market will fall by another 1 or 200 points. In 2008, I predicted that the market would fall to 1,500 points, and the market ended up falling at 1,664 points.

Because of this error of more than 100 points, I almost missed a wave of doubling market in 09 years. Everyone is a smart person, and there should be no need to say much about the following.

Here's a little trick, during the bull market in 07, whenever new shares were subscribed, the market would always be adjusted, and when the subscription funds were unfrozen, the market began to rise, and the situation today is actually the same as back then. For short-term friends, this should be a more important basis for judgment.

After talking about the market, it's time to talk about individual stocks. One of the biggest problems in front of everyone now is how to choose stocks.

For stock selection, old investors have their own set of methods, and of course I have them. As for whether the method is good or not, this is a matter of opinion.

After so many years of analysis and research, I have found that the most important point of stock selection in the Chinese stock market in a bull market is expectations. It is not the expectation of the trend, but the expectation of the performance of the future development of the enterprise.

Although there is almost no concept of value investment in China's stock market, there are still performance expectations, and of course whether these expectations are reliable is another matter. After all, the quality of China's retail investors is too low, analysts believe everything they say, and their predictions are too accurate.

So what is the principle of the expectation of a stock's future performance and the performance of the stock price in the Chinese stock market? I'll give you an example.

The exam paper with a full score of 100 points, during the midterm exam, Xiao Ming scored 70 points, and in the final exam, because of his own efforts and the relatively simple questions, he scored 90 points. So please predict how many points Xiao Ming will take in the next exam?

If you don't answer this question correctly, it means that you don't understand how China's stock market works.

If you predict 70, 80, 90, 95...... I'm sorry for all of them being answered incorrectly.

The correct answer is 110 points.

Seeing this answer, do you have 10,000 grass and mud horses galloping in your heart? If you want to curse, that's right, only a few people in the stock market can guess the answer correctly, and most people are just waiting for the leeks to be harvested.

Why is the answer 110 points? Because Xiao Ming scored 70 points in the first exam and 90 points in the second exam, that is, Xiao Ming scored 20 points more in the second exam than the first time, so Xiao Ming will score 20 points more in the next exam than this time. 90+20=110

You see, you didn't get such a simple elementary school question right, so you better stop trading stocks.

You may scold, how do you get 110 points out of a 100-point exam paper? Also, is 70 to 90 and 90 up the same concept?

I know that people who can read my square characters have graduated from junior high school, but the vast majority of investors in the Chinese stock market have not even graduated from elementary school.

So the complex logic you mentioned is incomprehensible to everyone in the Chinese story.

The highest level that Chinese investors can understand is 90 + 20 = 110

As for how the 110 points are tested, there are naturally analysts to explain, such as 20 points of additional questions, or the test has become a 150-point system......

In the past two days, some of my friends on the Internet have been calculating the price-earnings ratio and price-to-book ratio, and what color rating has been made, red, orange, yellow, green, blue, purple.

I don't understand these complicated things, and Chinese investors basically don't understand these things, and as for institutions, they don't look at these things at all.

China's stock market never looks at the price-earnings ratio, everyone only looks at the dream ratio. Therefore, if you look at the price-earnings ratio and speculate in stocks, of course, you will not lose money, but you will definitely not make much money.

So how is this market dream rate calculated? I'll give you another question.

Let's say the average P/E ratio of an industry in the stock market is 20x.

The latest annual earnings per share of two stocks in this industry are 1 yuan, one of the stocks last year was 0.9 yuan per share, and the second stock last year was 0.5 yuan per share, so they are now at a reasonable price.

Friends who look at the price-to-earnings ratio will definitely say that the share price of both stocks is 20 yuan, or the price of the second stock is slightly higher.

But in fact, this is not the case with the market dream rate of China's stock market.

The correct answer is that the second stock is expected to increase its future performance significantly because of the substantial increase in profits, so it is given an evaluation of 35 yuan.

And what about the first stock? 20 yuan? 25 yuan? It's all wrong!

So you didn't learn math well in primary school, didn't I just say it, the average price-earnings ratio of the industry is 20 times.

The price of the second stock is 35 yuan, corresponding to 35 times the price-earnings ratio, and the price of the first stock should be averaged by the two:

（35+x）/2=20

So the answer is 5 bucks.

This is the correct algorithm for the market dream rate.

Are you still wondering why the prices of GEM are soaring, while the stock prices of bank stocks are still sleeping on the floor?

Here's why. The performance of the GEM fluctuates greatly, and next year's performance can be blown casually, and bank stocks, how much money will be made next year or even the year after, now I can tell you inseparable. It's too transparent, and there's no hazy feeling at all, so the stock price is only worthy of sleeping on the floor.

Speaking of which, it should be clear to everyone that in China's bull market, please forget about the price-to-earnings ratio and everything, there is only one thing you need to know, and that is the profit growth of the stock in the next quarter, or just the expected growth that everyone speculates about.

If you expect a stock to perform at a high rate in the future, don't hesitate to buy it.

If there is a stock in the stock market that advertises stable performance, high dividends, and low valuation, this is tantamount to telling you that this stock is very bad, very bad, super poor.

If you don't want to underperform the market, don't buy it. This method can be used in the U.S. stock market, but not in the Chinese stock market.

Finally, I will tell you how to expect the future performance changes of a stock.

For performance forecasting, this is a very esoteric science, it is really not easy to say, I will give you a few chestnuts today.

First of all, friends who have added me to the QQ group must know that I predicted last week that Hainan Airlines' 2015 first quarter report will increase significantly.

As a result, the quarterly report disclosed a year-on-year increase of more than 400%, and the stock gapped, opening more than 3 points higher on the second day of the performance disclosure. Of course, after that, due to the plunge in the broader market, the stock price plummeted. But you can't deny that in just a few months, HNA's stock price has skyrocketed by more than 100%.

And this skyrocketing is actually because everyone has long expected that the performance of this stock will increase significantly. In other words, when the quarterly report is disclosed, it is actually a good outcome, and of course it begins to fall.

Judging the performance of an airline stock is too simple, you only need to pay attention to one thing, and that is the international oil price.

More than half of the operating costs of airline stocks are spent on jet gasoline, so even the slightest change in oil prices can have a huge impact on their stock price.

As we all know, in 2014, the international crude oil price was halved from 100 yuan to 50 yuan. It is still hovering around 50 blocks.

Therefore, in fact, it is inevitable that the performance of airline stocks will increase significantly and the stock price will skyrocket.

In addition to airline stocks, shipping stocks are also very sensitive to oil prices. For example, China COSCO, COSCO Shipping and the like.

Oh, and of course shipping stocks also have the Belt and Road concept. So even if I don't look at it, I can guess that the price of shipping stocks must be turned upside down.

The reasons for the growth of performance in different industries are different, such as brokerage stocks, as soon as the stock market turnover is high, the performance increases.

For example, banks, the central bank has started the money printing machine, and the performance of the bank can be expected.

Then the rest of the work is your own, according to your analysis, in the next six months and a year, which industry performance is expected to grow significantly (such as aviation brokerages that have grown significantly)?

Calm down and analyze one industry at a time. Make a list of the factors that have the greatest impact on performance in each industry, and then pay attention to changes in those factors.

For example, in the later stage of the bull market, resource stocks such as Coal Fei, Sewu and other stocks are generally speculated. Then you can start paying attention to the price of coal and non-ferrous metal futures in the futures market now.

If the price of the futures market rises sharply, everyone will know next.

That's all for today, Jing Ke assassinated the King of Qin......

This book was first published from 17k, the first time to see the genuine content!

#includevirtual="/fragment/6/3236.html".qrcode{width:590px; margin:0auto; background:#fff; border:1pxsolidc; padding:15px20px; overflow:hidden; }.qrcodeimg{float:left; }.qrcodeul{margin-left:120px; font:14px/1.5"microsoftyahei"; padding-left:15px; }.qrcodeli{list-style:square; margin-bottom:5px; }

Scan the QR code to pay attention to the 17k official WeChat, and the latest chapters can also be seen on WeChat! Click on the + number in the upper right corner of WeChat, select Add Friends, and search for the official account "wap_17k" to follow us. Reply to "Grand Prize + Your QQ Number" to participate in the event. 10 iPhone6, 10,000 QQ members are waiting for you!