May 7, 2023 is a Sunday, and it is a rainy day in Pengshi, so it is inconvenient to go out to play, so Zhang Sheng went to Yuansheng's house to talk about the stock market............................................................................................................................

Zhang Sheng: This year's stock market is very special, especially since April, the daily trading volume of A-shares has been between 1 and 1.2 trillion yuan. Such a large volume of trading volume has only occurred in May 2015............................. With such a large trading volume, why does the index keep fluctuating around 3200 points? Didn't see a bull market?

Yuansheng: First, there are now close to 5,200 A-share stocks, and 30 new stocks are added every month. The number of stocks is increasing, and if the collective pushes up, more and more funds will be needed.

Second, in the first speech of the village chief in office, there was a sentence that it was impossible for the index to rise sharply during his tenure, and his sentence was: If the stock market does not rise sharply, it will not lead to a sharp decline.........

Third, in the past, the A-share index fluctuated sharply, which made institutions suffer, but now, institutions and managers have learned smart: the market (index) must be stable, but the bull market of individual stocks is completely okay. Combining the above three factors, in recent years, the index has basically stabilized at around 3,200 points, without outstanding performance, but in the last wave of new energy market, the leading stock BYD rose 30 times, and CATL rose 20 times. Many lithium battery stocks have risen 10-30 times.

In the first four months of this year, Cambrian rose by about 5 times, BIWIN Storage rose by more than 5 times, Cambridge Technology rose by more than 5 times, and Zhongji InnoLight rose by more than 3 times................. Many aspects of AI have risen 1-3 times.

Zhang Sheng: Yes, smart people have seen that the biggest feature of A-shares in recent years is that the index is relatively stable and there is no big risk; And stocks that are in the wind (hot spots) are very easy to rise several times.

Yuansheng: Yes, now A-shares are becoming more and more mature, and the index is basically stable, but if you want to make money in A-shares, you must follow the hot spots and follow the trend, so it is easy to make money. Otherwise, if you buy non-hot stocks, or stocks that have passed out, even if they were hot before, it will be difficult to rise. For example, the new energy sector was a hot plate in the early years, and the people who bought it made more money the more they guarded, but after 2023, the new energy sector is one of the most difficult sectors, and the bear road is slowly ............. This is one of the characteristics of the stock market, feng shui is rotated.

Zhang Sheng: In the stock market, what kind of stocks are easier to buy?

Yuansheng: Tell a true story, maybe you can get inspired------- When Su * Electric was listed in 2004, it had only more than 10 stores, and the annual net profit was about 100 million yuan (the specific figure was forgotten), so it opened at 29.88 yuan on the first day of listing, and everyone thought it was too high. I am a person who specializes in new stocks, and when I see it go up, I also buy a small amount of it, and I make money after N days and clear my position.

When it was still 38 yuan, a friend from the securities company told me that his classmates in the * gold company predicted that the stock would rise to 80 yuan, at that time, I didn't believe it, because there are also supermarket chains in my hometown, which are also listed companies, and they have been listed for several years, and they have not risen. Why can Su * Electric Appliances rise so violently?

N months later, Su * Electric really rose to more than 80 yuan, and a friend of the securities company said: His classmates in * Jin Company predicted that after the stock was 10 shares and 10 shares, it became more than 40 yuan, and then slowly rose, and then rose to more than 80 yuan, which will fill the right! I'm still not convinced............ Because most people's cognition is limited to the time and space they have lived and experienced. In my hometown in 2002, there was the first supermarket chain listed company to open a branch, I observed it for N years, its stock price did not rise, Su * electrical appliances are also chain, it is impossible to rise so fiercely!

The final result was that by August 30, 2007, Su * Electric rose to 1,200 yuan (compound price), which increased more than 40 times in more than 4 years. At this time, I traveled to a city in Northeast China and saw that the chain stores of Su * Electric Appliances were opened all over the Northeast and all over China, with more than 5,000 chain stores at the peak and an annual net profit of more than 4 billion yuan.

The supermarket chain, the first supermarket chain to be listed on the A-share market, rarely opened branches in the country, and after listing, its annual net profit did not increase much, so its stock price did not rise much. The Su* Electric Appliance has increased from more than 10 stores in the early days of listing to more than 5,000 stores, and the annual net profit has increased from more than 100 million yuan to more than 4 billion yuan, so it is reasonable that its stock price has risen 40 times.

Why can the people of *Jin Company predict in advance that Su* Electric will continue to rise? I think: it is likely that he or his company's researchers must have visited Su * Electric for field research, and knew in advance about Su * Electric's plan to continue to open more stores............ At that time, China's economy was on the rise, and there was probably only Su * Electric Appliances at that time when the electrical appliance chain was made, so the more stores it opened, the more net profits it had, and the stock price would naturally rise, which was one of the passwords of the stock market wealth.

Zhang Sheng: Yes, net profit is rising every year, and the stock price is likely to rise every year. You see that Kweichow Moutai has risen more than 550 times since its listing, and the current price-earnings ratio is also 26.4 times, which is not high. Looking at Yunnan Baiyao, it has risen more than 1,500 times since its listing, and the current price-earnings ratio is also 17.4 times. Look at Luzhou Laojiao, which has risen 1459 times (the stock price has risen from 5.7 yuan to 8321 yuan), even if the current compound price is 5921 yuan, however, its price-earnings ratio is only 22.2 times.

Yuansheng: That is to say, after these stocks have risen hundreds of times, and after more than 1,000 times, the price-earnings ratio is also relatively reasonable, so their stock prices are relatively strong. However, Su* Electric has dropped from a peak annual net profit of more than 4 billion yuan to a loss of 178 million yuan in 2022, so its current stock price is only 2.10 yuan.

Mr. Zhang: After comparing these data with stock prices, we can probably understand some of the secrets of the rise and fall of A-share stock prices.....................................................................

Yuansheng: Yes, there is a law to the rise and fall of stock prices, who can understand the law in advance, when the stock is still at a low level, or at the beginning of the rise, you should buy, and when it rises to a certain extent, you should sell, and transfer the risk (or return) to others, so as to keep yourself as the winner of the stock market.

Tomorrow is Week 1, how will the stock market perform? It's worth the wait.