Zhu Weisha October 9, 2024

The stock market represents a company's value, which is valued based on its possible profit prospects. Compared with the world's stock market, China's and Hong Kong's stocks are both undervalued. Why are they undervalued? Their prospects are not optimistic.

The rescue measures are aimed at the stock market, but there is no overall economic revitalization plan; the prospects are unclear. Value investors cannot see the future value prospects and choose to exit. It is the view of the Hong Kong stock market.

For speculators, when a large amount of capital inflows break the balance of funds, the rise is certain. Although the prospects are uncertain, the stock market does not see investment value but has speculative value. The three positive lines of the market expect a reversal. That is, the rise of the market is not determined by the value and prospects of the company but only by the market sentiment. The case of the crypto coin market can prove this.

The rise of the air or Meme coin in the crypto market does not need a reason. It has no fundamentals. The rise is the reason for mobilizing market sentiment. The rise's height and speed depend on the maker's strength. The end of the rising cycle depends on whether the dealer has finished selling. In the crypto market, this cycle ends in one month because the emotions of speculators cannot last for a long time.

The stock market is not a pure air coin, it has fundamentals. It is like Bitcoin in the crypto circle. The rise of Bitcoin is equivalent to the entry of funds from the currency circle. The profits from the rise of Bitcoin overflow to the altcoins, bringing the rise of altcoins, and then the altcoins are leveraged, the dealers sell goods, the price falls, and retail investors avoid liquidation by selling Bitcoin to cover their positions. When Bitcoin falls, the leverage is pulled again, the market ends, and the crypto market returns to the long road of value return in the bear market. Bitcoin has been hovering at the bottom of computing power, waiting for the next halving hype opportunity.

Bitcoin has a bottom but no fundamentals, and the stock market still has fundamentals. After getting the money, the dealer (enterprise) can improve the fundamentals. It will bring about improvements in fundamentals, which will increase the valuation of enterprises, from bearish valuations to bullish valuations, and the value of enterprises will increase significantly. It is the virtuous cycle we expect. But will this cycle appear? Without an overall plan, the prospects are unclear, and the market needs to be viewed as emotional.

The Bitcoin system is not an ecosystem and has no controller, while the stock market is equivalent to a part of a centralized altcoin ecosystem with a controller. The market can be regulated through currency price and volume as long as the controller's currency can be issued. It is valid for China and the United States. US regulation must take into account the global impact. The external impact is minimized when the RMB overseas has recovered a lot. Just play in your closed door.

The controller theoretically controls the rise and fall of prices. The 500 billion yuan of the enterprise owner's money is insufficient to give 1 trillion yuan. The question is whether the money earned by the enterprise owner can be used to rescue the enterprise entity. The surge corresponds to the plunge. If the rise time is not enough, everything is a bubble.

Emotional value is easy to pass. The stock market is a voting machine in the short term and a weighing machine in the long term. Whether the entity improves will take at least 6 months to take effect gradually. The Chinese stock market can survive 6 months.

Emotional value is not confidence. Hong Kong stocks and A shares have gone out of contradictory trends. Hong Kong stocks look at the expectations of fundamentals, and A shares look at the emotional side. One is short-term, and the other is long-term.

Short-term strategies and long-term strategies are completely different. The vast majority of people who survive in the cryptocurrency market are speculators because most of the cryptocurrency market consists of air coins, most of which only have an emotional value.

https://chainless.hk/2024/10/09/chinas-stock-market-and-sentiment-value/

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