Chapter 6 Chapter 6 "Calling the East to the West" and the Manipulation of Stock Prices

Someone once compared the stock market to a battlefield, which is appropriate. Because they are ever-changing, and there will be situations that make you unpredictable at any time.However, there are probably two most common changes in the stock market: one is the change of the stock price, and the other is the change of the sentiment of all beings in the stock market.Undoubtedly, the former determines the latter. Faced with the same change in the stock price, some people will dance with joy and joy, while others will be dejected and miserable.It can be seen how important stock price changes are to investors.Therefore, when you are going to get involved in the stock market, you should first learn to judge the trend of stock prices.To master this basic technique, one must have an understanding of the main factors that affect stock prices.Stock price change is a very complicated problem.There are many factors that affect stock prices, the most frequent and direct ones are economic factors, in addition to political factors.These are not surprising.For beginners, the most puzzling thing is probably the phenomenon of "artificial manipulation of stock prices".

Here, investors can be warned that stock price manipulation in the stock market seriously violates the fair principle of free competition. Therefore, all countries strictly prohibit manipulation.However, in my country, the stock market has just started, so the phenomenon of stock price manipulation is inevitable. For example, such a thing happened in Shanghai: a certain person took advantage of his work to grasp the situation that a listed joint-stock company would soon go bankrupt, and first listed it in the market. They bought a large number of their stocks on the Internet, causing the price to skyrocket, and then quickly sold them out, causing most investors to be deceived and suffer losses.In this case, it is an unfair transaction.At present, there is no securities trading law in our country to restrict this illegal behavior, so this phenomenon will still happen.For small and medium-sized investors, in order to prevent them from falling into the trap of harming others and benefiting themselves, they must understand this illegal behavior so that they will not be used by others when they encounter similar situations in practice in the future.In a word, it is necessary to "prevent problems before they happen".

Usually the so-called "manipulation" must be a group, such as a foreign consortium, foundation, investment salon, company board of directors and other organizations, using huge power, including huge amounts of money, knowledgeable and intelligent experts, etc.To raise or lower the stock price as a means to achieve the purpose of taking profits.You know, in the general securities market, it is very difficult for one person to manipulate the stock market. The most common and commonly seen manipulation of stock markets in various places is to use the stock market to buy in large quantities at low prices when the stock market is weak, and then try to drive up prices in order to "introduce low and sell high" in order to achieve the purpose of obtaining huge profits.In the process of pumping up, it is necessary to continue to buy, and at the same time launch all kinds of plausible rumors to lure retail investors into the money, so that the market forms a "good" atmosphere.When the stock price reaches a certain peak, sell it quietly, achieving the goal of low entry and high exit.On the contrary, it is natural to keep selling when the stock price is at its peak, and try to lower the market, causing a downturn, and then buy at a low price, so as to achieve the purpose of "going high and buying low".

No matter whether it is driving up the market or lowing the market, it is necessary to create a market environment that is conducive to tempting retail investors to follow blindly, and then the purpose of manipulating stock prices can be achieved.Manipulative groups are often the foresight of the stock market, so the ones who suffer in the end are always blind investors. There are many techniques for manipulating stock prices, and new techniques are constantly being introduced as they change. Investors must understand them before they can deal with them in the stock market.The most common are:

Issuing company personnel who know the company's facts earlier than ordinary people collude with brokers, first buy or sell, then disclose the company's facts, affect stock price changes, and then sell or buy back to achieve the goal. Open accounts in several different securities companies, set prices in a "see-saw" manner, and even collude with brokers to create a situation that is beneficial to oneself; If there are similar stocks in the market that rise and fall at the same time, choose those with a small number of shares or small balances that are easy to manipulate, and use the method of shaming, so that many investors blindly follow the trend and achieve price increases;

A group uses different personal identities to open two or more accounts, and repeatedly "prices" through mutual offset transfers, only paying a small amount of handling fees and transaction taxes, and can easily raise or lower the stock price at will; In the past, there were "routine transactions", using the gap between the "day" and "routine" to sell the spot on the day and buy the regular futures, or buy the "day" and sell the "routine" to create a market ; Continuous small-amount trading, with the method of "high in and low out", or "low in and high out", repeatedly doing it, losing a small amount of money to achieve the purpose of lowering or raising the stock price;

In a market with a credit trading system, a certain ratio of "margin" can be used to expand credit, buy more or borrow shares to sell, and increase the pressure on stock prices to rise or fall. Taking advantage of the market psychology of the ups and downs of the stock market, you can buy in a lot when the price is low, and then use various external factors to try to drive it up, so as to achieve low entry and high exit, and get huge profits; or sell it first when the price is high, and then cause When the wind falls, buy it back when the price reaches a low price; Choose the same nature or the same type of stocks, drive up or hit the weaker one, so that it gradually expands into an optimistic or pessimistic atmosphere for the entire same type of stocks, in order to drive out its conspiracy.

Although the above-mentioned methods have many names, they can be summed up in four words: "Speeding east and attacking west".Fake it first, make a big public opinion that is beneficial to yourself, and induce investors to choose the wrong investment direction, and then turn east and west, and get huge profits from it. "Strike east and attack west" is the sixth strategy in the first set of victory strategies in "Thirty-Six Strategies". "The enemy's ambitions are chaotic, and there is no danger. The image of Kun Xia is exchanged with the upper one, and it is involuntary to take advantage of it."

This strategy is to use false appearances to create the illusion of the enemy's daring to disguise the direction of the attack.Kun is the land, and Dui is the Ze.Kun Bian Fu Shang means that the water is higher than the ground.When the enemy's command is chaotic and the whole army bumps into each other randomly, they lose the ability to judge the situation and defend themselves.If the enemy is chaotic, we will win, but if the enemy's will is not chaotic, this strategy cannot be used.The art of war must be used flexibly.Suddenly east and west, hit and leave.If you don't attack, show it to attack, if you want to attack, show it that you won't attack; if it seems inevitable but not, if it seems impossible, it is inevitable; When the judgment is confused, our army will use this strategy according to the situation, and the enemy will surely win the victory by surprise.

At the end of the Eastern Han Dynasty, warlords fought in chaos, and two major military groups headed by Yuan Shao and Cao Cao emerged in the north.In 200 A.D., Yuan Shao mobilized 100,000 troops and 10,000 horses to attack Xudu, Cao Cao's headquarters. Prepare to meet Yuan Shao. As soon as the battle curtain opened, Yuan Shao wanted to put Cao Cao to death by relying on his large number of troops and strong generals.He ordered Yan Liang, a famous general in Hebei, to take 10,000 troops to capture Cao Jun's strategically important Baima City (in the northeast of Huaxian County, Henan Province), in order to cut off Cao Jun's retreat, and then attack back and forth, defeating Cao Jun in one fell swoop.Yan Liang was the most powerful general under Yuan Shao's tent, and he fought extremely fiercely. Liu Yan, the white horse guard, couldn't resist, so he sent a fast horse to Cao Cao for help.

Cao Cao received the emergency battle report and hurriedly summoned his advisers to discuss countermeasures.Some people suggested dividing up the troops to rescue the white horse, but Cao Cao's men did not have many soldiers. Dividing up the troops would make the strength even weaker.At a time when they couldn't agree on what to do, Xun You, a think-tank, presented a clever strategy to defeat the West.He said: "Yuan Shao's old nest is in Yecheng. My lord first made a gesture of crossing the Yellow River to attack Yecheng. Yuan Shao will definitely send troops back to help, and I seem to be able to take this opportunity to send elite troops to attack Yuan's army that is besieging Baima City." Immediately sent troops to Yanjin (now north of Yanjin County, Henan Province) to make the illusion of crossing the river.Yuan Shao didn't know what the plan was, and thought that Cao Cao was going to attack Yecheng by crossing the river, so he immediately assembled his troops to meet the enemy in Yanjin. As soon as Cao Cao saw that Yuan Shao had hit the trick, he immediately dispatched a group of elite Qing cavalry, led by tiger generals Guan Yu and Zhang Liao, to Baima City day and night.When Cao Jun came to a place more than ten miles away from Baima City, Yan Liang realized it and hurriedly mounted his horse to fight.Guan Yu rushed into Yuan Jun's formation unexpectedly, raised his knife and fell, beheading Yan Liang under his horse.The commander-in-chief was killed, and Yuan Jun was in chaos immediately. Some were killed, some were captured, some fled, and the siege of the white horse was broken.However, Yuan Shao led his army to Yanjin, but there was no trace of Cao Jun, so he realized that he had been tricked. When he returned to aid the White Horse, the news that Yan Liang was beheaded and the entire siege army was wiped out had already come. . "Calling the east and attacking the west" is used in military affairs, the purpose is to divert the enemy's target, make it unprepared, and then take advantage of it by surprise and attack the unprepared.That is to say, for any matter, in order to eliminate the current artificial resistance and reduce one's own losses, one must disperse the opponent's strength or relax his will, so that he can take advantage of the vacancy and achieve his goal. This is understandable.But unfortunately, some unscrupulous speculators in the stock market, in order to achieve the goal of harming others and benefiting themselves, have resorted to the methods of "striking the east and the west", such as creating rumors, confusing the public, increasing people's concerns, and bewildering their will, etc., to engage in stock price manipulation. Many investors went bankrupt and complained endlessly. It is really sad that the ancient Chinese military strategy was used for illegal stock market speculation! As mentioned above, the manipulation of stock prices in the stock market seriously violates the fair principle of free competition. Therefore, various countries have strictly prohibited the manipulation and adopted various regulations.Regrettably, instead of eradicating this phenomenon, it became more and more rampant, and even involved state dignitaries.The Indian stock market scandal that was exposed not long ago is an example. Mumbai is the second largest city in India. Since the East India Company era, this city has become the most important commercial and financial center in India.Dozens of banks and financial institutions are located on Dalal Street in the city, making this street known as "India's Wall Street". In October 1991, in order to promote economic reform, the Rao government of India announced to raise bank interest rates and open securities and stock markets.The skyrocketing stock market has attracted more and more people to join the ranks of the stock market.People took out their hard-earned money and came to the stock exchange one after another.The stock index is like a runaway wild horse, rising higher and higher: 1000 points, 2000 points, 3000 points, 4000 points... Shareholders who believe that stocks can make a fortune are rushing to buy like a demon, lest they miss this express train to get rich. By the end of April 1992, when the truth of the matter was disclosed, the stock index fell from 4163 points to 3086 points, and some stocks even plummeted by 50% and 90%, and hundreds of thousands of small shareholders lost 6000 in 3 weeks. - 300 billion rupees, even - some big banks with deep pockets have lost hundreds of millions of dollars. According to reports, the stock market scandal involved an amount of 300 billion rupees, involving dozens of banks, including State Bank of India, National Housing Bank, United Commercial Bank and other large state-owned banks, Standard Chartered Bank, Greendale Bank, etc. , Citibank and other famous foreign bank branches.In addition, there are a large number of private banks with a large amount of money and a wide range of areas involved, which can be called the biggest financial scandal in Indian history! After the incident, a group of senior bank executives, including the president of the State Bank of India, were removed from their posts and investigated, or forced to resign; Resign.Opposition parties such as the People's Party and the Bharatiya Janata Party took the opportunity to accuse the government of being responsible for this and threatened to file a motion of no confidence against the Rao government.Prime Minister Rao said that any minister involved in the case would be dismissed.He also asked each minister to declare whether he and his family members had bought shares related to the case. The case is still under development, but the central figure in the case has been exposed, and he is the stock market king Harshidi Mehta.Known as "Mai Million".So, by what means did this "Mile Million" direct the biggest financial scandal in Indian history?See the next section, "Building something out of nothing."