Chapter 26 Chapter 26: The relationship between "pointing at mulberry and scolding mulberry tree" and the stock market and politics

In the section "Drawing from the Bottom", we have analyzed for readers that the most frequent and direct factors affecting stock prices are economic factors. In addition, there are political factors, and changes in the international situation will also cause the stock market to rise and fall sharply.In the decision-making of Western economic leaders, stocks are always regarded as important indicators in modern life.Some economists also believe that stocks are directly related to politics and wars, and theories about the close connection between stock market prices and economic crises, government cabinet scandals and imminent wars have emerged as the times require.

Stocks change with political and economic changes.Traditionally, stocks evolved from bonds, especially government bonds, and formed a form of securities with the gradual expansion of the western economy.At present, the head office of any country and region in the world pays close attention to stock prices. Similarly, the connection between stocks and political economy is very obvious. At the same time, stock prices are also very sensitive to war factors. Shares in stock markets around the world fell sharply three hours before the news of the multinational force's attack on Iraq, then rallied sharply when the war was expected to end quickly.For this reason, people call the stock market a barometer of economic conditions and political trends.

In October 1987, the U.S. stock market crashed.After the turmoil, some political scientists came forward one after another, blaming the partisan struggle in the US presidential election for the slump.Because 1988 was the year of the U.S. presidential election, when President Reagan was a Republican. If the Democratic Party wants to defeat the Republican Party and seize the long-lost presidential throne, it must first defeat Reagan, and it needs to start from the economic aspect that everyone cares about.Stocks have become a breakthrough for the Democrats. In the United States, most of the economic pillars of the Democratic Party are post-cooperative bosses on Wall Street.From the history of the United States, the financial resources of the Democratic Party are mainly funded by the eastern and southern consortiums, while the financial resources of the Republican Party are mostly in the western and northern regions.In order to recommend a political party that is beneficial to them, it was very easy for the eastern consortium to cause the stock market to plummet in 1987.According to relevant data, from 1913 to 1977 in the United States, the stock market prices of all Democratic presidents rose in the first year of their terms of office, while the stock market prices of Republican presidents all fell in the first year of their terms of office, with only a few exceptions.Regardless of whether this statistic is based or not, it at least tells people a rule that politics has a very important impact on stocks. If you ignore this, you will damage your own economy.

While there is no evidence that Democrats caused the stock price crash in 1987, it should be clear that when people's speculative attention turns to stocks, some political factors must be mixed in.At this time, if the influence of political factors on the stock market is not considered, the consequences will be disastrous. Society needs stocks to raise funds and develop the economy. However, with stocks there is speculation.In a sense, speculation is not a bad thing.I am afraid that those who do not understand politics and the specific situation will speculate blindly, which will lead to their own failure.Therefore, before entering the stock market, investors must collect some information on domestic and foreign political and economic conditions and trends. After entering the stock market, investors should also pay attention to the changes in the world at any time.There is a saying in China: "What do you shout for?" This sentence does not apply to the stock industry.Because the stock industry is all-encompassing, it is almost a microcosm of the entire society.It is difficult to be competent if you only have expertise in a certain aspect.Therefore, although stockholders have no intention of entering politics, they should also be aware of the world's political situation, and gradually develop their own insight and foresight in order to effectively control their stock market investments.As the saying goes: "The drunkard's meaning is not in the wine, but in the mountains and rivers." In "Thirty-six Strategies", this trick is called "pointing at the mulberry and scolding the tree".

"Referring to the mulberry and scolding the locust tree" is the second strategy in the fifth set of countermeasures in "Thirty-six Strategies". Yes, we must use vigilant means to induce and intimidate him.The way of strength, if used properly, can be supported and admired.To dispatch and control subordinates, if you only use benefits to win him over, it will make him suspicious, and you can get twice the result with half the effort by severely punishing others for their faults and secretly warning them. During the Spring and Autumn Period, Duke Huan of Qi used Guan Zhong as his chancellor, making the country rich and the people strong, and his troops strong and strong.Seeing that the time was ripe, he invited eight countries to form an alliance, intending to become the overlord of the Central Plains in one fell swoop.

Unexpectedly, the time for the alliance has come, and only four of the eight countries came, and Wei, Cao and other countries that were educated by Lu did not come to participate.Seeing that his majesty had been damaged, Duke Huan of Qi wanted to unite with other countries to crusade against Lu.Song Jun, who came to the alliance, saw that Duke Huan of Qi was so arrogant and dissatisfied, so he led his subordinates away.When Duke Huan heard the news, he became even more angry, and immediately ordered the army to be mobilized to attack Song State first. At this time, Guan Zhong persuaded Duke Huan of Qi to stop.He said: "Song is far away from Lu, and Lu does not come to form an alliance, so we should attack Lu first. In order to attack Lu, we can attack Zhu first. Zhu is a small country attached to Lu, so it is easy to attack. We attack Zhu The state of Lu, and the state of Lu must be very afraid. When the state of Lu submits to our country, the state of Song will be weak, and it will certainly be attached to me." Duke Huan of Qi then sent troops to attack the state of Zhu, and won the victory without any effort.When Lord Lu got the news that the country was extinct, he realized that the Qi army was really powerful. He quickly asked his men to prepare chariots and horses, and went to apologize to Duke Huan of Qi in person.As soon as Lord Lu moved, the monarchs of Wei and Cao also came to announce the crime to Qi Huan.As soon as Duke Huan saw that the great event was about to happen, he forgave the eight countries for their crimes of disrespect.When Song Jun saw that he was alone, he hurriedly asked Qi for reconciliation.As a result, in 678 BC, Qi, Song, Lu, Chen, Wei and other congresses allied together, and Duke Huan of Qi finally got his wish and became the overlord of the Central Plains.Guan Zhong's strategy, attacking a small country, can subdue the two powerful countries of Lu and Song. This is a typical "pointing at mulberry and scolding Huai".

It can be seen that in this plan, "cursing Huai" is the fundamental purpose, and "referring to mulberry" is just a means.Similarly, one of the main reasons for the changing situation in the stock market is the changing political situation. For this reason, the majority of investors need to grasp some new trends in the world's political arena as soon as possible through various channels, in order to help them make correct investment judgments , This is also "pointing at mulberry and scolding Huai". So, what are the political factors that investors should pay attention to?Political factors usually mainly refer to the vicissitudes of the country's current affairs and politics, as well as the major policies formulated by governments involving politics, economy, diplomacy, and military affairs.The impact of political factors on the stock market is often accidental and sudden.

The most common political influence on the stock market is the financial policies of various governments, such as taxes, interest rates, currencies, exchange rates, etc.For example: In 1990, the British government and the European Economic Community had serious differences in European integration.Then Prime Minister Margaret Thatcher accused the European Community of seriously damaging the interests of the United Kingdom in terms of agricultural subsidies, tax rates, and imports, and refused to sign the European Unified Currency Treaty.For a time, the European stock market fell rapidly, and the speed of response was unprecedented.Later, the Conservative Party elected a new leader, Major, as the Prime Minister of the United Kingdom, which calmed down the unhappiness between the United Kingdom and the European Community, and the European stock market basically returned to normal.The impact on the stock market from friction to reconciliation between the UK and the European Community fully demonstrates the great role of national economic policies on the stock market.

In addition, events such as regime change, leader change, government change, and presidential election are factors that affect the suddenness of the stock market.Back then, US President Eisenhower suffered a heart attack when he took office, and President Kennedy was assassinated and killed, which caused the New York stock market to suddenly plummet.Former U.S. President Reagan was assassinated by a crazy young man. Although he survived the catastrophe, it caused twists and turns in the international stock market. The "New York Times" opened up a column at that time, dispatched front-line reporters to stay in the hospital, grasped the first-hand information as soon as possible, published it in the newspaper as quickly as possible, and added the market changes of various stock markets around the world. It can be seen how closely the stock market and politics are connected.In the Taiwan stock market, due to the assassination of the king of an Arab country, investors feared that the leaders of Arab countries would change their oil policies, so they sold their stocks one after another, causing the stock price to plummet.

Various facts show that politics has a very direct impact on stocks and plays a very important role.Those who are interested in engaging in international stock trading, if they lack a comprehensive view of the political situation, in other words, if they cannot "point and blame" in advance, then they will inevitably suffer losses. When investors judge whether a stock market is healthy and developing normally, they should first look at whether the stock market has a good economic stability environment. The purpose of administration of any government in any country is nothing more than to strive to develop the economy and maintain economic stability and prosperity. Since 1992, the securities markets of Latin American countries have generally been active, and there has been a phenomenon of "unprecedented prosperity in the securities market" as described by the western press. scene.According to relevant statistics, in the first six months of 1992, the market index of Latin American stock exchanges rose by 75%, ranking first in the world, far surpassing the New York, Tokyo and London stock exchanges.The daily turnover of the Buenos Aires Stock Exchange in Argentina reached 60 million US dollars, the daily turnover of the Brazilian stock exchange reached 62 million US dollars, and the daily turnover of Venezuelan securities increased from 500,000 US dollars in 1989 to the current 6 million. Dollar.

According to expert analysis, in addition to the fundamental factor of profit, Latin American securities are attractive for the following reasons: First of all, the political situation in Latin America is stable, the economy has begun to improve, and the investment environment has improved significantly.International institutions such as the Latin American Economic Commission and the Inter-American Development Bank all predict that the Latin American economy will have considerable development in the 1990s. Secondly, economic opening has become the current economic dominant policy of Latin American countries. Countries have reduced tariffs and established small regional free trade zones to promote economic development.An outward-looking development model is replacing the decades-old inward-looking development model.This shift opens up new opportunities for foreign investors. In addition, due to the heavy burden of foreign debts, Latin American countries feel that they are short of funds for development. They have successively adopted measures to encourage foreign investment and the return of domestic evasion capital, allowing foreign capital to buy part or all of local enterprises. From the example of the active stock market in Latin America, we can see the effect of the government's economic policy on the stock market.However, compared with the stock markets of the United States, Japan, Germany and other countries, the Latin American stock market has to consider itself a junior.It is generally believed that the United States, Japan, and Germany occupy the center of the world economy.Due to historical reasons, these three countries have different influences on the world stock market. From the perspective of the United States, although its economic development has declined in the past 80 years, it can still be called the locomotive of the world economy.No matter in terms of size and strength, the US economy occupies a pivotal position in the world economy, trade and international finance.Therefore, the quality of the US economy directly affects the changes in international stock market prices.Japan and Germany were originally defeated countries in the Second World War, but due to the rapid economic development in recent decades, their financial strength has greatly increased.The main foreign battlefields of Japanese economy and finance are the United States, Asia and the Middle East, while the main foreign battlefields of German economy and finance are Western Europe, the United States, Eastern Europe and the Middle East.Due to the characteristics of regional exchanges, Japan and Germany have relatively greater influence on their own economic zones. Judging from the above analysis, people who operate international stocks such as Quan lack a series of understanding of the world economy, so it is absolutely impossible to grasp a good opportunity in the stock market.This requires investors to make preparations - "pointing and scolding".