Chapter 9 Lecture 8: Who is in charge of the ups and downs of the stock market?

The story bubble, property market bubble, inflation, and even rising RMB exchange rate in China today are not at all due to excess liquidity, but because today's Chinese economy is a dual economy that is unprecedented and unique in the world. What is dual economy?That is, 30% of our entire economy is overheated and 70% is overcooled.Which sectors are overheating?Basically, securities, banking, real estate, steel, cement and other sectors are overheated.Which sectors are supercooled?Those who did not enter the securities company to engage in business, especially the manufacturing industry, this part is too cold.In other words, under the dual economic environment, China's economy is both overheated and overcooled, with 30% overheating and 70% undercooling.What really drives our economic development are those overheated sectors, that is, the sectors related to the local government's promotion of GDP projects, and this investment-driven economic growth development model is what we see today.

That is to say, sectors such as real estate, cement, steel, political performance engineering, image engineering, and banks and securities companies that finance them are overheated and rapidly expanding, while the other 70% are overcooled. This phenomenon is called a dual economy. . Where is the crux of the problem in China's stock market? Today, all the focus of China's stock market is focused on one question, that is, where is the crux of the problem of whether to admit or not to China's stock market?In my opinion, all the focus of China's stock market is focused on one issue, that is, whether to admit that there were major mistakes in the share reform, and whether to admit that the share reform has huge sequelae?In my opinion, there were not only mistakes in share reform, but also major and even fatal mistakes.There are three main aspects to this error:

First, the shareholding reform is far from enough to compensate shareholders of tradable shares who have made great contributions to the development of China's stock market for a long time but have suffered major damage in the operation of the market. There are too many and too heavy protections for shareholders, and as a result, two skins are peeled off from the sheep of tradable shareholders: both are hurt by the share split and are hurt by the resolution of the share split.Non-tradable shares cannot be listed. This is the contract signed between major shareholders and tradable shareholders of all listed companies when they go public. To change this contract in the reform of share structure, non-tradable shareholders must spend money to buy tradable rights. Shareholders spend an average of 8 yuan to buy listed stocks, and the cost of non-tradable shares is less than 1 yuan. The reform of share structure allows major shareholders to obtain tradable rights at a meager cost. It is really a big deal. joke.The excessive speculative mentality formed by shareholders of tradable shares in a bull market environment has also laid the root of today's super bear market.

Second, the time for unlocking the size is too short and the time for unlocking is too concentrated, which is an important reason for the serious imbalance between supply and demand in the market.At the beginning of the announcement of the share structure reform plan, I made suggestions to the management many times, or greatly extend the lifting period for large and small non-tradable transactions, or high consideration and fast circulation (non-tradable shares should be reduced by at least three shares), especially not Focus on lifting the ban within one or two years, otherwise the stock market will slide into the abyss during the lifting period.However, these suggestions of mine were not adopted by the management. In the following two years of bull market, the management was even very popular and highly praised by some investors. There was even such a thing as "three years of silence, one blockbuster", which was almost nasty in the authoritative media. touted.

Third, before the share structure reform was completed, the old and new divisions were hastily implemented and a large number of heavyweight shares were invested, which led to the formation of a huge number of unlocked shares. Highly overlapped, the number of lifted shares is more than three times that of the original share reform. As a result, the supply of stocks in the Chinese stock market increased sharply within three years and completely changed the supply and demand relationship in the entire market, completely destroying the Chinese stock market. The valuation system has completely messed up the development expectations of China's stock market, leading to the tragic situation in the market that is hard to return to today.

Since 2006, a dual economic structure has existed, that is to say, 20% to 30% of the economy is overheated, and 70% to 80% of the economy is too cold.Think about it again, since the macro-control policy in 2006, we have been regulating for four years. Starting from 2003 and 2004, how did the four-year macro-control regulate?Either raising interest rates or raising bank deposit reserve ratios, these two policies are helpful in alleviating excess liquidity, but they are a blow to what I call a dual economy.Think about it, when the government raises interest rates, or raises bank deposit reserve ratios, and withdraws a large amount of liquidity, what kind of blow will it have on entrepreneurs in these overcooled sectors?So the money that should have been invested in the industry was used to speculate in stocks and real estate.

The stock price rose sharply in 2006, because the government raised interest rates and deposit reserve ratios, which made entrepreneurs in the super-cooled sector no longer want to work, and went to speculate in real estate and stocks, which boosted the stock price.On May 30, 2007, after the government raised the stamp duty rate on securities transactions, until November, the "February 8 phenomenon" in the stock market, which is what I call a dual economy, once again reflected the fundamentals. From November 2007 to mid-April 2008, stocks in the overheated sector in the dual economic environment corrected, and stock prices in the overcooled sector continued to fall. This is the reason why the stock index fell below 3,000 points, which is still in line with the fundamentals.

In mid-April 2008, after the government started to bail out the market, the stock price rose because the government’s current work was to correct past mistakes of lack of fiduciary responsibility. After the mistakes were corrected, the value lost in the past would naturally be lost Make up for it, so the stock price rises, which is still in line with the fundamentals of the dual economy.However, due to the continuous recession of the dominant manufacturing industry in my country's economy, a large number of enterprises have closed down, and after September 2008, the sharp correction in the price of international bulk materials has also dragged down the overheating sectors of steel, cement and building materials, thus dragging down the stock index in an all-round way. It fell below 1700 points at the end of October. The government launched a 4 trillion yuan plan in early November. There is no doubt that the return of the stock index to 2000 points in mid-November is a direct reflection of the dual economy, because the stocks that have risen in this wave are basically steel and cement in overheated sectors. and other large state-owned enterprises.