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Author: Taylor, Editor: Xiaoshimei

On July 31, the popular stock Volkswagen Transportation opened high and closed low. In the previous 15 trading days, it had recorded 9 daily limit increases.

The main business of Dazhong Transportation is transportation and real estate business, and the capital market has not paid much attention to it for a long time. However, after becoming a concept stock of smart online car-hailing, the company directly became the focus, the stock price ushered in a big explosion, and shareholders suddenly made a lot of money.

Although Dazhong Transportation has issued many warning notices, a phenomenon in the market is that many people are blindly buying in while scolding people not to follow the hype. Once the stock price turns around, they will be trapped at a high level again, and it is unknown when they will be released.

It should be noted that A-shares are no longer a safe haven for speculation.

The timely introduction of the new nine national policies is a comprehensive rectification of the capital market.

In addition, the overall profitability of the entire market can be guaranteed only by cracking down on speculative forces, strengthening delisting efforts, and maintaining the survival of the fittest.

Zhongtai Securities once conducted a statistics, with the time interval set at 2009-2019, and counted the number of listed companies with ROE higher than 15% in these ten years. Among them, there were only 18 A-shares and 161 US stocks; if the ROE indicator was relaxed to 10%, the number of A-share companies that met this requirement was 54, while the number of US stocks was as high as 298.

Excellent performance brought about better market performance, and investors also received generous returns.

After the financial crisis in 2008, the U.S. stock market experienced a bull market that lasted for more than a decade. The Dow Jones Industrial Average rose from a low of 6,470 points to nearly 37,000 points in 2021, an increase of nearly five times.

On the other hand, the Shanghai Composite Index broke through 3,000 points more than a decade ago, and then went around and around, and is still hovering at this position today. During this period, China's GDP has tripled. Although the sluggishness of the Chinese stock market cannot be attributed entirely to the lack of quality and vitality of listed companies, it is ultimately an unavoidable factor.

This special concept stock is so popular that the market has long been immersed in the atmosphere of "following the trend and hyping". Good companies do not receive the attention they deserve, while poor companies are very popular, which seriously distorts and deviates from the original intention of the capital market to serve the real economy.

Let the funds in the stock market always focus on the most dynamic and high-quality enterprises in the entire economic world. This will not only benefit economic development, but also give investors returns, forming a win-win virtuous cycle, and for the entire market, it will bring a clear sky.

The era of following the trend and speculation is coming to an end, and investors need to carefully check their holdings.

Disclaimer

The content of this article related to listed companies is the author’s personal analysis and judgment based on the information disclosed by listed companies in accordance with their legal obligations (including but not limited to interim announcements, regular reports and official interactive platforms, etc.); the information or opinions in the article do not constitute any investment or other business advice, and Market Value Observation shall not bear any responsibility for any actions arising from the adoption of this article.