For retail investors who are speculating in stocks, there is a sad saying: If you speculate, you will become a shareholder!
Most retail investors come to A shares not because they want to become shareholders of a certain company. Their original idea is: after buying, they can get a rebound, and then make a profit and withdraw quickly.
But since the first quarter of 2021, many retail investors have turned themselves into shareholders of listed companies.
Guess who is the current base of retail investors in A-shares?
1. Who is the base camp of retail investors?
Judging from past experience, generally the higher the stock market rises, the more retail investors rush in.
But since 2021, retail investors have changed their habits. The lower they fall, the more they buy, and then they are trapped!
So the question of who is the base of retail investors should actually be found from those big white horses whose stock prices have plummeted. For example: Ping An, Hengrui , Gree , Sany Heavy Industry and so on.
If we look at the number of retail investors alone, BOE ranks first, with 1.6 million shareholders.
followed by Ping An and Sany Heavy Industry, both with more than 1 million households.
Gree and Hengrui are both in the top ten. See picture below. (Some companies have not yet disclosed their interim results, and are using data from the first quarter report.)
What’s more interesting is that there are also some old-fashioned companies among them. For example, and CRRC , which were known as China's hearses back then, are now covered by nearly 700,000 retail investors! These retail investors are so tenacious!
However, there are differences in the behavior of the older generation of retail investors and the new generation of retail investors.
2. The behavior of new and old retail investors has changed, but the fate of being a leek has not changed.
In 2015, the hearse of CRRC carried 1.85 million retail investors. Then it plummeted all the way, from 35 yuan to less than 5 yuan now, a drop of 85%!
Moreover, it does not give you a chance to unwind at all, and keeps falling until you completely collapse!
We can also see from the picture that retail investors rushed in to chase the highs, and then continued to cut their flesh and leave the market as the market plummeted.
This is a typical characteristic of the older generation of retail investors.
The new generation of retail investors have completely reversed . Taking Ping An as an example, once the plunge mode is turned on, they rush in to buy the bottom , for fear of being a step too late and losing 100 million yuan. See picture below.
As the stock price of Ping An has been falling, retail investors are not idle and are buying all the way. From cherishing the peace of 70 yuan, copying all the way to cherishing the peace of 30 yuan. The number of
shareholders was only about 600,000 in 2020, but now it is 1.16 million.
Although I am also optimistic about insurance and Ping An. But you will find that even if Ping An's fundamentals improve very well, the stock price cannot rise China Life . Why?
Because there are too many retail investors who are trapped. These retail investors were not originally intended to be shareholders. It's just that I couldn't bear to stop the loss after being trapped, and I have carried it all the way until now. As long as the stock price rises, these retail investors will quickly sell and leave the market.
Therefore, Ping An’s rapid rise may have to wait until the unsteady retail investors are almost digested.
China Life has only 157,000 shareholders in total, and the stock price has been falling, and retail investors have been running away! See the picture below
Without the unstable market of retail investors, the stock price will naturally rise faster.
While stock prices will eventually reflect fundamentals, the road may be bumpy.
Why has the behavior of the new generation of retail investors changed drastically? It's not because the memory is too short.
only remembers that the big white horse rose well in the past few years, coupled with the deception of fund companies and securities companies, such as buying China's core assets!
When you hear it, ouch! China's core assets. A dip is a buying opportunity.
But we have to be rational. Even if is a core asset, we cannot buy it if the price is too expensive. We have to wait until the valuation falls to a certain level before we can buy it.
Real estate back then was also called core assets. What do you think about it now? Is it worth the investment?
All assets have two dimensions: fundamentals and price . Don’t rush to buy so-called good companies and industries when you see them.
3. How do retail investors turn themselves into shareholders?
As I said at the beginning of the article, few people really want to become shareholders. Most of them just want to make a quick buck and then turn around and leave!
If they want to become shareholders in a company, what do they do before buying?
Let me give you an analogy. For example, you have a milk tea shop downstairs that you plan to transfer, and you plan to take over and run it yourself.
Then you will definitely investigate the turnover, profit, flow of people, surrounding environment, age structure of surrounding residents, equipment fees, franchise fees, labor, channel fees, etc. of this milk tea shop.
In other words, you will study it as a business and then estimate the cost of buying this milk tea shop.
But if the original owner of this milk tea shop changes his approach, instead of selling it to you directly, but splits the income rights of the milk tea shop into shares, and then puts out advertisements to invite people to subscribe, what will happen to the people who come to subscribe? How about that?
There must be people here who will study the fundamentals and valuation of milk tea shops, and then decide to buy them and earn the profits and dividends of the milk tea shop every year.
But more people may not be like this. It is very likely that after they buy the shares, they go around deceiving others to take over their shares at a high price.
For example, they may say that this milk tea shop plans to open 5 branches within a year, and its future profits will at least increase by 5 times. I bought it for 3 yuan a share, and now it is cheaper for you. I will sell it to you for 6 yuan. You must know that the profit will increase five times in one year. If I were not in a hurry for money, I would not be able to sell it to you.
Of course, if you want to sell it at a high price, you can make up any reasons, even if these reasons sound very ridiculous. You can refer to how Luckin deceived Americans back then. It can be included in textbooks. Anyway, Ruixing is still losing money.
In addition, sometimes there are no scammers to deceive retail investors. It is retail investors who want to make money too much and deceive themselves. For example, it is always believed that the aging population will be serious in the future, so medicine must have broad prospects.
For another example, seeing that photovoltaics and are rising, any news can be interpreted as good news.
Any analysis cannot be linear, but interspersed with multiple factors, and retail investors like to use one reason to draw conclusions!
After all, even if the price is exorbitantly expensive, everyone still thinks that there are more stupid people in the market to take over the stocks they bought at a high price.
is nothing. Since 2021, it seems that there are not enough fools.
Retail investors who bought Dabaima stocks at high prices still refused to admit their mistakes and were reluctant to stop their losses. So I just turned myself into a shareholder.
felt at ease now and changed his mind to say that he was doing value investing (not speculation).
Of course, they can't be steady. As long as the stock price fluctuates, their hands will definitely be restless.
4. Inspirations from the retail investor base camp
For retail investors who speculate in stocks, the greatest tragedy is to turn themselves into shareholders. What enlightenment does
give us?
1. You must know whether you are investing or speculating. If you are speculating, you are betting against others. For stocks bought at high prices, you must set a stop loss line and strictly implement the stop loss strategy;
2. Invest in When buying a business, you need to study the two dimensions of fundamentals and price. No matter how good the thing is, you cannot buy it if it is too expensive;
3. The world is changing, but human nature remains the same. Although the behavior patterns of retail investors have changed, they are hidden deep inside. The inner humanity still cannot change the fate of their leeks. Whether investing or speculating, the most important thing is actually the study of philosophy, psychology and mathematics.
One last thing, if you really turn yourself into a shareholder, then don’t scold the company, the executives, or the main force. Progress comes from self-reflection, not shirking responsibility. Otherwise, it really can only be used as a leek!
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