Knowledge of professional terminology for stocks - bargain hunting

Butter hunting refers to an operation strategy in which the stock price drops to its lowest point, especially if it falls sharply in a short period of time, and the stock price is expected to rebound soon. However, it's hard to tell which one is the cheapest. So do you know about bargain hunting? The editor has sorted out the professional terminology of stocks - bargain hunting, for your reference. I hope you will gain something from the reading process!

Dipping refers to using some valuation index to measure the stock price reaching the lowest point, especially when the stock price reaches the lowest point. An operational strategy of buying when there is a sharp drop in a short period of time in the expectation that the stock price will rebound soon.

Buying the cheapest stocks is an investment opportunity that all investors yearn for, and it is also a profit model that value investors believe in. However, there is no clear standard for what kind of price is the "cheapest" or "lowest" price. Bottom buying is often a description of buying at the lowest point that has already occurred, but it is difficult to judge what point will be the bottom in the future. In addition, the rapid decline of some stock prices is not due to underestimation, but often because of problems with the company's fundamentals. If you buy at this time, not only will the stock price not rebound soon, but on the contrary, it will fall further before the fundamentals are clear. possible. Investment guru Peter Lynch has a famous saying, "Don't buy the dip." This means that if investors are convinced that the stock price will fall below a reasonable valuation level when there are no major problems with the company's fundamentals, they can consider buying without trying to anticipate a bottom.

Catch the signal that the bear market has bottomed out and buy the bottom

Who doesn’t want to buy the bottom? But in many cases, the bottom is right in front of them, but retail investors have no way of knowing it, and they just make a profit on the floor. The wrong behavior of cutting the price and cutting off the position will be regretted endlessly.

Just as the peak of a bull market is particularly important, the bottom of a bear market also attracts special attention because it is a good opportunity to buy the bottom. Peter Lynch, who is called a superstar in the American securities industry, believes: "The stock market drop is as common as the January snowstorm in Colorado. If you are prepared, it cannot hurt you. The drop is a good opportunity for you to pick up those stocks." Bargains left behind by investors who hurriedly fled the storm."

Western securities markets have drawn the general rules for the bottom of bear markets:

1. Investors have changed from greed in the past. The stock market really bottoms out when you are completely indifferent to the stock market and have no hope of a rebound.

2. Blue chip stocks or high-quality stocks generally have the strongest ability to withstand declines in the market, and only fall rapidly when the bear market is coming to an end. Investors generally only sell at the end. When blue chips join the ranks of the sharp decline, it is generally the stock market that has entered the bottom.

3. The unusually large number of stocks hitting new lows means that the market is about to bottom out.

4. When the stock market is close to bottoming out, all the news is unfavorable. The news published in newspapers is about a surge in bankruptcies, rising unemployment, brokerage firms closing, reduced car sales, and declining retail sales. The economy is booming, etc., and when the stock market really bottoms out, most speculators are exhausted and unable to make a comeback, and the number of speculators who borrow money is limited.

Since the Chinese stock market has not yet been perfected, the above does not fully conform to the characteristics of the Chinese stock market, but its main contents are similar and worthy of careful reference by retail investors.

On October 16, 2007, the market reached its highest point of 6124. After that, the Shanghai and Shenzhen stock markets fell from their highs and never recovered. By October 2008, the Shanghai Composite Index had fallen to a new low of 1,664 points. The pessimistic atmosphere in the market was strong, and investors became desperate. Market sentiment disappeared, and the entire The stock market is deserted and desolate. Most exchanges were empty except for traders with nothing to do, laughing and chatting around the tables. All of these have shown signs that the bear market has bottomed out, and this coincides with the experience of Western securities markets. Dawn is born in darkness, and stock market trends occur at the lowest ebb. This should be the best time for retail investors to build positions, but unfortunately, most investors are discouraged. Some investors even cut off all their positions and left the stock market at this bottom, vowing to never do stocks again in their lives. A few months later, the Shenzhen and Shanghai stock markets broke out of their long-term sluggish trend and suddenly turned upward, performing a thrilling surge.

There are other indicators of the coming bull market in my country's stock market:

1. The highest peaks are more than the lowest. Every day, some security prices in the stock market break their highest prices. Or the lowest price. If the number of securities that exceeds the highest price is large, it is a bull market trend.

2. The width of the stock market increases, which means that there are more securities types with rising prices than falling prices. Even if the total price drops slightly at this time, it can also be called a bull market trend.

3. The recent large amount of short selling marks a forward bull market, because the short selling must be bought back in the market in the future, and the price will rise accordingly.

4. When companies buy back their own stocks in large quantities, the supply in the market will be reduced and prices will rise.

5. When insiders bid for stocks and bonds, it usually means that the bull market is about to come.

6. When the debt investment rate is low and investors are generally pessimistic about the prospects, the bull market will soon come.

These signs indicate the arrival of the bull market and can be used as a reference for the bottom of the bear market.

Retail investors must have the ability to find the bottom in a bear market, and be able to build low positions at the bottom and wait for the next round of rise. If you are still indifferent when you reach the bottom, you will have missed a good opportunity. If you still cut the meat and close positions at this time, you will lose all your money; when the market is consolidating, you need to analyze whether the market will be up or down. Positions should be reduced.

Tips:

1. The stock market really bottoms out when investors turn from their past greed and become completely indifferent to the stock market and have no hope of a rebound in the stock market.

2. The unusually large number of stocks hitting new lows means that the market is about to bottom out.

3. When the stock market is close to bottoming out, all the news is negative.

4. If the number of securities that exceeds the highest price in the stock market is greater than the number of securities that exceeds the lowest price, it is a bull market trend.

5. There are more types of stocks with rising prices than falling prices. Even if the total price drops slightly at this time, it can be called a bull market trend.

6. The recent large amount of short selling marks a bull market in the long term.