Chapter 313: Stock Market Crash, Collapse
"This is a good idea, but where can we go to play when it's so hot?" Zhang Yiru thought for a while and said. As for taking leave, there would be no problem at all.
When it comes to traveling, which woman can refuse? Zhang Yiru had already planned where to go for her honeymoon, but Gu Junhao was always busy with work and it was difficult to bring it up.
"It's not that bad. It's not that hot in June. We can just go to the north."
"How about traveling abroad? One month is enough for us to visit several countries, right?" Zhang Yiru said with some excitement.
Gu Junhao was a little hesitant. It would be nice to be able to go abroad for a month, but after thinking about it, he said, "Next time. This time is not appropriate."
The stock market crash is coming, and they are running abroad right after clearing their positions. This may cause bad associations among the leeks. You can cut the leeks however you want, that is your ability, but you cannot get involved in this.
Of course, the trip is not that quick. There are naturally many things to prepare before that, and the company's affairs also need to be arranged. Fortunately, the company's business is still relatively simple at present, and maintaining normal operation does not require Gu Junhao to spend much energy.
On Monday, June 15, the third day after A-shares entered the 5178 point level and the first trading day, both the Shanghai and Shenzhen stock markets opened high and then low, fluctuated downward throughout the day, and finally fell sharply.
With the turnover of the two markets reaching nearly 2 trillion yuan, the Shanghai Composite Index eventually fell 2% and fell below 5,100 points, while the ChiNext Index fell 5.22% and fell below 3,700 points again .
Except for a few sectors such as steel that maintained growth throughout the day, the rest ended with a sharp drop. More than 100 stocks in the two markets hit the daily limit, among which small and medium-sized growth stocks suffered the largest declines.
Dongfang Wealth, Tonghuashun, Yinzhijie and others all reported limit down. After the market, Dongfang Wealth's Dragon and Tiger list showed that institutions and hot money fled one after another. Two seats of the Shanghai Stock Exchange, including Liyang Road, cut losses by more than 700 million yuan.
Since July 2014, after seven years of sharp declines and adjustments, A-share valuations have entered the historical bottom area and started to rebound.
After an initial relatively mild rebound, A-shares have started a crazy leveraged bull market since the beginning of this year, driven by leveraged funds on and off the market.
Over the course of two years, the Shanghai Composite Index has risen from a low of 1,849 points to its current level of 5,178 points.
The ChiNext Index rose from the lowest 585 points to 4,000 points, which is even more crazy than the Shanghai Composite Index.
Along with the crazy rise of indexes and individual stocks, the increase in trading volume is due to huge leverage both on and off the market.
Nowadays, in the A-share market, it is not uncommon to see leverage ratios of four or five times.
Some illegal off-market capital allocations are even more crazy and completely disregard the risks. Even retail investors with only tens of thousands or even 10,000 or 20,000 yuan in capital can participate in the capital allocation.
There are many cases where the capital allocation amount is ten times or even more than ten times.
With the leverage ratio remaining high, A-shares are like a powder keg that could explode at any time. Deleveraging is inevitable.
After today's sharp drop in the market, there were rumors in the market that the China Securities Regulatory Commission asked major brokerage firms to clean up off-market financing.
There are even rumors that the regulatory authorities have sent people into the brokerage offices and ordered that off-market financing must be cut off within the same day, and they will not leave if they do not cut it off.
For a while, the market, which had already been in a sharp decline, was in a state of panic, and the funds in the market were like a frightened bird.
Obviously, today's sharp drop was caused by the early leak of this news.
As the two leading companies in Internet finance, Dongfang Wealth and Tonghuashun can be said to be the heavyweights in this round of deleveraging. I have the impression that Tonghuashun was even investigated by the regulatory authorities for this.
Because of capital allocation and suspected violations of the Securities and Futures Law, Tong Huashun was even issued a risk warning of suspension of listing, which led to continuous limit falls.
Influenced by this news, the three major indexes of the Shanghai and Shenzhen stock markets fell again on Tuesday, with the Shanghai Composite Index falling 3.47%. The stock index broke through 5,000 and 4,900 points to close at 4,887.43 points.
In two trading days, the Shanghai Composite Index fell nearly 280 points, and the ChiNext Index was not much better. Following yesterday's plunge, it fell again by 2.85% today.
Zhongguo CRRC recorded another limit down today. The stock price has gradually declined along the daily five-day line and has reached 21.85 yuan, a drop of 45% from the high point.
However, for now, although CRRC continues to experience a sharp decline, its popularity is no less than that in April and May.
Even though retail investors are unaware of the stock market crash, they will still buy at the bottom or add to their positions without hesitation because of their trust in state-owned enterprises.
Even with such a sharp drop, CRRC is still one of the hottest stocks in the market.
In its stock trading comment section, during peak hours, a new comment was published every three seconds, without stopping all night long.
After the stock price fell by 30%, countless investors wanted to buy at the bottom, not to mention that it is now almost halved. Everyone is looking forward to a rebound after buying at the bottom.
As for the stock market crash, at present, the management may not even be aware of it, let alone the retail investors who are not well-informed.
Before his rebirth, Gu Junhao knew that someone still held CRRC shares, and the first time he bought them was in 2015.
It has been seven or eight years since I bought it.
On Wednesday, the Shanghai and Shenzhen stock markets rebounded at the 20-day moving average after two consecutive days of sharp declines. The Shanghai Composite Index rose 1.65%, and the ChiNext Index soared 4.2%.
The three major indexes rebounded on the 20-day line. The sharp drop in the previous two days was immediately interpreted by the market as a normal adjustment . Many experts shouted that this is a golden pit of a wave nature and called on retail investors to enter the market as soon as possible.
The media and experts have called for the recent deep squat to be a necessary preparation for a short-term breakthrough of 5,500 points, and the bullish trend is still maintained.
During this period, the most famous person on social media was a certain Da Xiao, whose crazy bullishness attracted abuse from countless investors.
However, this is not the case. The stock will continue to fall as it should.
The market, which is still in the process of deleveraging, saw another sharp drop on Thursday, with the Shanghai Composite Index falling another 3.67% and the ChiNext Index plummeting 6.33%.
The three major indexes all reversed all of yesterday's gains with a large negative line. For investors, it was another Black Thursday.
By Friday, June 19, the last trading day of the week, the market situation was even uglier.
The three major indexes that plunged yesterday all opened sharply lower today, with the Shanghai Composite Index opening at a gap down of more than 95 points.
This is no longer a normal adjustment. The downward gap after the continuous sharp drop from high levels is like a guillotine. The trend is naturally not going to be good. In his previous life, Gu Junhao also liquidated all his stocks on this day.
Gu Junhao's usual style is to jump down from a high position and leave directly. Even if he makes a mistake, he must first ensure his absolute safety.
Throughout the day, the Shanghai Composite Index fell 6.42%, close to the 6.5% drop on May 28, but the index is already much worse than before.
After a week-long drop of 13.32%, the Shanghai Composite Index has fallen from above 5,100 points to below 4,500 points, closing at 4,478.36 points.
The ChiNext Index fell 14.99% in a week and closed at 3314.98 points.
As tomorrow is the Dragon Boat Festival, after three days of holiday, the market will open next week on June 23rd.
After today's trading ended, the media and investors all dubbed this year's Dragon Boat Festival the "Dragon Boat Festival Disaster."
"In 278 BC, XX bought stocks of the State of Chu with a four-fold leverage. After experiencing a sharp drop on three of four trading days, he was so desperate that he jumped into the river. In order to warn future generations, people wrapped red pork in green rice leaves and tied them with ropes to express the meaning of Yin enveloping Yang, and being trapped."
After today's trading, joke makers have appeared one after another, and jokes about stocks are emerging in an endless stream.
The fact that they are still indulged in joking today also shows that most retail investors are still unaware of the arrival of risks.
When you are really scared, you won't be in the mood to make up all kinds of jokes.
This week's private equity fund rankings were disastrous, with more than 95% of major funds, including public funds, plummeting, while the net value of Junshi No. 2 Fund remained unchanged.
All traders are on holiday, so today's net value is announced by Li Xinyu. There is no change anyway, so just refresh it. He will also announce the next few times.
At this time, both peers and retail investors were very envious of Junshi No. 2's performance, which perfectly avoided the big drop.
"I'm so envious. Brother T perfectly avoided this week's big drop. I wonder when he will come back to buy at the bottom."
"Buying the dip? What dip? All the traders are on holiday."
"Not only that, it is said that Brother T himself has not shown up at the company for a week. He said he was on his honeymoon and he will not be back to buy at the bottom anytime soon."
"Is what you said above true? Brother T didn't plan to buy the dip after such a big drop in the market in a week, and he even went on a honeymoon? Where did you get this information?"
"It shouldn't be fake. I'm from Beicang and I have a relative who works at Junshi Capital. He said that the company is very idle right now. Everyone is playing games and slacking off at work. Brother T hasn't been here for a week."
"Ask your relatives if Junshi Capital is still short of people? Sweeping the floor is fine, I love my job!"
"Me too. I don't have any other intentions. I just want to experience the working atmosphere of a private equity firm."
"It's okay for a honeymoon, but if you didn't tell me, I would have almost forgotten that Brother T just got married, and he's only 24 years old! "
…
When the market experienced a sharp drop, Gu Junhao and Zhang Yiru had already started their journey to travel around the motherland; however, Gu Junhao still took some time every day to pay attention to the stock market trends and news inside and outside the market.
After returning to the hotel at night, I would check emails and simply handle company affairs, but I didn’t completely ignore them.
After the Dragon Boat Festival holiday, A shares reopened on Tuesday, June 23. Two days after the holiday, the Shanghai Composite Index had a slight rebound on the 60-day line, and this rebound lasted for two days.
After two days of rebound, the comments about the golden pit naturally came back to the fore.
On Thursday, June 25, the Shanghai Composite Index once again faced pressure at 4,700 points when it rebounded to the five-day moving average. The index fell again by 3.46% that day, retesting the 60-day moving average.
June 26th was another Friday, and another double downward gap, very similar to last week.
The Shanghai and Shenzhen stock markets experienced another heavy drop today, with the Shanghai Composite Index plummeting 7.4%, the Shenzhen Component Index plummeting 8.24%, and the ChiNext Index plummeting 8.91%.
More than 2,000 stocks in the two markets hit the daily limit, and after-hours trading showed that more than 300 public funds had a decline of more than 8%. All investors who participated in the trading today were affected.
A round of continuous plunges caused by leverage since June 15 forced the central bank to urgently announce interest rate cuts and reserve requirement ratio cuts on the evening of the 26th, and the God of Wealth even proposed a plan for pension funds to enter the market.
The China Securities Regulatory Commission also urgently revised the liquidation line. In this round of plunge, not only did countless ordinary investors suffer liquidation, but even many major shareholders and even controlling shareholders of listed companies were close to or had already suffered liquidation.
Recently, the word that is most mentioned by anyone who trades stocks is undoubtedly "margin call."
What’s even more interesting is that when the evening news channel was interpreting the central bank’s policy, there was even a subtitle below: “Once you escape the fire, don’t go back into it.”
This news screenshot was once widely circulated on the Internet and was seen as a warning to investors.
