Chapter 323: Retail Investors Repeatedly Hit in the Stock Market Crash
It has been less than two and a half months since the Shanghai Composite Index hit a new high of 5,178 points on June 12. In those two and a half months, the index has fallen by more than 2,000 points, a drop of more than 40%.
For most investors, 3,000 points is an important psychological barrier. Above 3,000 points, investors will have the idea that the bull market is coming back, and once the market effectively falls below 3,000 points, investors will return to the bear market mindset.
In fact, in Gu Junhao's opinion, the current market is not a real bear market. A real bear market should be the kind that makes people have no desire to trade, most stocks have no improvement, and are either falling or on the verge of falling every day.
When individual stocks frequently hit new lows and trading volume gradually decreases, that is a real bear market. In the current stock market crash, although thousands of stocks have hit the daily limit, there are still many rebounds and the trading volume has not dropped to an outrageous level. There are still certain opportunities in the market.
However, this kind of opportunity is difficult to grasp. It is definitely easiest to make money when the market is going smoothly. In an ever-changing market, it is naturally more difficult to make money.
It is also because of this that hard work is always one of the most useless options in the stock market. Learning to be short and manage positions and control drawdowns are the most important factors for survival in the stock market.
On Wednesday, August 26, rice stocks rose sharply overnight, and the three major stock indexes all recorded their largest single-day gains of the year. The Dow Jones Industrial Average rose 3.95%, the S&P rose 3.9%, and the Nasdaq rose 4.24%, taking the lead in moving out of the Black Monday trend on August 24.
In Junshi Capital's proprietary trading, Nvidia's holdings had already been established thanks to Xu Jianqing's unremitting efforts, with the holding reaching more than 1 million shares and the cost controlled at US$19.
As the three major US stock indexes emerged from the gloom, Nvidia also achieved a big surge, with its share price at 21.81 yuan, a daily increase of 7.54%. Compared with the trend of A-shares, Nvidia's performance is much better.
Based on the closing price , Nvidia's market value in the proprietary trading account is as high as US$21.81 million, and its profit has reached US$2.18 million, making it one of the few profitable stocks this week.
After Xu Jianqing completed building his own position, Gu Junhao originally wanted to transfer him back to trading A shares during the day, leaving the US stocks aside for the time being, and then transfer the work back to him after recruiting a new trader for US stocks.
However, after working in US stocks for a period of time, Xu Jianqing became very interested in trading NVIDIA because of the T+0 trading system, the large amount of funds at his disposal, and the fact that he had nothing to worry about in foreign stock markets.
Gu Junhao was helpless with Xu Jianqing, who strongly requested that NVIDIA be handed over to him for trading. He could only let him do it temporarily. As long as he didn't lose money, there was no leverage anyway.
In comparison, it is more satisfying to make money from foreigners. If it were not for the need to rescue the market and the restrictions on investment types, Gu Junhao really wanted to invest more money in US stocks.
At the same time, affected by the central bank's interest rate and reserve requirement cuts yesterday, the Shanghai Composite Index opened slightly higher at 2980.79 points, seemingly showing a stabilizing trend, while the ChiNext Index continued to open lower at 1975.92 points.
"It should bottom out again today. Small and medium-sized enterprises are the market sentiment barometer. If the ChiNext does not stabilize, the probability of a rebound during the day is low."
After the call auction ended, Gu Junhao said to everyone that although the valuations of small and medium-sized start-up stocks are still very early, their room for maneuver is still higher than that of blue chips.
What's more, the active funds in the market, including ordinary retail investors and hot money, also prefer small and medium-sized growth stocks.
As for blue chips, since the national team holds a large number of chips, its liquidity will inevitably be affected to a certain extent after the stock market crash is over. In addition, the valuations of most blue chip stocks such as securities, insurance, banks and Chinese-character stocks are also at high levels.
These blue-chip stocks have been hyped more than four or five times in this bull market. Generally speaking, for stocks that have been hyped more than five times, when they actually fall, there is little point in participating in them.
Without a few years of immersion, if the stock price returns to its normal valuation, it can only be limited to a small rebound.
Today, Home Depot opened at the limit down again. Today's stock price has fallen to 30.11 yuan, a 40% drop compared to the high of 51.99 yuan.
Judging from the situation of continuous limit downs without any increase in trading volume, it is no problem for the stock price to be halved. If you want to buy the bottom again, you will probably have to wait until next month.
Since the case was filed for adjustment, Tonghuashun has experienced four consecutive limit-down trends. Today, Tonghuashun also opened at 46.60 yuan, a drop of nearly 100 yuan from the highest price of 142.50 yuan after the ex-rights.
When high valuations meet negative news, the power of the decline is still very scary. Although Gu Junhao knows that Tong Huashun will not be punished by delisting in the end, it seems that Tong Huashun's trend is still very dangerous.
Faced with the risk of delisting, many investors have already sold their shares at a loss during this round of decline. With the stock price hitting the daily limit for four consecutive trading days, retail investors have no chance to escape.
Today, Tonghuashun did not directly report a limit down like in the previous trading days. This also caused a large number of retail investors to be restricted by the negative news and place orders to sell at a loss. Li Ze was one of them.
Li Ze is not stupid. After the market continued to fall and Tong Huashun's rebound was less than expected, he reduced his holdings in time. The price of the reduction was around 76 yuan. At that time, Li Ze reduced his holdings by 4,000 shares, and he still held half of the 4,000 shares of Tong Huashun.
The cost of the 4,000 shares of Tong Huashun held by Li Ze is 51.20 yuan. After four consecutive limit downs after the sudden collapse, the stock is already in a loss-making state. If it were a year ago, when Tong Huashun opened the limit down today, Li Ze might have thought of covering his position.
But now, Li Ze will no longer take such risky actions. Tong Huashun today is no longer the Tong Huashun three months ago.
After the call auction ended, Li Ze directly set the limit price to buy Tong Huashun. After the official trading began, Tong Huashun's stock price quickly fell from 46.60 yuan to 46 yuan due to the rush of retail investors.
The 4,000 shares in Li Ze's hands were traded at the opening price of 46.60 yuan. Since he bottomed out on July 9, Li Ze's highest profit was nearly 200,000 yuan, but now he has to exit with a loss of 18,400 yuan.
Times have changed. Two rounds of stock market crashes have made Li Ze realize that the previous style of long-term holding is no longer suitable for the current stock market. Didn’t you see that Brother T also suffered heavy losses last week?
"MD, there's really no way to deal with this market. The previous trading model is no longer viable. If you want to do it, just make the profit and run." After finally selling it, Li Ze breathed a sigh of relief.
Fortunately, I reduced some of my positions before, otherwise if I had held on to the stocks, the loss today would have been 136,000 yuan.
"Li Ze, did you really sell it? There should be a rebound when the stock opens today, right? The main players in it also need to run away."
"Are you waiting to die if you don't sell? I don't care whether the main force runs away or not. Anyway, I have lost less than 20,000 yuan now. The ChiNext Index has broken 2,000 points. How high can it rebound to?"
"Yeah, you didn't lose much. My brother's cost was 75, and I'm reluctant to sell it. Let's wait and see if there is a rebound today."
"Then you can wait. But I think it's a bit difficult. The case has been filed, so even if there is a backlash, it shouldn't be that big."
During the conversation, Tong Huashun's share price also fell below 46 yuan to 45.89 yuan; at 9:34, the ChiNext Index fell rapidly, and Tong Huashun's trading quotation also changed suddenly.
"Damn, it's diving again. The Shanghai Composite Index is also diving. Tonghuashun has fallen to 44.5 yuan." In one minute, Tonghuashun's stock price fell nearly three points, and just like the index, another flash crash occurred.
At 9:37, Tonghuashun hit the lower limit price of 42.03 yuan. Seeing that it had not yet closed, the brothers who had just said they did not intend to cut their losses were now panicked.
I regretted not listening to Li Kuang's advice and cutting my losses early, which would have saved me at least 9 points of loss. But I was also afraid that if the stock price hit the lower limit again like in the previous trading days, I wouldn't be able to cut my losses even if I wanted to.
Therefore, in a panic, I couldn't help but sell all my shares at the price of 42.03 yuan with one click, and the profit and loss per share was as high as 33 yuan. Although it was painful, I felt relieved that I finally sold them.
However, as he sold his shares at a loss, the price did not hit the lower limit as smoothly as he had imagined yesterday. Tong Huashun's stock price rebounded quickly, and one minute later the price returned to 42.50 yuan.
"Oh my god, could it be that I have sold at the lowest point? It looks like it will rebound today?" He just sold out of fear, and now that he saw that the stock price did not hit the limit down, he felt a little regretful.
Before hesitating, Tonghuashun's stock price paused for a moment, then quickly rebounded with the rebound of the stock index. The stock price quickly rose to 44.10 yuan, down 5.57% on the day, and rebounded more than 4% from the limit price.
"Damn it, I'm really sold out. Looks like the price has hit bottom today, and the main force is making a rebound and retreat." I regretted it more and more the more I thought about it. Why did I act so naughty just now? It was only two minutes away.
At 9:43, Tonghuashun's share price was 43.50 yuan. Just like when it just rebounded from the limit down to 42.50 yuan, there was a slight pause and the share price showed the same sideways trend.
"Never mind, I'll buy it back. The difference is just a little over 1 dollar. I'll make money if I lose money. If it rebounds, I'll make money." Somewhat unwillingly, he bought Tonghuashun again at the price of 43.50 yuan.
However, his original holding of 3,000 shares is now only enough to buy back 2,800 shares, and the cost has increased from 75 yuan to 81.93 yuan. However, as long as there is a round of rebound, he no longer cares and only wants to minimize the losses.
As for the stock price rebounding above the cost line, he no longer holds such extravagant hope. The trend in the next few minutes was as he expected. Tong Huashun rebounded again after a pause, and the stock price rose to 46.28 yuan, and the decline narrowed to 0.9%.
However, since ten o'clock, Tong Huashun's performance has caused him great inner torment.
As the index's intraday volatility intensified, Tong Huashun's stock price fluctuated greatly. After rebounding to above 46 yuan, it started to fall again. At 10:42, the stock price hit the limit price again. This time, Tong Huashun was stuck on the board for three minutes.
Fortunately, the amount of funds that fled within these three minutes was not large, only more than 30 million yuan, and the share price of Tonghuashun opened again. Then the share price started a slow recovery process. By the midday closing, Tonghuashun was priced at 44.65 yuan, and the share price fell by 4.39%.
The closing price at noon was more than one yuan higher than the price at which I bought the bottom for the second time. It was barely enough to make up for the losses from the limit down in the morning. I was relieved and could have lunch in peace.
In the afternoon, Tonghuashun's trend made him happy again for 20 minutes. At 13:19, Tonghuashun reported the highest intraday price of 48 yuan, and the stock price rose by nearly 3%.
At this time, the three major indexes have also turned positive. After the Shanghai Composite Index hit a low of 2850.71 points during the day, it rose violently as the national team re-entered the market. At this time, the stock price rose to above 3000 points, up more than 4%, and the intraday volatility exceeded 8%.
At this moment, in my mind, the trend of the ground and ceiling is already in my imagination.
However, there are not many good things that can happen to the "leeks". At 1:30 p.m., the short-selling force attacked again, the Shanghai and Shenzhen stock markets began to plunge, and Tong Huashun's stock price also began to slowly decline again.
Since there are no more thousands of stocks hitting the daily limit, the market rescue efforts have been getting worse and worse, and the effect is no longer as good as before. The index has been moving downward step by step. At the end of the day's trading, the Shanghai Composite Index closed at 2927.29 points, down 1.27%.
The ChiNext Index fell again by 5.06%, breaking below 1,900 points to 1,890.04 points. As expected, Tong Huashun's stock price hit the lower limit again in the afternoon, and its share price returned to the 42.03 yuan at which he had sold his shares.
"RTMD, I am such a loser. Why did I buy back after selling all the stocks? I lost more than 4,000 yuan again!" It would have been fine if the stock price had hit the limit down within one day, but because of my loser, I suffered a daily loss of more than 13%. I might as well cut my losses at the limit down price.
The next day, Tonghuashun opened at 43 yuan. At 11 o'clock in the morning, the stock price trend was intact, and the stock price once rushed to 44 yuan, an increase of 4.69%. However, after 11 o'clock, the index fluctuated and Tonghuashun plunged again.
Just like yesterday, the stock price fluctuated after the plunge. In the afternoon, it fell to the limit price again. The old man, who couldn't stand this process, had a complete mental breakdown and chose to sell Tonghuashun at a price of 40 yuan.
In the subsequent rebound, Tonghuashun's stock price finally closed at 43.15 yuan, up 2.66% on the day. At this time, he no longer dared to buy it back, and his loss increased by nearly 10,000 yuan compared to yesterday's purchase.
"It's junk stock, fuck it, I won't buy it anymore, delist it immediately."
In Gu Junhao's opinion, the trading on the 26th was already the market bottom this year. The Shanghai Composite Index hit a low of 2,850 points and rebounded. Although it eventually closed in the negative, judging from the rebound of individual stocks, the trend was still quite good.
Maotai Liquor Industry rebounded on the second trading day after yesterday, with its share price closing at 183.88 yuan, successfully standing above the five-day line. Over the past , Maotai's trading volume has increased a lot, with a trend of increasing volume from the bottom.
The share price of Vanke A today is 13.25 yuan, up 1.92% from yesterday. The two sides are still fighting over the price of 13 yuan, with one side seeking to suppress the share price, while the other side hopes to collect more chips at this price.
The entry of insurance funds and the subsequent famous Baowan dispute had gradually shown signs when the Shanghai and Shenzhen stock markets bottomed out in August 2015. Although it has entered a technical bear market, the A-share market is still very exciting.
