I object to the concept of price earnings ratio to evaluate whether there is a "bubble" in the growth enterprise market.

Because, since it is the gem, its core significance lies in the future, not the present.

No one can figure out the price to earnings ratio of these start-up companies in the next 5 to 10 years, which is the charm of start-up companies.

In the era of the Internet just rising, many Internet Co listed on the Nasdaq market were not profitable at all. They could not calculate the price earnings ratio. But then they grew into a first-class Internet Co. The stock market value rose from hundreds of billions of dollars and billions of dollars to hundreds of billions of dollars in the past. This is not a rare thing.

But can you catch such a good company? This is indeed a big problem in the investment of gem.

If you can't be sure that the company you hold is indeed a possibility of deterministic growth, are you sitting on the crater? We certainly know the truth of high risk and high yield, but we know more about the principle of symmetry between risk and return. The problem is, we also know that high risk is not necessarily high yield, but more likely to be high loss.

Every new technological revolution will bring forth great companies, but we must understand that these great companies, Feng Mao, are mostly victims.

Every new technological revolution will be full of opportunities, but we must understand that investors who catch real opportunities are more likely to be "capital waster" providers.

No way to let the market naturally cultivate new industries, this is a very cruel "capital squandering" era.

In this era, it will inevitably lead to a large number of "capital waste", and win the tide of capital without any clever way. But we need our full understanding of the future, the full grasp of opportunities and the forward-looking grasp of technology, rather than just listening to stories.

Don't worry, I hope today's joy will not become tomorrow's pain.

Therefore, we advise investors of GEM stocks to stay half conscious and half drunk at any time, and not to gamble too much.

The appropriate ratio is 1/3 of the total stock investment.

I think that although we can not apply the concept of price earnings ratio to the growth enterprise market, I still feel that the growth of China's growth enterprise market is still somewhat unusual.

Perhaps there are more technical factors mixed up here. It is very likely that the technical defects in the market construction have led to excessive market growth.

Are there any technical defects? Yes, there are.

In my view, there are two biggest technological flaws in China's growth enterprise market, and they complement each other.

First, liquidity defects; secondly, rational will defects.

In 1998, I spent a lot of time studying the NASDAQ in the process of making the capital market series, looking for the key to its success.

For this reason, I visited all the world, including the then chairman of the Nasdaq, Saab, as well as the 10 international investment banks and the founder of NASDAQ.

They made me understand a key factor in the success of NASDAQ, the most advanced trading system, which they call the competitive market maker trading system (or the multi market trading system).

Why is this a big deal in the trading system design of NASDAQ?

Why did he become the key to the success of NASDAQ? The principles are as follows:

　　第一，沖當(dāng)做市商的證券經(jīng)營(yíng)機(jī)構(gòu)都是實(shí)力雄厚的機(jī)構(gòu)投資者，它們依據(jù)自身的實(shí)力報(bào)價(jià)、報(bào)量并有能力吞吐更多的股票，而使市場(chǎng)不至于因?yàn)檩^大量的買入、賣出造成市場(chǎng)瞬間的大幅波動(dòng);第二，當(dāng)單一做市商實(shí)力滿足不了市場(chǎng)交易量的時(shí)候，按照納斯達(dá)克的規(guī)則，至少會(huì)另外兩家做市商幫忙一起參與交易，或?yàn)橘I主(賣主)找到愿意賣出(買入)的下家兒，從而更加有效地防止了市場(chǎng)價(jià)格因大筆買賣而出現(xiàn)大幅波動(dòng);第三，做市商每天都在密切關(guān)注上市公司的一舉一動(dòng)，對(duì)其了如指掌，所以可以通過多家做市商的競(jìng)價(jià)，給出上市公司的相對(duì)準(zhǔn)確的價(jià)值評(píng)估，因此它們的報(bào)價(jià)對(duì)市場(chǎng)價(jià)格具有強(qiáng)大的影響力;第四，當(dāng)市場(chǎng)出現(xiàn)大幅上漲或下跌的時(shí)候，做市商會(huì)對(duì)投資者的風(fēng)險(xiǎn)做出提示，從而使市場(chǎng)波動(dòng)顯得更加理性。

From the above characteristics, we can see that the competitive market maker trading system is small market capitalization and few shareholders.

It provides much more fluidity than a free match system with a single "automatic quotation, paction based on price priority and time first principle".

China

There is a major misunderstanding.

Think trading is big and market liquidity is good.

In fact, on the contrary, large volume of pactions and large market volatility are precisely the performance of bad liquidity.

The real liquidity should be: the volume of pactions that can be tolerated at a single price.

That is to say, the larger the scale of pactions that can be tolerated at a single price, the better the liquidity; vice versa.

Based on this understanding, China's "free matching trading system" is only suitable for the large number of tradable shares and enough stock holders.

That is to say, it is not suitable for small scale stocks.

Having understood the principle, we should soberly see that the liquidity of China's growth enterprise market is very poor.

Every paction of institutional investors is in the middle and small investors PK, which will inevitably cause institutional investors to buy the "shake shop" and dig up a "pit of the enemy" and take the lead in retail business. When they want to ship, they must "pull up the shipment" and attract more retail investors.

This is actually the basic feature of China's stock market.

Now, the liquidity of the growth enterprise market is worse than that of the motherboard, and it is more difficult for the organization to ship. Is that why there is such a "market" situation today? I think, no matter what kind of judgement you make, as long as you are an investor in the growth enterprise market, you must consider this factor.