Chapter 28: The hidden rules of the stock market: quality in a bear market and momentum in a bull market

Old Zhang yelled at him fiercely, saying:

"You're so good at reading Reporter Li's articles every day. You talk so loudly, but you didn't hear a word he said. If you don't leave now, you'll be paying the price."

"real?"

Old Man Zhou on the side frowned in disbelief, "The banking sector that's driving the market this time, the valuation is not low, right?"

Li Feng carefully analyzed the situation and said, "Yes, the valuation of the banking sector is not low, but the valuation of small-cap stocks was too high in the past few years. Moreover, the Big Four banks did not participate in this market."

"The Dinghaishenzhen has not moved, which determines that the level of this market is not that high."

"Not to mention, policy participation in this market is not that high. We are all veteran stock investors and should all know that our country's stock market is, to a certain extent, a policy-driven market. So this is a profit-making market, so everyone should sell at the high point."

Li Dian regretted repeatedly and sighed, "Alas, alas, I just bought it and you're asking me to sell it, alas..."

Old Man Zhou was still a little skeptical and said, "What if...what if...we can't always focus on policies when investing in stocks...we also have to consider the valuation and quality of the stocks themselves..."

Li Feng nodded.

I know that Old Man Zhou is a value-oriented person.

In the stock market, there are three major investment schools, each with many followers. Each major school has many small schools.

The three major schools are: news school, technology school, and value school.

Similarly, there is a chain of contempt: the value faction despises the technology faction, the technology faction despises the news faction, and the news faction despises the other two factions.

The three factions often quarreled with each other, and no one was willing to give in.

Li Feng believes that existence is justice.

The three major schools of thought have been passed down for hundreds of years in the Chinese and foreign stock markets, and countless books have been written. They all have their own advantages, but also their own disadvantages.

In a bear market, you should refer more to value investors, because the quality of stocks, especially the dividend yield, can provide a huge safety cushion for the stocks.

Veteran stock investors who often suffer in a bear market are well aware of this.

In a bull market, you should refer more to technical analysis, because in a bull market, most of the participants are new investors, and the most active traders are also new investors. New investors like to refer to various technical indicators the most.

Under positive feedback, stocks that best meet the technical indicators are most likely to go bullish, or even very bullish.

This is also the unwritten rule in the stock market, the origin of the emphasis on quality in a bear market and the emphasis on momentum in a bull market.

As for the news faction, it is full of all kinds of conspiracies and intrigues, which Li Feng dislikes the most.

It is still a bear market now, and Old Man Zhou's thinking is still in the bear market thinking. The general trend is good, but there are some differences in the small trends.

Li Feng thought for a moment and said, "Bank stocks are indeed undervalued and have high dividend yields. Holding them gives you peace of mind, but it also tests your mentality. If you, Mr. Zhou, have a good mentality and can hold on, then you might as well hold on. If you can't, then it's okay to exit and take a look."

Lao Zhou listened and agreed:

"I bought bank stocks in 2011 and have held them for two years now. Why not hold them for another two? My thinking is, our country's banks aren't going to go bankrupt, but look at this dividend, it's even higher than bank interest. Instead of keeping my money in the bank, I might as well buy bank stocks for my retirement. Don't you agree?"

"Hey, Old Zhou, you're really good. Buying bank stocks for retirement, even you can come up with this idea." Old Zhang praised.

"Hehe, I think about a lot of things and always think the worst of everything, but no matter how I think about it, I can't imagine there is anything wrong with this decision, so I just did it. To be honest, 80% of my coffin book is invested in the four major banks, and I rely on them to provide for my retirement." Lao Zhou joked.

Li Feng praised:

"Mr. Zhou, you have such a good attitude. It's hard not to make money. In fact, when we investors invest, we are investing in the fate of our country. If you believe that our national bank is safe, you will naturally buy. If you don't believe, you will sell. Otherwise, there would not be such a low valuation, allowing everyone to pick up a bargain."

"Yes, yes, that's what I mean."

Old Zhou was praised, his face flushed, and he said,

"We value investors. In a bear market, we earn dividends, which can cover our living expenses. In a bull market, we can benefit from the valuations of growth stocks, and our market capitalization can increase significantly. No matter how we think about it, we can't lose money!"

"Old Zhou, can you catch the bull market? We don't know when the bull market will come," Li Dian retorted. "Don't be so frustrated that you can't stand it anymore and sell your stocks early."

Old Zhou was displeased and said:

"Why can't I get a bull market? You think you're like me? If I don't trade for a day, my hands will itch. I trade dozens or hundreds of times a year, just working for the brokerage firm, and you still have a negative return this year, right?"

"I betrayed my pride, what's it to you?" Li Dian started arguing.

Lao Zhang hurried over to mediate, saying, "Stop arguing, Reporter Li, add us to the group and we can chat there from now on."

"Yes, yes, Reporter Li, let's chat in the group. We are all in the group." Li Dian also agreed.

"drop--"

Li Feng joined the group.

There are only five or six people in the group, and judging from their avatars, they are all old men.

"Let's talk about it another day, another day." Li Feng waved his hand.

"Chat in the group, chat in the group——"

"Okay—"

After a while, the place was empty.

Yao Jiu squeezed over, camera in hand, and said, "Reporter Lin, we meet again... Um, uh, hehe..."

Yao Jiu scratched his head and said a little embarrassedly: "Can I still buy stocks now?"

However, in the past two months, the stock market has soared, and all his colleagues are smiling. He is itching to do something again, and has forgotten the oath he made earlier.

I want to enter the market again.

Li Jian was completely speechless.

Because Yao Jiu is really not suitable for stock trading.

He is too sensitive.

Unable to bear the pressure brought by the stock market, which leads to inconsistency between words and deeds and distorted operations...

Fortunately, it's a bear market now, so he shouldn't have lost much. If it were a bull market...

That would be troublesome.

Li Feng thought for a moment and advised, "You should have heard it outside the crowd just now. The market is about to end, so don't enter..."

Next to her, Lin Menghan had been enduring for a long time.

At this moment, he heard Yao Jiu asking Li Feng about stock trading, and he immediately became furious and pulled Yao Jiu and said:

"Yao Jiu, let's go. Why do you have to learn stock trading from him when there are so many other people to learn from?"

Yao Jiu hesitated and said:

"But, Sister Lin... but Reporter Li is really good... Look, he said it would break 2000 points, and it broke it immediately, saying..."

"Tall ass,"

Lin Menghan interrupted him with a cold expression, "He's talented, but does he have a car? He's talented, but does he have a house? He's been speculating in stocks his whole life, but he's still a pauper, isn't he?"

"Huh? Could it be that reporter Lin is good at stock trading?" Li Feng suddenly stood up, looked down at him and asked coldly.

This Lin Menghan is really beautiful but has a vicious heart and poor skills. I am helping her out with good intentions.

She was not only not grateful, but also scolded him.

He really doesn't know what's good for him.

Needs to be cleaned up.

"Whether I'm tall or not...whether I'm tall or not, what's it to you?"

Lin Menghan hesitated for a moment, looking at Li Feng's cold eyes, and for a moment, she felt a little nervous.