Monday, June 11.
Tokyo Stock Exchange.
"The market is about to open, I wonder how it will perform today?"
"Of course it went up. Are you questioning Professor Kotaro's words?"
"No, no, why would I question Professor Kotaro? He's a financial expert for our Oshima Empire."
“I mortgaged the house to the bank over the weekend. I believe what Professor Kotaro said, that the bottom is the baby’s bottom. Today I plan to put all this money on the line.”
"Sogga, that's right, that's how the people of the Great Island Empire should be."
"......"
A similar scene.
It took place at the island nation's three major stock exchanges.
Retail investors seem to have been brainwashed.
The market downturn did not frighten retail investors.
on the contrary!
What stock only goes down and never goes up?
Encouraged by certain individuals, most people believed that this was an opportunity arising from the downturn.
Terms like "gold mine" and "diamond mine" are constantly emerging.
For a time, averaging down and adding to positions became the main theme in the stock market.
......
At 8:00 AM sharp, the island nation's stock market opened.
The huge electronic screen displayed the market index at [point].
Compared to the previous trading day, the market index fell 29.3 points, a decrease of -0.01%.
The market also saw more sectors and individual stocks declining than rising.
Upon witnessing this scene.
Instead of flying into a rage, the retail investors calmly shared their views.
"It looks like the market will continue to decline today."
A middle-aged stock investor calmly analyzed the market.
Upon hearing this...
Someone nearby chimed in.
"What's there to be afraid of? The deeper the fall, the better, because it creates opportunities."
"That's right!"
This statement was echoed by many of the surrounding investors, as another person remarked.
"Stock trading should not be about blindly chasing highs and selling lows. With the market in a volatile trend, those oversold stocks should be the first priority."
"Once the market index reaches the level Professor Kotaro mentioned, near the 'baby bottom,' I plan to buy some oversold stocks."
"As long as the market rebounds, a profit of 5 or 6 percent is easily achievable."
Upon hearing this, most stock market investors' eyes lit up.
That's a really good idea!
Oversold sectors and individual stocks, having experienced significant declines in the previous period, present an opportunity given the uncertain overall market trend.
First, those trapped at higher levels will not easily sell at a loss.
Cutting your losses means admitting defeat and losing the game, leaving no chance for a comeback.
Secondly, oversold sectors and individual stocks, as long as they haven't encountered systemic risks.
In some ways, it is also safer.
Even if the market falls further, it will reach a certain equilibrium in stock prices because there are not many sellers.
In theory.
The things that retail investors are discussing are not wrong.
Oversold stocks are less likely to fall further and more likely to rebound.
But they forgot two things.
First, there's a saying in the stock market.
The strong will always get stronger!
This means that behind every stock price increase, there are certain compelling reasons why the price must rise.
When you're optimistic, I'm optimistic, and everyone is optimistic, the stock price will soar.
In addition, the rise in stock price is rooted in the views of the major players behind the stock. Their views determine the rise and fall of stock price.
To put it bluntly, how much money do retail investors actually have?
Similarly!
There are various reasons behind the decline in stock prices.
The most fundamental reason is that individual stocks are being abandoned by major investors.
How many stocks have you seen that keep rising without any major institutional investors or market makers?
Which of them didn't keep falling until, in the end, only retail investors remained in the individual stocks, leaving behind nothing but a mess?
They might even become zombie stocks, with a daily trading volume of less than one ten-thousandth of the total share capital.
Second, environmental factors, which can also be understood as political factors.
Many people know that every bull market is inseparable from the support of national policies.
But few people know that, in addition to these, there is also the external environment, the global environment.
This is why the rich get richer, while the poor only get poorer.
point.
point.
point.
"What?! The baby's bottom is ruptured?"
The investors were all a bit confused.
In particular, Professor Kotaro's point is about the "baby bottom," which has strong support.
result.
Snap snap snap...
Professor Kotaro was instantly proven wrong.
Under intense selling pressure, the market index continued to decline.
The so-called "baby bottom" is even more vulnerable.
The support line at the point only made a token struggle.
In an instant, it was buried by a massive number of sell orders.
point.
point.
point.
In the 5-minute candlestick chart, three consecutive large bearish candlesticks appeared.
Those short 15 minutes felt like an eternity to the investors.
"Please, please stop falling. If it keeps falling, I won't have any money left to buy more shares."
Market sentiment is overwhelmingly pessimistic.
But that's all!
Many investors, driven mad by their losses, made a desperate move, taking out their life savings and quickly entering the stock market.
The attempt was to lower the cost basis of the holdings by averaging down.
Once the stock price rebounds, you can quickly break even.
However.
After buying more shares, the investors realized they had done something stupid.
The stock price keeps hitting new lows, while the losses are getting bigger and bigger.
"Baka!"
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