Observe the market position from the average share price

Many personal views are very alternative, and even non-mainstream, but it is undeniably effective.

For example, to measure the cyclical position of the market, there is an indicator that uses the average stock price.

However, when it comes to the absolute stock price, the price investment will definitely refute the company’s value and the absolute value of the stock price has nothing to do with it, and it has nothing to do, but the transaction value is related to the absolute value of the stock price. And in a way, the absolute stock price is the market’s thermometer.

The reasons can be attributed to the following points:

1. Attractive low price, more conducive to hype

1,000 yuan of stock you rose to 3,000 yuan, more eye-catching. But 1 yuan of stocks is slowly fried to 3 yuan, and no one may notice.

If the market is full of low-priced products in one place, it is obviously very easy to fry them, and everyone can work together to become a “new cow”. big.

2. More in line with the psychological needs of scratching prizes

For low-priced stocks, you can buy an opportunity for a few hundred yuan and a few thousand yuan. Even if you scrape out the “next time effort”, most people can laugh it off. If you buy one hand for 100,000 or 200,000 yuan, and scrape it out “next time try”, for many people, it will be uncomfortable.

Moreover, the ultra-high-priced stocks themselves are the threshold for many retail investors. Maybe the money in his account is not enough to buy one hand. If you think about losing the demand of the public, isn’t it a high-pitched and widow-like speculation? Even in the end, only institutions can play this game with each other.

3. Behavior of listed companies

When the market is overheated, listed companies often like to issue at super high prices and high valuations, so they don’t have to worry about not having a successor. When the market is extremely cold, when a bunch of stocks face the risk of delisting with a face value of 1 yuan, you issue a few hundred yuan, are you sure you are not kidding the market?

Therefore, the long-term pattern of the following figure is formed:


You can probably see the following points:

The absolute low of 1.18 was actually flat before the leveraged bull of 15. A-shares generally only have enough real bears so that there is no premium, and to what extent at the end of 2018? Some well-profitable steel companies have begun to worry about delisting at face value…

2. After three years of structural bullshit at the end of last year, although the Shanghai Stock Exchange is distorted, the average stock price will not deceive people, and the actual position of the market is only slightly lower than the 15-year peak. This is quite in line with the outlook at the time, the index is not high, but the whole market has almost no cheap plate perception.

3. As for where the current position is, I can only say it is a matter of opinion… [狗头]

Of course, take a look at the valuation percentage and you will see that the average share price does quite fit the market valuation position.


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