Chapter 823 Blow Bubbles, Blow Big Bubbles
Traditional industries are sluggish, and naturally they are not welcome when it comes to the securities market. The so-called stock value generally refers to the future cash value of the company.
You earn 2 million a year, and you earn 2 yuan per share. Then, given your valuation of ten times, this stock is worth 20 yuan.
Well, if this income remains unchanged, then there is no such thing as stock trading. You can buy it if it is less than ten times, because it is higher than the bank interest rate. It is dangerous if it is higher than 20 times, because there is uncertainty.
However, if you invest in ordinary industries, you can use PE to estimate it, but investing in high-tech industries will not work. Take Cisco as an example. Its revenue has been expanding rapidly. It is still two yuan this month, and it will be two yuan and five yuan next month.
Then, the valuation here is difficult. The current stock price is 40, and the PE of 20 times is indeed high. However, its performance is skyrocketing, and by the end of the year, it might be worth three yuan.
So, what about next year, and the year after that. Since you are investing in the future, twenty times the PE is naturally inappropriate.
If it's just a Cisco, Wall Street doesn't care, and this product will be listed again next year at the earliest. It's not their turn to worry about the current valuation.
But the problem is that these technology stocks in Nasdaq all have obvious PE premiums. For software leaders like Microsoft and Oracle, this valuation has exceeded thirty times.
Generally speaking, the valuation is too high, and major shareholders can just take the opportunity to reduce their holdings. But the problem is, that damned William White seems to have forgotten that he still has these stocks.
Investors are naturally very happy to meet a major shareholder who doesn't reduce their holdings very much. They don't care anyway, and the worst thing is to mortgage it to the bank.
If they are happy, some people will naturally be upset. If you don't sell, the market will not be active enough. If this continues, you may be delisted.
This regulation of Laomei is actually quite nonsense. The number of tradable shares is too low, which is not allowed.
Therefore, it is very difficult for you to control the game in the United States. Absolutely not, of course it is impossible, as long as it does not account for the majority.
Well, there were actually a lot of them in the 1940s and 1950s. It was a bit like the stock market in the big rabbit country. Anyway, it was all kinds of storytelling.
Then why did the hair disappear?
Because the idiots have been killed, no one invests in the stock market anymore. Everyone thinks that this is dealing with a group of fraudsters, and it is not investing in any company at all.
The Great Depression in American history was caused by moths on Wall Street. I cheated and cheated until the end, no one dared to invest, and more than half of the middle class was wiped out.
Lao Mei took a look, Nima, it's not okay to do this. So they made the strictest laws in the world.
In the United States, this securities fraud law is very awesome13. It says that you are guilty, and you have to find proof of your own guilt.
This is very different from other laws, if you steal something, the whole world will know that you stole it. If the prosecution can't produce solid evidence, you still won't be punished.
The securities fraud law is different. If you can't find evidence to prove yourself, you are guilty. Don't say anything. All proceeds will be confiscated, and you will be fined. This fine is punitive, and it can bankrupt you in one wave.
"Boss, the three major rating agencies believe that Nasdaq's valuation is too high. If it continues like this, there will definitely be problems."
"Hey, these old guys are really interesting? Do they think that they can get cheap chips like this?"
"Ahem, boss, except for these new toys, other industries are not allowed." Filson smiled wryly. They don't care about the nonsense of rating agencies.
"Filson, the old guys are crazy, are they planning to bully the fool? It's just crazy.
As for value investing, this is really ridiculous. "
William White said it was easy, but he was very upset in his heart. Now the so-called bubble, simply insignificant.
Even two thousand years later, the so-called Internet bubble is debatable. From the perspective of future generations, this is more like an extreme dishwashing.
Greenspan said in 1996 that there was a bubble. If you listened to his flicks, you would miss the entire Internet market.
Obviously, the little friends in Europe at that time were cheated to death in this way. You guys keep saying the stock market is risky, well, we listened.
Three years later, the European friends found that they were obviously cheated. When they rushed in desperately, click, the Internet bubble burst.
It's funny. Greenspan said in 1996 that there was a bubble in the Internet. This thing is a joke. In 1999, he said that the economic transformation of the United States has been successful, and we have got rid of the original development model.
Cough, wait for the European friends to enter the pit, and a group of bigwigs including Buffett Greenspan will start talking about value investing.
Well, a bit of greedy investor bashing, by the way.
As for those investment banks who fanned the flames, they originally planned to fine them three drinks. Later, it was found that it was not enough, and Merrill Lynch and Citigroup fined several million dollars.
Haha, Nasdaq evaporated five trillion dollars, how many millions did you fine?
Well, this has the same meaning as being fined three glasses of wine.
The most unlucky thing to say here is that the Germans never trade in stocks. It is this kind of person who also fell on the Internet bubble this time.
So what, when you invite people to enter the pit, why no one said value investing?
"By the way, Filson, what about Buffett? Has his investment portfolio changed?"
"No, the old guy has a good vision. He has been talking about the spirit of the United States recently. Heck, the old guy is very disapproving of the relocation of the manufacturing industry."
"Tsk tsk, where did this come from? Don't tell me, the vision is really unique. It's a pity, if it's what he said, why didn't you vote for General Electric."
"Indeed, his investment portfolio focuses on insurance and finance."
"Ha, look, it doesn't matter what a person says, what matters is that you have to see what he does." William White looked disdainful, how to say that sentence, the account will not lie.
As for Greenspan, William White didn't even bother to say it, and he couldn't speak for himself. Isn't his predecessor just not listening to greetings, and now he can only teach.
No matter how high the status of a professor in the United States is, there is no comparison with the boss of the US Federal Reserve.
However, they play as they like. He, William White, would not jump out and fire a cannon.
Stocks have been invented for so many years, and the way to make profits has never changed.
It's just a bargain hunting. Fry high and sell. The only thing that has changed is the refurbishment of the means of absorption.
Alas, it's better to be a predator, there are too many resources that can be used.
"Ahem, boss, we have recently reduced our investment, and they have also used it for publicity. I think they must be looking forward to our reduction of holdings."
"Well, there are people in the court who are easy to do things, but they think too much. So what if there is a bubble, a healthy market is properly overvalued.
However, Filson still has to keep an eye on these guys. The cost of the three major rating agencies is not small. If the estimates are correct, these guys must make a big move. "
"Okay, I know the boss."
In fact, he William White is also one of them. When talking about how greedy others are, someone seems to have forgotten that he may be the greediest one.
Why do you say that the US emperor is annoying? This is the reason. Wouldn't it be nice for everyone to make a fortune together? Nima, if you don't cheat, you will die!