Hello! I'm your financial analysis assistant. This article, from the official account of the Shanghai Stock Exchange's investment services (reposted by CICC Wealth), is a very sharp and humorously written short essay on investor education. It doesn't talk about complex candlestick charts or financial reports; instead, it exposes a long-standing paradox in the A-share market – the traps in the rhetoric of stock commentators.
To help you fully understand what the article is about and the market logic behind it, I will first summarize the key points and then break it down in five dimensions.
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📝 Key Points Summary
The article reveals an absurd phenomenon by listing eight common phrases used by stock commentators: no matter whether it's a new stock issuance, market fluctuations, or pricing levels, commentators always find a set of seemingly reasonable but actually contradictory arguments to cater to public sentiment. These views are not based on rigorous economic logic but are intended to provide emotional value to investors during emotional ups and downs. The article concludes that the real market constraints can only be verified over a sufficient length of time, not by short-term rhetoric. It urges investors to be discerning, to avoid blindly following those who only pick faults or are overly optimistic, and to focus on the long-term patterns of the market itself.
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🔍 In-Depth Analysis: Five Dimensions for a Clearer Understanding
1. **Phenomenon Analysis: The Comedienne Nature of Stock Commentators and Logical Paradoxes**
The most interesting part of the article is the list of eight phrases. These can be seen as a logical dead-end. Commentators don't have a fixed stance; their position entirely depends on the current market outcome:
- When the outcome is negative (market decline, underpricing, no profit): They blame the system or the market.
- For example, if the market falls, they say it's due to IPOs taking up funds.
- If a new stock underprices, they say it undermines investor confidence.
- If there are no profits from new stock offerings for a long time, they say there's a lack of “fresh blood” in the market.
- Subtext: “The market is sick; it's the system/environment's problem, not mine, but I can explain why you lost money.”
- When the outcome is positive (market rise, overpricing, high valuation): They blame speculation or greed.
- If a new stock soars, they say it's a bubble.
- If a company overprices its shares (raises too much capital), they say it's a waste of resources.
- If the pricing is market-driven (high), they say it's exploiting investors.
- Subtext: “The market is crazy; it's due to human greed, but I can explain why you made less money or took on more risk.”
- The most ironic point (the eighth phrase): If market enthusiasm is high and overpricing seems acceptable, commentators immediately change their tune, saying “overpricing is a false issue; we should respect the company’s autonomy.”
- Interpretation: This shows that so-called “professional opinions” are often just 风向 indicators. They change with the prevailing sentiment. This kind of “always-right” rhetoric is essentially a form of emotional comfort rather than rational analysis.
2. **Psychological Analysis: Why Do We Listen to Stock Commentators?**
The article quotes a poignant statement: “The most important function of a stock commentator is to make you feel right when you’re upset.”
- Emotional Resonance > Truth: Retail investors often have an information and capital disadvantage in the stock market. When they lose money or miss out on opportunities, they feel anxious and angry. A commentator who blames the system or accuses the market of exploiting them can make them feel understood and comforted.
- Popular analogy: It’s like when you do poorly on an exam and a teacher criticizes you; if a classmate agrees that the exam was unfair, you might think they “get it” and are “just” on your side, even though they didn’t do well either. Commentators play that role.
- Confirmation Bias: People tend to look for information that supports their preconceived notions. If you already think new stock offerings are bad, a commentator’s criticism of “capital extraction” will be believed; if you think they’re good, their approval will be trusted. Commentators exploit this by providing a sense of identification rather than providing factual information.
3. **Logical Analysis: The Double-Edged Sword of Market-Driven Pricing**
The article mentions: “Of course, we can’t blame all problems on stock commentators; some of their views (favoring marketization) are indeed insightful.”
Here’s a crucial concept to clarify: What is a truly rational market view?
- The essence of market-driven pricing: New stock prices should be determined by supply and demand.
- If a company is good, investors will buy, leading to high prices (overpricing).
- If a company is mediocre, no one will buy, leading to low prices (underpricing).
- This is a healthy mechanism: It directs funds to good companies and weeds out bad ones.
- Commentators’ distortion: They want both the efficiency of marketization and the fairness of a planned economy.
- They want new stocks to be cheap (for easy profits from new offerings) and to rise in price (for profits from holding them).
- They want high prices to show company quality and low prices to protect retail investors.
- The contradiction: True marketization comes with volatility and risk: Underpricing indicates rational pricing, while soaring prices indicate scarcity. Commentators try to impose moral standards on a market mechanism that inherently involves these risks.
- The author’s stance: Only long-term experiments can reveal the truth. In the short term, there will be bubbles, underpricing, and speculation, but in the long run, only companies that create value will stand the test. Commentators focus on short-term fluctuations and ignore the long-term return to value.
4. **Role Analysis: Who Are the “Rider” and the “Donkey”?**
The article ends with a thought-provoking line: “As for whether to care about the feelings of the rider or the donkey, that’s less relevant to stock commentators.”
- Metaphorical interpretation:
- The donkey (market/system): It carries transactions and must move according to economic laws and supply and demand.
- The rider (investors/companies): They are participants whose interests are tied to the market’s direction.
- Commentators (onlookers/analysts): They watch from the side, commenting on the donkey’s speed or the rider’s posture.
- Deep meaning: Commentators’ interests are disconnected from the market’s long-term health.
- If the market rises steadily, they may feel bored and lack material for their commentary.
- If the market fluctuates wildly, they have more to say and gain more attention.
- Therefore, they may prefer a market full of emotion and controversy to maintain their influence.
- Implication for investors: Don’t expect commentators to think from your perspective. Their goals are traffic and attention, not your returns.
5. **Action Steps for Ordinary Investors**
Now that we understand the tactics of stock commentators, what should we do when facing new stock offerings and market fluctuations?
- Step 1: Develop an emotion-neutral perspective. When you hear terms like “capital extraction” or “bubble,” don’t react immediately. Ask yourself:
1. Is the view based on data (P/E ratios, industry trends, capital flows) or emotion?
2. Is it self-contradictory?
3. Does it prompt impulsive decisions?
- Step 2: Understand the normality of underpricing and soaring prices. Accept that the market is risky. An underpriced new stock doesn’t mean the market is bad; it might just be overpriced or the company’s fundamentals are weak. A soaring new stock doesn’t mean the market is crazy; it might reflect scarcity. Don’t judge economic behavior with moral standards.
- Step 3: Focus on long-term value, not short-term noise. The article emphasizes that history shows that the market has strong constraints over time.
- Explanation: Time is the best filter. Short-term speculation and bubbles will be smoothed out. Excellent companies’ prices will reflect their value; poor companies will eventually fall.
- Advice: Shift your focus from what commentators say to the fundamentals of the companies and the market. Read more financial reports and analyze industry trends, and avoid emotional comments.
- Step 4: Think independently and be wary of “free lunches.” Commentators’ views are free, but their positions are driven by interests (traffic, advertising, influence). Remember, no commentator can predict the market or be responsible for your investment outcomes. Your money is your own, and your decisions must be based on your own judgment.
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💡 In Summary
This article isn’t about how to trade stocks but about how to avoid being misled. In the A-share market, noise always outweighs signals. Commentators exploit human weaknesses with contradictory rhetoric to create anxiety or satisfy vanity. As investors, the most valuable skill is to remain calm amidst the noise, trust long-term patterns, and avoid being influenced by short-term emotions.
Remember: The market doesn’t owe you explanations, and commentators don’t owe you the truth. Only time and value will be the ultimate judges.