1. Has 24 trillion in market value really 'disappeared'?
Market value evaporation ≠ real wealth loss, where did the real money go?
From the peak in 2017 to the end of 2018, the market value of China's A-shares 'evaporated' by nearly 24 trillion. What does this concept mean?
Higher than the entire GDP of 2015.
Equivalent to the cost of 18 Beijing-Shanghai high-speed rail lines.
Equivalent to the fortune of 344 Buffetts.
But the truth is: not so much 'money' actually entered the market. Behind this is actually a 'digital illusion'.
The actual invested capital may only be a few trillion, leveraged the overall market value through marginal transaction prices. For example:
You have three acres of land, sold one acre to someone else for 10,000 yuan, the market price is 10,000 yuan per acre, and the other two acres are valued at 20,000 yuan.
If someone else sells it at a high price, each acre rises to 20,000, and your assets become 40,000.
Finally, someone buys one acre for 1 million, and your paper wealth suddenly becomes 2 million.
But in the end, the market is sluggish, and the transaction price returns to 10,000 yuan per acre, and you drop from 2 million to 20,000.
This is the 'marginal leverage effect'—market value is just paper wealth, not everyone can cash it out.
2. Why does retail investors' money evaporate the fastest?
99.4% of investors in A-shares are retail investors, accounting for 50% of the market value.
Why do they suffer the most losses? Because they can't do the following three points:
1️⃣ Not daring to buy at the bottom: either no money or too panicked during a decline.
2️⃣ Like chasing up: entering the market only during rises, with obvious cost disadvantages.
3️⃣ Greed prevents exit: reluctant to leave the market at high points, missing selling opportunities, deeply trapped in a bear market.
Retail investors have no 'financing rights', no 'low-priced chips', and can only rely on 'buying low and selling high' to make money. But most people can't do it because:
The fate of retail investors is not that they are not smart, but that they are too emotional.
Chasing up, supplementing down, and by the end, exhausted all resources.
Making money relies on luck, losing money relies on skill.
3. Not understanding the rules, destined to be harvested.
The biggest difference between the stock market and a casino: whether there are rules to follow.
Many retail investors enter the stock market without rules, systems, or processes, relying entirely on intuition. They are eventually 'educated' by the market.
But those who can truly profit in the long run adhere to three principles:
Programmatic thinking: there must be standards for review, and there must be plans to control risks.
Resist temptation: don't get distracted by stories of short-term wealth.
Making money relies on discipline, not on being smart.
A true expert is never someone who operates every day, but rather someone who knows when to 'endure'.
Final words:
It's not that you're not smart, but that you are too easily shaken.
It's not the market that loses you money, but you paying 'tuition'.
Retail investors must recognize one thing: you are not here to change the market, but to adapt to it.
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