「Shanghai Stock Market Value/GDP」 vs 「US Stock Market Value/GDP」

🔷 Limited Comparability

Teacher RouterA mentioned that it can be compared with the US stock market @RouterA

Not to mention that the market and policy environments of China and the US are different.

China's stock market actually consists of more than just the Shanghai and Shenzhen stock exchanges; many companies contributing to China's GDP are listed on the Hong Kong stock market and even the US stock market.

Therefore, the comparability of 「Shanghai Stock Market Value/GDP」 and 「US Stock Market Value/GDP」 is very limited.

🔷 Comparison of Trends

We can only compare the trends of these two ratios.

The 「US Stock Market Value/GDP」 has been on a long-term upward trend.

The 「Shanghai Stock Market Value/GDP」 has actually been converging over the long term.

The long-term growth of the 「US Stock Market Value/GDP」 ratio may not be solely due to a bubble. After all, there are also companies from China and other countries listed on the US stock market, which increases its market value.

The convergence of the 「Shanghai Stock Market Value/GDP」 ratio may correspond to the impact of reforms and the gradual weakening of demographic dividends.

The 「Shanghai Stock Market Value/GDP」 reached its peak around 2007, after which it entered a converging trend. Correspondingly, China's GDP growth rate also began a noticeable decline starting in 2007.

It may take people a few years to react to economic trends.

The birth rate relative to GDP may have a delay; around 2007, the birth rate was relatively stable, but after an increase in 2011-2012, it began a noticeable decline from 2012 onwards.

Brother Bee's trading principle is that if one does not dare to hold long, they do not play short-term.