The day before yesterday, the A-share trading volume was 2.74 trillion, of which the Shanghai and Shenzhen 300 index traded 0.63 trillion.
Yesterday, the A-share trading volume was 2.57 trillion, of which the Shanghai and Shenzhen 300 index traded 0.55 trillion.
China Communications Construction Company, which accounts for about 1% of A-share net profit, had a trading volume of around 1.5 billion, accounting for 0.06%.
In plain terms, the Shanghai and Shenzhen 300, which has a profit ratio of about 70%, accounts for about 20% of the trading volume.
I don’t have the data for the US stock market, but I guess the S&P 500, with a profit ratio of about 80%, has a trading volume of around 80%?
There is no right or wrong, just a fact that exists in reality.
Currently, the price-to-earnings ratio of the CSI 2000 is about five times that of the Shanghai and Shenzhen 300, and there are about 500 loss-making stocks.
Blue chips stabilize the big picture, while there’s chaos and excitement in the market; I feel this state is quite good.
As long as there is no bubble in the Shanghai and Shenzhen 300, there will be no systemic risk and no overall stock market crash.
Blue chips earn a reliable dividend yield of three to five percent, which is better than deposits or government bonds.
In mutual agreement in the chaos, willing to gamble and accept losses, it’s better for profits to stay within one’s own field than to flow into Las Vegas.
Moreover, small seedlings outside of the Shanghai and Shenzhen 300, with proper nurturing, can definitely grow into big trees that bear dozens of apples like Microsoft, Google, Facebook, Eli Lilly, Boeing, etc.
I hope those who made a lot of money in the chaos can take some profits, while I secure my holdings in China Communications Construction Company AH, but I have nothing to stand on.
Based on this year’s net profit of 25 to 30 billion, and next year’s 15 to 20 billion.