1. Why does the market lead the economy? Because investors on the front lines of the industry have expectations for upcoming changes. Smart investors notice the decline in orders and demand from leading companies, and will sell the company's stocks. They are aware of the company's risks before the management is aware of them. On the contrary, if the company's orders are full and the orders are strong, it will buy the stock. This quick insight is the basis for the rapid reaction of the stock market [see the underlying logic of investment or speculation]

2. By how much does the stock market lead the economy? According to the author’s statistics at that time, the European stock market led the economy by 6 to 9 months. The financial data will not be reflected until the stock rises for 6 to 9 months (then the risk of cashing out).

3. The stock market contains elements of intervention and manipulation. The market is not always correct. There is also moisture in the barometer (Eastern yin and yang principle). The market is often irrational [PS: The market is emotional. When it rises, it will bubble up, and when it falls, it will fall out. value】

1. During the tulip bubble in the 17th century, one bulb was equivalent to a paper mill. People reflected on how a flower could be worth so much. As prices fell and more people became aware of the problem, the market collapsed and the Dutch economy became chronically depressed.

2. The market is made up of millions of people. Under the influence of market sentiment, people always buy with greed and sell with fear. The market is dominated by fantasies and hysteria.

3. The irrationality of groups in the market also leads to the third principle: the market is unpredictable in the long term.

1. Why is it unpredictable? Because of the butterfly effect, the author believes that any small change may lead to completely impossible results. PS: Then why do regulatory agencies still intervene in the market? We need to think independently and not just follow what we believe. Most of the time, regulatory policies can change market expectations. When they cannot, we need to think about why? How to deal with exceeded expectations? .

2. Human nature will magnify the slightest disturbance infinitely. You can predict that the stock market will fall, but you cannot predict when or where it will fall.

3. Precisely because the economy is often affected by small details, predicting long-term trends is futile. [PS: Constantly revise the expectations of research and judgment]

4. Peter Lynch said not to predict the market two years from now. It is impossible. Half right or half wrong is called blindness.

5. Since they are unpredictable, what is the value of economists and market analysts? But it is their work that drives the financial market’s psychological expectations to be as consistent as possible and to constantly move closer to the objective world. In fact, they often misunderstand. In order to overcome irrationality, traders hope to use technical graphics to discover the law of price changes, but technical graphics are also the result of people's minds.

1. Technical graphics are the result of people's trading. 1,000 people, 900 technical traders, 100 value investors, 900 technical traders believed that there was pressure to sell at the previous high and then pulled back. 100 valuers also think this is the case. The next time it rebounds and the pressure is high, 1000 technical traders will short-sell to realize the self-realization of technical graphics. 【Behavioral Resonance】

2. Professional traders are more likely to make money than amateurs because they can make correct decisions only by mastering "valuable" information. Lead to the second chapter

1. News information, subject announcements, etc.

2. Trader’s trading information: (there are two types of traders) Increase or decrease the target position, the proportion of traders with high and low historical trader prices,

1. Regret. I didn’t get on the market when it rose sharply. I regret being short. When the stock price falls, rush in.

2. Conceited, subconsciously believing that making money is due to one’s ability, not luck. subconsciously think that oneself Having mastered extraordinary investment levels, you lose caution in trading more frequently, resulting in losses.

3. Adaptation means following the trend. It is especially easy to give in to the opinions of the majority and listen to the advice of the black mouth.

4. Self-defense, the later result will be opposite to the initial result, will not admit the mistake, and will not stop the loss if it is stubborn. Misinterpret uncomfortable information and comfort yourself with excuses and favorable information. Don't look at it when you are losing money.

[Explanation process of money-making effect]

The rising stage is determined by the mentality of investors. How long will it last?

When will the decline end and where will it fall?