Marching and fighting must have a reputation, and the same goes for stock trading. The speculation of any stock or theme by the main capital must have sufficient reasons and basis in order to attract the market to follow suit, otherwise, the main capital will not be able to achieve its ultimate goal.
There are several stages for the main funds to hype up major themes: preparing funds, exploring or discovering target themes, gradually building positions, quickly rising after completing the position building, promoting themes through public opinion, and selling at high prices. This kind of big theme usually has a long time span, and if Xiaosan keeps up in time, he can also eat meat. For example, coal and steel in May, June, and July this year are like this.
The connotation of theme hype
To hype up a topic, the first thing to understand is whether it is based on expectations or real events. If it is based on expectations, then we only care about the expected process and not about the expected results. However, we must get involved early, otherwise not only will we not be able to eat the "meat", but we may also be deceived.
A typical example is the concept of the Nobel Prize in the past, where participants had high expectations of winning in a certain research field, and related concept stocks would be heavily speculated on. However, no one cared about who would ultimately win because the profit margin had already gone, leaving only unknown leeks.
Secondly, based on the realization of events to speculate on themes, if the events are not realized, the concept speculation cannot be sustained. For example, in 2016, the A-share market failed to enter Mo, and the previously hyped concept stocks immediately ceased to exist.
Two methods of subject matter hype
1、 Undercover
Firstly, assess the potential hype points that will erupt in the near future. Through analysis, identify the sectors or individual stocks that are expected to be hyped, create a plan, and build positions in a timely manner. If expectations are not fulfilled, give up and look for the next opportunity. For example, if Brother Zhang is optimistic about agriculture and shares Huilong shares, it would be considered as a concept lurking (with intensive agricultural policies being introduced at the end of each year). However, it just happened to encounter major shareholders increasing their holdings and implementing equity incentive plans, which further strengthened Brother Zhang's optimism about Huilong shares.
There are two latent risks in the concept: one is that expectations are not fulfilled, but positions are built at high levels; The second is that there was a systemic risk after the establishment of the warehouse, although the expectation is still there, the risk has exceeded the opportunity. Both of these points do not exist for Brother Zhang. Brother Zhang was optimistic about Huilong shares and bought them before the major shareholder increased their holdings. He also made several T's in between, which further reduced the cost to just over 7 yuan, much lower than the major shareholder's cost.
2、 Chasing the rise
The main themes of chasing after rising prices are those that are particularly large and have strong sustainability. I don't recommend chasing after the rise of small themes. Major themes mainly refer to industries, reforms, etc. that involve national policies, the will or efforts of the central high-level. For example, the supply side reform implemented by the country has led to a strong and prosperous rise in steel and coal prices since June and July this year. The earlier we catch up during this period, the greater the harvest. At that time, the ones that left a deep impression were Bayi Iron and Steel, Hengyuan Coal and Electricity, etc. Zhang was fortunate enough to have some "soup".
The main risk of chasing after the concept of rising is that: firstly, the stocks chasing after the rise are not strong enough; The second is the risk of exhausting the benefits.
Six key points of theme hype
Firstly, the exploration of the theme. Having a keen perception of the market, adept at seizing and even creating market opportunities, by interpreting macroeconomic data and policy guidance, paying attention to changes in the international market, and exploring market opportunities that can be hyped up from the economic background or major industry opportunities. For example, the free trade port mentioned in important meetings.
Secondly, allocate funds reasonably. As a major subject matter for speculation, the main institutions often choose to build positions in larger cap stocks within the same category, while adopting a small amount of crazy price hikes to select small cap "leading" stocks in the subject matter. Thus achieving the goal of obtaining greater returns at a lower cost.
Thirdly, the tacit understanding and collaboration among institutions. For group themed hype, it is generally difficult for a single institution to successfully promote it as a market hotspot. Many of them involve tacit understanding and collaboration between institutions. This can sometimes be seen on the leaderboard, where one institution sells and another institution immediately takes over.
Fourthly, the choice of timing. The speculation of general theme stocks first requires macro background support, and secondly requires a profound understanding and grasp of market conditions. After a market downturn, when the entire market is relatively sluggish, a large amount of short position funds are eager to seek profit opportunities. Suddenly launching at this time can easily guide funds to become promoters of hot topics.
Fifth, media hype. A larger topic cannot be hyped without media hype, but many experts, scholars, commentators, and analysts may inadvertently become promoters of this topic hype while expressing their views on it in public media.
Sixth, the importance of following the trend. In driving the market trend, the relationship between subject stocks and indices is often extremely close. The launch of the market trend is often when the market hesitates, the rise is often when the market forms a clear bottom, the shipment is often during market fluctuations, and they often create some short-term opportunities when the market breaks down, luring many out. This is also a way for us to perceive the direction of market trends based on the speculation of subject stocks. In other words, when investors see many stocks exhibiting a bullish trend, it is highly likely that the market will experience a significant decline in the short term.
The main strategy for sensationalizing the theme is to learn the strategy, seize the opportunity, make quick decisions, and not be obsessed with battle. Firstly, it is a speculative behavior by speculative investors. When people gather firewood, the flames are high, but when the people who collect firewood leave, the fire goes out. Secondly, these types of stocks have the characteristics of being phased and highly time sensitive, known as "expired without waiting", with weak sustainability. Once fully understood, the speculation of subject stocks is also nearing its end.
