An interesting phenomenon - Security and compliance of cryptocurrency exchange platforms

No matter which stock drops,

there will always be a bunch of people saying it’s because of the fundamentals.

Could it be that the fundamentals have actually worsened,

causing the stock price to fall?

Or in other words,

does a stock price decline necessarily mean the fundamentals have deteriorated?

Few people seem to truly understand the saying, “The market is a voting machine in the short term,

but a weighing machine in the long term.”

Of course, there are reasons for stock price declines,

but these reasons are very likely unrelated to the fundamentals.

For example, a large institution gets liquidated,

causing its holdings to plummet in a short period.

Or the risk-free rate increases,

does that have anything to do with the company’s fundamentals? Or a large fund is continuously redeemed,

forcing it to sell its heavy positions,

which also causes the price to fall? Conversely, an increase can also happen for the same reasons,

rises are always justified,

but probably not because the fundamentals have improved.

Many times,

a rise is simply a reason to keep rising,

a fall is just a reason to keep falling.

So, the only ways to make money are basically two:

One is to treat the market as a madman,

and simply discount free cash flow.

The premise is that the chosen company is strong enough,

understood deeply enough,

and the money used is long-term idle funds,

holding long-term to earn the company’s free cash flow returns,

without caring about the ups and downs of the stock price.

The other is to understand what the market maker is really thinking,

and the logic behind trading.

The temperament of the market maker is actually human nature,

a collective of living people,

always greedy at any time.

Chasing gains is greed,

thinking it will go higher again.

Selling on dips is also greed,

thinking it will go lower again.

When everyone in a market has no floating gains left,

the motivation to sell actually disappears.

Because apart from high-frequency quant trading,

in the big A shares market, you can only make money by going long.

This is why many people conclude that the big A market always rises to a bubble,

but the declines are never deep enough.

Because,

only when there’s a bubble can everyone make money,

and when it falls to the point where everyone is losing money,

no matter how absurd the valuation,

it can’t go down any further.

The short-term price of any stock is driven by voting,

and has little to do with the company’s actual value,

which is the discounted future free cash flow.

Anyone hoping to profit from stock price fluctuations is a speculator.

Understanding what you are really doing is actually crucial.

**$SPK **$TAG **$RESOLV **