Lin Chunman: Win The Market Mentality.

Just confirm bias with fear or greed has produced such a great effect, which is why the stock market is difficult to have a reasonable price, and reasonable will not happen in reality.

In the beginner's investment, most people will think that basic analysis can be done to understand the operation and financial status of the company, and some of them can be found.

Lin Chunman, founder and chief tutor of Tong Fu Business School in Hongkong, told the author: "behind the stock market, there must be another factor -- psychology, because it is difficult for people to make an absolute rational decision, which is more or less related to personal preferences and opinions. It is difficult to understand the hard data that other people estimate for the same investment. This is the field of investment psychology research."

Lin Chunman said: "investment has a psychological impact of at least more than half, some individuals will have 90% of the investment decisions are psychological.

Fear and greed are the most fundamental and greatest influence of human beings. If people can eliminate these two points, they probably have become Buddhas.

Big or big crocodiles make use of these two points to make profits, create a positive phenomenon and then go backwards, as the stock market has risen sharply in the past year, and the stock index has doubled in one year. Does a rational person know that there is a problem? How can a company almost suddenly increase its value in one year? But the stock market is indeed rising and rising, and people's greed is coming.

In particular, people have herd mentality. Just like when you get to the station, even if you don't know the way, you see everyone is heading for the same direction. You will follow suit. Others make money in the stock market, and they also want to make money. Others say that the stock market is infinitely good and they want to follow, but in the end, a game of leverage will reverse the whole game.

Now that the stock market is not playing, where is the greed? Lin Chun man has noticed the recent rise in housing prices in Shanghai and Shenzhen. He said: "what kind of economic downturn does not seem to exist, because people tend to believe something that can be seen, just as the property price rises. As long as there is such a phenomenon, then we believe any so-called reason for supporting this phenomenon, for example, the state must continue to develop these key cities, this area is different from other areas.

Whether these reasons will become a reality is still unknown, but people's greed will act first, so long as they buy up and make money, they will believe.

What is rational analysis? People tend to believe in rational analysis that supports their own greed. This is the effect of "recognition bias" in behavioral economics, because market information is too much, and people can not digest completely, so they tend to believe in news or information that is favorable to their own interests.

Lin Chunman said: "just confirm the bias with fear or greed has produced such a great effect, which is why the stock market is difficult to have a reasonable price, and reasonable will not happen in reality.

Even if the largest mature market in the United States, 2007 is not a real estate bubble burst, triggering a 30 year financial tsunami?

"The predators rely on a series of" credible "institutions or media to disseminate true and false news. The messages are distributed to enhance and manipulate individual investors' greed or fear, so that they can buy when others fear and sell when others are greedy to the extreme.

He said.

Lin Chunman said: "more experienced people will read the truth and false, and will also use false news to layout their investment.

You see, those rating agencies recently wanted to attack China.

In order to achieve the effect of the 2007 financial tsunami or the bursting of the Japanese debt in 1991, China is fighting well now. Fortunately, our RMB is not completely open to the outside world, otherwise the crisis is really huge. "

"There are still a lot of worries behind the stock market. The stock market will be mostly in the concussion market, and at the same time, there will be a risk of a steep fall.

At present, the US stock index RSI has entered more than 60.

It's not appropriate to rush out.

If the US election in November is a madman, the stock market will crash at any time. Before the crash, even if there is a rise, there must be psychological preparation for jumping at any time and getting on the train. Short term entry and exit will reduce the opportunity for the wrong side.

In the face of such a changeable market, Lin Chun man suggested investors: "first, we must have a good foundation, the right basic investment knowledge, such as a normal economic cycle and an artificial economic cycle; and then we must understand technological analysis in order to rationally sell and operate; finally, we must understand investment psychology and conduct economics, so that we can know ourselves, from martial arts to law."

Lin Chunman believes that investors can not invest all their assets before they have the perfect investment ability.

"We must understand that haste makes waste, and investment and financial management must start from inside to outside, and then from outside to inside.

The prophet's own financial goals and calculate the amount of return required, and then look at the market situation and future cooperation, and then check whether they are guilty of investment psychology, such as the above said "confirmation bias" or "herd mentality".

If a rational asset allocation or analysis has been made, the whole investment will be a lot of money. "

Lin Chunman said.

"Whole

Processes need learning.

You can read books, practice practical courses instead of theoretical ones, follow your mentors' study, or lose 5 or 10 years in the market, so that you can experience and absorb useful coping strategies.

And the key is to keep the whole body back every time, lose money and not lose it. Keep your confidence and don't lose, otherwise the next opportunity can't be grasped by you. This is also an important part of investment psychology.

Lin Chunman finally said.