All the good news that should have been released has been released, but the market still hasn't broken out of the bull market pattern. On the contrary, the market seems to be continuing the bear market, and after a round of not very strong rebound, it continues the downward trend. Originally thought that after the market's drastic reforms and the upgrading of various systems, it would usher in a new life. However, in the face of the sluggish market and unsustainable volume, A-shares still seem to be that A-shares. What's more worrying is that more and more mines are being exposed, and the market is accelerating the clearance. Isn't it said that reforms should be carried out, dividends should be distributed, the market should be standardized, and then a big bull market will come? Why hasn't the big bull market come, and the loss effect is still spreading. How many investors' accounts are now worth less than at 2635 points? The index seems to have risen, but in fact, it hasn't risen; the individual stocks seem to have the opportunity to make money, but in fact, they haven't made money. A-shares seem to have played all the cards, but they just can't make the market better.It's as if a sick patient has undergone a comprehensive examination in the hospital, followed by drug treatment and rehabilitation therapy, yet still fails to regain vitality.

Where exactly does the crux of the problem lie?

Most people would think there are two issues.

The first one is the suboptimal macroeconomic situation.

We are accustomed to the high growth of the past two to three decades, so we feel that the current economic situation is not ideal.

It's like being used to delicacies from the mountains and the sea, and then finding a home-cooked meal to be tasteless.

Advertisement

But the reality is that although the data has declined compared to before, it is not particularly bad.

The recovery of macroeconomic growth requires a certain amount of time and cannot be achieved overnight.

Many aspects are progressing in an orderly manner, and overall economic development is still relatively good, which can be seen from the GDP data.

Do not question the authenticity of GDP; even foreign media have not questioned it, which is generally true.Moreover, even when the macroeconomy is very good, the A-share market has not seen a significant surge.

The bull and bear markets of A-shares seem to have less actual correlation with the macroeconomy, so blaming the macroeconomy is obviously unreasonable.

Secondly, there are too many inside stories in the A-share market.

What exactly these inside stories are, I won't elaborate too much, those who understand will understand.

The so-called inside stories refer to various kinds of people treating A-shares as an ATM.

The ATM for fundraising through IPOs, the ATM for major shareholders to cash out, and the ATM for making money through illegal trading.

There are also various financial institutions that want to take a share of the A-share market.

Some are allowed by rules, some are finding loopholes in the rules, some are in the gray area, and some are even in violation of the rules.

More importantly, the cost of violating the rules is too low, fines and so on are just a drop in the bucket.

When the cost of doing bad things is very low, it naturally encourages some not-so-good practices.However, insider trading itself must exist in the capital market, which is inherently like this.

It is not only the A-share market that has this problem, but the global market does too, so why is the situation of the A-share market particularly special.

The above two issues are part of the problem, but they are definitely not the crux of the problem.

The A-share market has not been without a bull market, but it cannot maintain the pattern of a bull market.

The A-share market is repeating a cycle, and the problem that has not been solved to this day is polarization.

The so-called polarization refers to the polarization of performance.

There are too many small and medium-sized innovative enterprises in China, but the growth potential of these enterprises is weaker than expected.

The unsolvable polarization refers to a group of stocks with stable performance, but limited growth potential and imagination space.

For example, a large number of state-owned enterprises and central enterprises have good performance, but there is no good growth expectation.Small and medium-sized enterprises (SMEs), seemingly with excellent themes and promising prospects, always fail to deliver the expected results.

80%-90% of stocks rely on theme speculation, while only 10-20% of stocks have solid performance support.

This large-scale pattern has shaped the entire A-share market and has led to a large number of retail investors being harvested in the A-share market.

The market's fragmentation has not formed a survival of the fittest, but has instead turned into a situation where even chickens and dogs rise to the sky.

This is the biggest problem in the market.

Recently, many ST stocks, *ST stocks, and even stocks labeled for delisting, are still being wildly speculated.

Knowing that the stocks are going to be delisted, there is still a large amount of capital being speculated, which is very abnormal, and the market's game is greater than investment.

Why is this the case? Because gambling is illegal, but speculating in the stock market is not illegal.

When you release your nature in the stock market, the harvesting sickle is getting closer and closer to you.

The market's own polarization is the same in other global markets.Compared to the global market where penny stocks are everywhere and neglected,

the biggest problem in the A-share market is the overvalued junk stocks that are held in high regard.

The term "held in high regard" does not necessarily mean high prices, but rather high valuations.

Losing money companies enjoy a market value of several billion, isn't that being held in high regard?

Why are these thematic stocks being hyped? In fact, there are reasons for it.

On one hand, the thematic stocks themselves have good concepts, which are indeed the needs of the times.

For example, many technology-related companies do have certain technical strength and can ride the wave of technology.

On the other hand, the good profit effect naturally attracts capital.

Everyone is thinking about making quick money, and the speed of making money by speculating on stock prices is obviously much faster than the few dividends each year.

The thematic stocks of others finally deliver performance, while our thematic stocks end up in a mess.This has also shaped our stock market, where prices rise and then fall, while other people's stock markets seem to only rise and never fall.

On one hand, it is the cyclical capital that drives up stock prices and then cashes out.

On the other hand, the stocks that are driven up lack actual performance support, and they inevitably fall after rising.

The main reason for the market's decline is the continuous squeezing out of the "water" that appears in each bull market.

Even the big white horses follow the same logic, squeezing out the "water."

A 20 times P/E Moutai is a good and cheap company, but a 70 times P/E Moutai becomes a good but very expensive company.

If we compare it to Coca-Cola, which has been rising for 15 out of the last 16 years, its P/E ratio has always been around 20 times, and its dividend rate has been stable at 3% for a long time, with no particularly large bubble.

A market that cannot squeeze out the bubble is destined to be fraught with crises.

Of course, there is also a problem, which is that investors are not mature and are eager to get rich quickly.

Therefore, investors themselves do not care about the quality of the listed companies, but only care about whether the stock can rise in the short term.This somewhat distorted investment philosophy has led to a large influx of funds in the market specifically targeting inexperienced investors for exploitation.

This is not the same as the mutual competition that large funds are accustomed to in the international market.

In the early stages of maturity, the market is bound to be dominated by the big fish eating the small fish. After reaching maturity, it will evolve into a scenario where the big fish tear each other apart.

In that era, those who remain are mature investors and professional investment institutions.

Junk stocks will naturally be ignored, while quality companies will be hyped up based on their performance. Ultimately, the overall market will gradually form a slow bull pattern under the influence of heavyweight stocks.

Issues with the system can be slowly reformed, but the fundamental issue of the performance of listed companies can only be verified by the market. We can only wait for the true differentiation to be completed and find those companies that are suitable for investment.

The stock market, in the end, is about survival of the fittest.