It’s boring to hear too many jokes, and it’s great wisdom to be able to understand the truth from a small story.
A sow is currently priced at 100 yuan, and it is sold as 100 shares. The price per share should be 1 yuan. The problem that this elementary school student will not be wrong will be different in the stock market. Suppose you register this sow into the Phoenix Group and issue 100 shares of Phoenix Group. How much do you think the value of Phoenix Group’s stock is per share? If these stocks are listed, what price do you think the shares of Phoenix Group will trade?
The answer is that it can trade at a price of 1 cent per share, because investors will think that sows will be old and die, or they may trade at a price of one hundred yuan per share, because they will think that sows can produce 10 small per half a year. Pig, and when the pig grows up, it will have a piglet. It’s really a source of money, never ending!
As long as the raising of this sow, Zhang Wei, the chairman of the Phoenix Group, can convince the stockholders that the sow’s fertility is very strong, and her management ability is also very strong, the Phoenix Group’s stock has been fired. It is not surprising to go to thousands of dollars. There is no doubt that Phoenix Group’s company introduction will not say that they only have one sow, it will tell investors that the group is engaged in a challenging business such as “feed purchase, good seed cultivation”.
What is the relationship between stock price and the value represented by stocks? Wall Street has circulated such a story: two speculators traded a can of sardines. Each time a transaction, one party bought the can of sardines from the other party at a higher price, and continued to trade, both sides made a lot of money. One day, one of them decided to open the can and see why a can of sardines was sold at such a high price. He found that the can of sardines was stinky. He therefore accused the other party of selling fakes, and the other party replied: “Who made you open? This can of sardines is used for trading, not for eating!”