Fire Ox Year: Extraordinary Moments in Wall Street Stock History: Extraordinary Moments in Wall Street Stock History

Author: Friedson
Publisher:
Publish Date: 2004-04-01
Features: This series of books tells you a series of real stories in the long history of American financial development. It talks about the changes of Wall Street, the monopoly of a country—America, the causes of turbulence in the financial field, and so on. It analyzes how human nature's greed and desire for money are entangled in historical events. This is a highly readable book, serving as a repository for showcasing one's knowledge and high taste after meals. This book points out that accurately estimating the future of the stock market is a very unrealistic goal. However, by examining history, some clues can be obtained, which helps in estimating the arrival of the next stock market opportunity. To find such clues, this book attempts to examine the 10 best years of the 20th century, proving that there are indeed some commonalities. , this book conducts research based on the Gregorian calendar, i.e., it statistically analyzes the price changes each year and selects the 10 years with the largest annual price increases as research targets. Although many annual strong correlation factors exist in the influencing factors of the securities market, such as the publication cycle of corporate financial statements, the distribution cycle of enterprises, and the cycles of political events like general elections, when conducting trading research, the Gregorian calendar is not a good research unit. Because the market is a complex interplay of multiple factors, many of which are not strongly correlated with the annual cycle, the interaction will inevitably dilute the significance of this non-market unit. Especially with the development of related tools such as information acquisition and transmission technology, the probability of a spectacular rise in the stock market within a year has decreased, thereby reducing the importance of studying this possibility. In other words, even if this research related to the Gregorian calendar is valuable, it is mostly limited to statistical significance, such as performance comparison and evaluation of asset management institutions like fund management companies. From this perspective, studying special market events—i.e., what this book refers to as "market shocks"—and "price fluctuations from peak to trough" seems to be more practically meaningful.
Second, the research in this book shows that relevant theories of the securities market, such as the Efficient Market Theory, cyclical theories, and certain traditional analytical methods, such as the Price-to-Earnings Ratio method and fundamental analysis, cannot adequately explain the research sample (the years with good news), while only monetary factors seem to be "playing a significant role." Although this inference can be supported by the event in this book, it is not sufficient. Monetary factors (mainly referring to changes in interest rates in this book) are indeed one of the most important factors affecting the securities market, and under modern credit conditions, the intensity of this influencing factor seems to be increasing, and its mode of action also tends to become more complex. However, this factor can only take effect through a series of transmissions, such as influencing the confidence of relevant entities. Many theories that this book considers to have failed are indeed aimed at important elements in this transmission sequence.
Third, the conclusion of this book suggests that a possible condition for a good year (a major bull market) is "low prices and an unexpected easing of credit." It should be said that this conclusion also only has reference value, because "low prices" and "unexpected" are subjective judgments. As post-event standards, they can be accepted, but they cannot be used as pre-event standards to provide accurate judgments. From this perspective, the opportunity selection and grasp of securities trading emphasized in this book is more of an art than a science.