Cobweb theory of stock market

 Ten years ago on the international trade class, there is a theory called products, so much the second year of supply, farmers will lose money. the third year, as farmers abandoned the product, so that prices of agricultural products will. and so on, always in such a price increase of agricultural products and the cycle of price swings, like a spider's web. Cobweb has a characteristic, it is the silk is not a closed circle, in mathematical terms is not convergent. This is different from general merchandise, general merchandise interaction of supply and demand will eventually form a stable price to balance supply and demand. happen to the farm two years a vivid example of, for example pork, pork and lower the year before, the results of last year's price hikes, but also catch up with the blue ear pig disease, worse. is finally over again, they have met once in five years without snow, frozen to death a small number of pigs, pork prices have not so much a callback, so that investment firms like Goldman Sachs have seen in China Pig in the huge business opportunities, but then again may not necessarily less optimistic.
stock trading in general demand and supply of similar goods, the valuation by buyers and sellers in the game to achieve relative stability, which is the basis of value investing . the market like the United States last year to now having so many problems, at least much greater than we, the stock market will adjust the year down a little more than 10%, 20% from its peak a little more than counting. to look at China the stock market is not like this, and maybe it is because of China's peasant population, the majority also reasons, anyway, the law of China's stock market more in line with the cobweb theory of agricultural products, the valuation of volatility is not convergence, it seems that the total in the two extreme swinging between, or the upper limit of the valuation, or straight to the bottom limit.
this time last year,cheap UGG boots, researchers recommend a high-priced stocks, said after two years you can see 500. of course, is conclusive reason, orders have been routed to three years, the annual production capacity continues to grow, net profit margin continues to increase. but it is now clear that from the target price has been extremely long, how many people did not mention it again. same time last year, if you go to the bank, the total will find the account manager to sell you funds, they said, the market definitely up, the only question is how much can be gained. One year later, the scene is still very similar can be said, but exactly the opposite direction. If you open the stock market software will see almost every day down, the only question is how much can be lost; and the high price for the shares of bird has estimated that researchers will tell you, do not sell now even worse next year because the economy will decline next year, orders will be down, wool decline in interest rates will eat profits by that time you will find that the valuation is even higher, not even lower.
this point of view to invest in China's stock market value can not be said to be applicable, if applicable,Discount UGG boots, at best only partial , the short time to apply. then watch from the other laws of the stock market, the stock market lower limit of what discipline to learn it? historical price-earnings ratio is now the low end, if this is not the end of the lower limit,UGGs, then there may be three laws, one The total market value fell below 50% of GDP last year, this point about 1900 points; the second is to reach a record low PB1.74 times book value, about 1500; the worst one is the decline in the past 80 big bubble burst %, about 1250. Where the final end, it is not known, but the old adage tells us: history will not repeat a simple, but each time its own laws to be found. What is the law? If someone guessed it,bailey UGG boots, successful hunters will be received a lot of money.