Economics

What Happened Today? According to reports from the Securities Times, on October 9th, the two A-share markets showed a weak downward trend, accelerating into a sharp plunge at the close. The Shanghai Composite Index fell nearly 7%, losing the 3300-point threshold, while the ChiNext Index dropped by over 10%. The total trading volume for both markets exceeded 2.9 trillion RMB, and more than 5,000 individual stocks declined. Reasons for the Surge Regarding the previous market surge, I have already provided an analysis in an earlier article. Interested readers can view the article 《On the Historic Surge Day of A-Shares: False Prosperity or Steady Ascent?》 for further details. ...

A Day of Miraculous Gains Today, the Shanghai Composite Index opened higher by 10%, but immediately slid down, ultimately closing up 4.59% at 3,489 points. The total trading volume of the two markets reached a massive 3.45 trillion yuan, setting a new historical high. What is particularly noteworthy is that almost all stocks hit the upper limit at the opening, regardless of whether their performance was good or bad, or whether their P/E ratio was high or low. This market trend can be described as a unique phenomenon unseen in decades. ...

During hyperinflation, currency rapidly depreciates, leading to a sharp decline in purchasing power. To protect wealth in this environment, the following assets are usually considered relatively safe: Precious Metals Gold and silver have historically been viewed as hedges against inflation. Their intrinsic value is unaffected by specific monetary systems, and they often maintain or even increase their value during economic instability. Real Assets Real assets such as real estate, farmland, and forests can usually preserve value, and even appreciate during periods of hyperinflation. These types of assets not only have practical uses but can also generate rent or agricultural income. ...

Primary Challenges Faced Currently The economy has reached the peak of debt, and debt pressure is causing a reduction in personal income. Individuals are cutting back on spending, directly leading to a decline in consumption. Declining consumption leads to a decrease in corporate revenue. Decreased corporate revenue leads to lower employee income and tax revenue. Decreased investment willingness among individuals and corporations leads to a slump in the real estate market. Land sales are sluggish, local finances are nearing bankruptcy, and in some regions, official salaries cannot be fully paid. Historical Lessons This situation is bound to lead to extreme change, which is unacceptable, so countermeasures must be taken. What is the goal of these countermeasures? Naturally, it is to maintain social stability, and on this point, everyone’s interests are unified. ...

The Shanghai Composite Index surged 8.06% today, breaking the 3300-point mark. Total trading volume across the two markets reached a massive 2.6 trillion yuan, setting a new historical high, with all brokerage stocks hitting the upper limit. Faced with such a fierce surge, many people cannot help but wonder: how long can this frenzy continue? Should we take profits now? Personally, I believe that this market rally is unlikely to be a flash in the pan; rather, it is a mid-term process that could last for two or three months. ...

On September 24, 2024, the central bank held a press conference and announced a new round of economic stimulus plan, planning to inject approximately 300 billion yuan into the stock market, and stated that it will continue to add funds in the future. Overall, this strategy appears quite well-structured; by pushing up the stock market, the intention is to guide residents directly into investing in the financial market. This measure may attract a large amount of capital into the market in the short term, bringing short-term prosperity. However, the sustainability of this effect remains questionable. ...

In life, there are always some seemingly ordinary things that contain profound philosophical meanings. Take bees and sweetness as an example; we may rarely think about the story behind it. Bees are hardworking creatures in nature, diligently collecting nectar to transform it into sweet delicacies. These sweets then become delightful treats for people, allowing them to savor happiness. However, if we delve deeper, we might discover that there seems to be something hidden between the bees’ hard work and the sweetness enjoyed by humans. Perhaps there is a subtle yet profound implication behind this. We can recall scenes that seem familiar. ...

Well, the main ways individuals obtain true profit (rather than labor compensation) include: Entrepreneurial Startup - Establishing a company independently or with partners, bringing goods or services to the market, and obtaining a share of the corporate profit. Investment Startup - Sharing the growth returns of a startup through angel investing or venture capital. Securities Investment - Purchasing securities assets in the stock market and sharing the operating profit of listed companies. Ownership of Means of Production - Purchasing means of production such as equipment or real estate, and profiting from renting them out. Utilization of Intellectual Property - Collecting usage fees by obtaining patents or copyrights. Operating Commercial Activities - Obtaining intermediary profit through wholesale, retail, etc. Providing Commercial Services - Such as financial intermediaries or real estate agents. Building Investment Platforms - Such as obtaining the spread from P2P lending platforms. ...

In a competitive market, when the wage level of a certain profession or industry is higher than the value deserved by the labor output or skills required for that job, it attracts more people to study that profession and enter that market. As supply increases, the number of workers in the market grows, which subsequently causes the wage level to decrease, eventually approaching the value deserved by the labor output. ...

When discussing economics, Producer Surplus is an important concept. It refers to the difference between the actual income received by a producer or supplier when selling goods in the market at a certain price, and the minimum income they expected when willing to sell those goods at that price. Simply put, Producer Surplus is the net gain for the producer in a transaction. Its calculation involves two key factors: Producer’s Supply Price: This refers to the price at which the producer is willing to sell the goods or services. Typically, the producer’s supply price is related to their marginal cost (the extra cost of producing one unit of goods), because they hope to at least cover the production cost. ...

Analyzing from the perspective of game theory, the contributions of employees to companies follow a parabolic curve, while wage levels continue to rise. This is why internet companies have a retirement age of 35. +++

The unlucky ones who were eliminated by competition have no voice; you cannot see their journey of heart and their thoughts. +++

I absolutely cannot let people think I am stingy. So, I often invite friends to restaurants; I also need a luxury car to showcase my status; furthermore, I must pay some other expenses—taxes. Finally, I have to turn to this great invention: the credit card. With a credit card, I don’t have to pay myself; the people at the credit card company will pay for me, at least temporarily… After that, I hear someone say, “He is a winner in life; he is living a first-class life.” I was living a first-class life: not drinking sparkling wine—only champagne; not eating steak—only prime tenderloin. I wanted to live like a rich person in a futuristic world. And soon, the past began to constantly bother me in the form of bills, collection letters, and high loan interest rates. As a high-performing, high-income salesperson, I was always able to get a new credit card. So, I started making alternating payments, meaning I would get a new credit card and then use the new card to pay off the bill of the old credit card. Just like that, I spiraled into a downward financial state.

The harder you work, the greater the chance your boss has of upgrading to luxury cars and mansions. Your income today is the result of the decisions you made yesterday. If you don’t understand this, you can’t say, “Now I want to make a different choice.”

First, we must clarify an important principle: You must never “kill your goose.” You also cannot fragment it. You must absolutely never touch your principal. All your dreams can be fulfilled using the golden eggs. This also means that your golden eggs must be large enough to support your dreams. For example, let’s say you want to buy a house. If you have already achieved financial freedom, you can undoubtedly use your assets for the payment. However, doing so will cause your assets to diminish, which is naturally what you do not want. Therefore, you should opt for installment payments when acquiring all major items, because your monthly interest will be completely sufficient to cover the cost.

Achieving financial security requires that the most important standard—the accessibility of money—is met. You must have daily access to funds. Therefore, it is best to keep your money in a safe or invest it in a cash fund. You should not take any risks until you achieve financial security. Consequently, you should choose low-risk investment projects. However, even so, you must pay attention to managing potential risks. Never put all your money into a single investment project, even if “all your funds” only total 1,000 Euros. Remember, managing risk means increasing the opportunity for profit. Before achieving financial security, keep financial safety at the center of your focus. You should tolerate a low profit rate and keep some cash in a bank savings account. If you still want to invest, I recommend a deposit plan. ...

Big goals are easier to achieve than small ones because problems cannot completely block your view of the big picture. Successful people always know how to put themselves in a “necessary” situation; without achieving their goals, they will never be happy. When you set limits for yourself, you will try to reach those limits. You should not only take responsibility for your failures but also for your successes. If you believe that success is unrepeatable, you lose the opportunity to improve your self-worth. A person who gives 110% effort and actively eliminates all excuses is bound to succeed. You need a good coach, someone who can maximize your potential using their own experience. The first person to focus on their weaknesses will not gain wealth. Whether it’s passive defense or active offense in a competition makes a world of difference. Many people have lost the joy of life and the opportunity to become wealthy by trying too hard to eliminate their weaknesses. The price you must pay to acquire wealth is time. But this is not comparable to the time you earn through wealth. Wealth allows you to think calmly about the meaning of life without financial concerns. +++

•“ In the future, I will also be satisfied with everything I have now.” •“ If I can give it my all, I will become the best.” Behind these two sentences, there is usually hidden self-deception, fear, and a lack of self-worth.

Define what you want, and compile a dream album related to it: • Create an album and paste pictures of things that will become part of your future life. • Think about what you want to do, what you want to own, and what kind of person you want to be. • Please select pictures that can inspire you. • Flip through your dream album as frequently as possible. • Afterward, close your eyes for a while and imagine what you can see, hear, feel, smell, and taste if everything comes true.

Components of good luck: • Accumulate capital; • Identify opportunities; • Make decisive decisions and take action.