Many times we have to give up our personality to "follow the crowd" because it is impossible for each of us to understand everything clearly. For those things that are not well understood and uncertain, we tend to "follow the crowd". The number of people holding a certain opinion is the most important factor affecting conformity. Few people can speak with one voice and insist on their different opinions at the same time. Stress is another decisive factor. In a group, whoever behaves differently will often be suspected of "betrayal" and will be isolated or even punished, so the behaviors of members in the group are often highly consistent.
"Herd effect" tells us that many times, it is not what the proverb says-"the eyes of the masses are discerning". Ordinary people in the market tend to lose their basic judgment. People like to join in the fun and follow the trend. The eyes of the masses also turned to the information media, hoping to get a basis for judgment. However, media people are ordinary people, not your eyes. If you don't distinguish spam, you will lose your way. Therefore, collecting information and making keen judgments is the best way for people to reduce blind obedience and use their own rationality more.
Rational use and guidance of herd behavior can build regional brands and form scale effect, so as to obtain better results with more advantages than disadvantages. Finding a good leader is the key to using the herd effect.
It is inevitable for an individual to be eaten or eliminated after others' ass. The most important thing is to have your own creativity, and not taking the usual path is the shortcut for you to stand out. Whether you join an organization or start your own business, it is very important to maintain the sense of innovation and the ability to think independently. In daily consumption, the herding effect is also particularly obvious. Many people, especially women, like to go shopping with same-sex friends, because their eyes are closer and shopping is more fun. However, when choosing a shopping object, you'd better pick some friends who have the same spending power as yourself. On the contrary, shopping with partners whose spending power is higher or lower than their own will be affected by the "herd effect" and they will involuntarily make irrational behaviors that are not in line with their consumption habits.
In the process of consumption, the exemplary role of partners will also stimulate your consumption. Although the income of young people is similar, the actual situation of individuals is not the same. For example, as single people, they can live a "moonlight family" life without any worries, while those who get married have to deal with the mortgage and daily necessities in their lives. Therefore, although the nominal income is equal, the disposable income of two people is different, which determines their different spending power. For ordinary people, love of comparison, love of face and convergence are inevitable "ailments" in social interaction, and it is difficult to overcome such problems simply from the personal psychological level. Therefore, the easiest way to avoid irrational consumption is to insulate yourself from the "herd effect", try to choose partners and friends who have the same spending power as yourself, and avoid shopping with people who have higher or lower spending power.
A typical case is the "herd effect" of license plate demand. Under the background of restricting automobile consumption in major cities, many consumers can't help but see their friends around them, which leads to many people participating in the lottery and not preparing to buy a car. This is a typical "herd effect". In the "prosperous" industry with fierce competition, it is easy to have a "herd effect". When a company sees what business it is doing to make money, all enterprises flock to this business until the supply of this industry is greatly increased, the production capacity is saturated and the relationship between supply and demand is unbalanced. Everyone is keen to imitate the leader's every move, and sometimes it is inevitable to lack a long-term strategic vision.
For those of us in the workplace, there may often be a "herd effect". Doing it is to make money, and everyone wants to do it; Do management consulting to make money, and everyone swarms; Working in a foreign company, becoming a small white-collar worker who often pops out English words in his mouth looks beautiful, so everyone goes to learn English; Being a civil servant is very stable and the income is good. College graduates all take the civil service exam ... We should use our brains to think and measure ourselves.
We should look for jobs that really belong to us, not so-called "hot" jobs. As the saying goes, "men are afraid of entering the wrong line, and women are afraid of marrying the wrong person." "Hot" jobs don't necessarily belong to us. If personality and work don't match, hard work will lead to faster failure. We should also pay attention to the hidden crisis in the industries and companies we choose. No industry or enterprise can be a "safe haven" and risks will always exist, so we must be bold and wise. With this sense of crisis, it is natural to prepare countermeasures. What should we do when the crisis really comes? In "Who Moved My Cheese", the mouse sitting in the empty seat finally had no cheese to eat, but the mouse with crisis consciousness and looking for new cheese everywhere found a new life before the old cheese was eaten up. In the capital market, "herd effect" means that in an investment group, a single investor always acts according to the actions of other similar investors, buying when others buy and selling when others sell. There are other factors that lead to the "herd effect". For example, some investors may think that others in the same group have more information advantages. Herd effect may also be triggered by institutional mechanisms. For example, when asset prices suddenly drop, causing losses, some investors have to cut their positions and sell assets in order to meet the requirements of additional margin or comply with the restrictions of trading rules. When the enthusiasm for investing in stocks increases greatly, the energy of individual investors accumulates rapidly, which is easy to form a convergent herd effect. When chasing up, confidence exploded. When diving in the market, panic psychology also began to produce a chain reaction, and people fled in panic, so it is normal to enlarge the amount of diving. Only then is it easy to kill the stock at the floor price. This is the fundamental reason why the bull market rises slowly and falls quickly, and the fall is often in place at one time. But we need to remember that under normal circumstances, this is not the time to go out.
Unity of opposites between behavior and reason
Herd behavior in the stock market refers to the phenomenon that investors learn and imitate in the trading process, which leads them to buy and sell the same stock in a certain period of time. Keynes pointed out long ago: "Investing in stocks is like taking part in a beauty contest. Whoever chooses the result closest to the average hobby of all the judges will win the prize; " Therefore, each participant does not choose the one that he thinks is the most beautiful, but uses intelligence to guess the one that most people think is the most beautiful. "It can be seen that herding behavior is based on the consideration of ownership, safety and information cost. Small investors will adopt the policy of following the masses and leaders and directly imitate the trading decisions of the masses and leaders. As far as individuals are concerned, economists have not reached a unified conclusion as to whether this kind of behavior is rational or irrational. More extreme rationalists, such as Gary S. Becker, a professor at the University of Chicago in the United States, think: "All human economic behaviors are rational, and economists can't explain these behaviors because they can't help but explain their unexplained phenomena with irrational behaviors, carelessness, stupid behaviors and special changes in value to cover up their lack of knowledge, and these assumptions just expose the failures they cover up. "Becker's view is extreme, but as long as it is not arbitrarily analyzed, it can make us believe that the' herding behavior' of individual participants in the stock market is rational. For example, the controllable experiment of social psychology proves that when the observed reality is vague, the public becomes the information source, or the public's behavior provides a message on how to act. In the stock market, due to the asymmetry of information, individuals can't make reasonable decisions from the limited stock price information. Conformity is their rational behavior, although this rationality contains the meaning of necessity. Therefore, I believe that herding behavior in the stock market often begins with individual rationality. Through its amplification effect and contagion effect, followers gradually show irrational tendency, and then achieve overall irrationality. When the stock market is over-hyped, "irrational prosperity" appears. Just like a fertile grassland, there are only a few sheep. It should be said that they will be very substantial. But one day, it attracts a large flock of sheep. At this time, the grassland will be eaten into a desert. At the same time, the sheep are getting hungry. Some of them fell down, and some moved. But if you are a smart sheep, you should stay here instead of following the army, so that when the grass grows, it will become a fat sheep. Of course, the rest of the grass must be able to support it until it grows. So sometimes when everyone thinks something is like, in fact, the opposite may be true.
Stock trading should overcome the herd effect.
Reverse behavior is the core of most successful investment strategies. However, human nature is always eager to follow the crowd and be positively strengthened, which is the sense of security brought by many people. Herd effect, also known as herd effect, shows that investors infer their private information by observing the behavior of most people, or rely too much on public opinion to imitate other people's decisions because of information asymmetry and other reasons. The most important factor affecting conformity is not the opinion itself, but the number of people who agree with it. In this way, individual rational behavior leads to collective irrational performance. In the fund investment market, although institutional investors have more information advantages than individual investors, institutional investors also show the herding effect of investment. From the perspective of game theory, between individual investors and institutional investors, institutional investors collect and analyze information, and individual investors follow, that is, "collection and analysis follow" is an equilibrium solution; Among institutional investors, following the trend is also an equilibrium solution of the game.
Contrary to the public, there is often the danger of being trampled. However, investment is like a war, and victory always favors those who are unconventional and can stay out when public opinion falls to one side. This means that winners can always see different information and take different actions accordingly.
If you sell stocks in despair, you must sell them at a low price. -investment guru Peter Lynch
When the market is in a downturn, it is actually an excellent opportunity to make an investment layout and wait for a high harvest in the future. However, because most investors have the psychology of "herd effect", even the investment products with the best growth prospects are not interested when everyone is not optimistic; The heat of the market has increased, and investment talents are scrambling to enter the market. Once the market is slightly adjusted, everyone will flock out again, which seems to be an investment psychology that most investors cannot overcome.
How to avoid following suit as much as possible? Our suggestion is that investors should set profit points and stop points in combination with their own investment objectives, risk tolerance and other factors, and at the same time control their emotions to face all kinds of ups and downs, and strengthen their ability to "be patient with haste" so as to successfully realize their investment objectives. Although fund investment should not go in and out for a short time like stocks, it is necessary to properly convert or adjust the portfolio, because some venture funds are inevitable, such as market cyclical risks, and even star funds have to bear the risks of ups and downs with the market boom and industrial cycle. Setting a profit point can remind you that your investment goal has been achieved, and avoid falling into the weakness of human greed, and eventually miss the redemption opportunity and shrink the profit. Setting a stop-loss point can lock in your investment risk and avoid possible greater losses. When the fund's rate of return reaches the profit and loss condition, you should judge whether it is profit-taking or redemption. There are many references for setting profit point and stop loss point. Generally speaking, investors can consider their risk tolerance, profit expectation, age, family economic situation and market characteristics, regularly check the return on investment, and find out the profit and stop loss range that is most suitable for their portfolio. Special emphasis is placed on regular inspection every quarter. Fund investment is suitable for lazy people, but it is still necessary to check the fund performance, ranking changes and the increase and decrease of investment targets every quarter to provide decision-making basis for final redemption or conversion, so as not to miss the best selling point or go out prematurely. It should be pointed out that when the fund's income reaches its own profit point or stop loss point, it is not necessary to take profits or sell it immediately. At this time, it is necessary to evaluate whether the long-term market trend is still optimistic, whether the fund operation direction is correct, whether the set profit point or stop loss point is in line with the market situation at that time, and then decide how to adjust the investment portfolio. If you hit the stop loss point because of the short-term adjustment of the market, you should not redeem it rashly at this time, lest the market rebound immediately and you sell at a low point because of lack of patience. If the performance of the fund is outstanding in the same type of fund and the long-term market is also optimistic, it is only because the short-term fluctuation reaches the stop loss point. At this time, if you can tolerate the risk of continuing to hold, maybe you should reset the early warning conditions, or even take the opportunity to overweight, so as to achieve the goal of leveling the bargain. On the other hand, when the market turns from bull to bear, or when the market price-earnings ratio is too high and the market risk increases, we should find the best redemption opportunity as soon as possible regardless of whether the profit point is reached or not. Herd effect is an abnormal phenomenon in the securities market, which has great influence on the stability and efficiency of the securities market. In foreign research, information asymmetry and competition between managers for reputation and reward are the main reasons for herding behavior. This paper makes a theoretical and game analysis of herding behavior between individual investors and institutional investors, and reveals the causes and effects of this abnormal phenomenon from another angle.
Herd behavior in financial market is a special irrational behavior, which refers to the behavior that investors are influenced by other investors, imitate others' decisions, or rely too much on public opinion without considering their own information under uncertain information environment. Herd behavior is a related behavior involving multiple investors, which has great influence on the stability and efficiency of the market and is closely related to the financial crisis. Therefore, herding behavior has aroused widespread concern in academic circles, investment circles and financial supervision departments. Banerjee (1992) thinks that herding behavior is a kind of behavior that people do what others are doing, even if their private information indicates that they should not take such behavior, that is, individuals take the same actions as others regardless of private information. Shiller (1995) defines herding behavior as a way of thinking and behavior, in which people interacting in social groups tend to be similar. For example, in group decision-making, when most people have similar opinions, individuals tend to support the decision (even if the decision is incorrect) and ignore the opinions of opponents.
We believe that the herding behavior of individual investors in China stock market has the following characteristics:
A. Individual investors in China stock market show very significant herding behavior, and the herding behavior of sellers is stronger than that of buyers. Time factor has no significant influence on investors' herding behavior, and investors' herding behavior stems from its internal psychological factors.
B. In different market situations, investors show significant herding effect, that is, whether investors are risk-averse or risk-averse, they all show significant herding effect.
C. Stock return rate is an important factor affecting investors' herding behavior. When the stock rises on the trading day, investors show stronger herding behavior. On the trading day, the herding behavior of investors and buyers is greater when the stock falls than when it rises, while the herding behavior of sellers is the opposite. Generally speaking, the seller's herd behavior is greater than that of the buyer.
D. Stock size is another important factor affecting investors' herding behavior. With the decrease of circulating share capital, the herding behavior of investors gradually increases, which is consistent with the conclusion of foreign scholars.
General characteristics
Living in China, and then participating in stock trading, your life will become colorful.
As a China person, when the stock price is at a low level, it is always hindered by various low-level moving averages and the stock price effectively falls or rises slightly.
As the largest Unicom in China, this trend is due to the low EMA. Perhaps most of China's stocks will experience this kind of oscillation in the low zone, and all participants will experience purgatory-like tempering.
Only those who can bear this temper will eventually become real winners.
But obviously this is one of the concrete manifestations of herding behavior.
In fact, Unicom's biggest decline in 3 1 is 2.5%(2.42 yuan to 2.36 yuan), which is related to the 2. 1% decline in red chips of Hongkong Unicom (7 yuan). Herd effect seems to be reflected not only in China, but also in related markets. However, this trend shows that Unicom's own trend lacks independent personality, which is only related to Unicom's red chip trend because of its large size. However, compared with H shares, the premium of other A shares is much higher, such as Guangzhou Shipyard International.
Previous ST stocks have also experienced this kind of low EMA suppression, but they all showed extraordinary courage when the market broke, and their daily limit phenomenon was in sharp contrast with the market crash.
But we can still see that this bravery is caused by their compensation, not a stroke of genius.
Because Shenzhen B's four fairy stocks with more rational investment groups are not so brave, but they are more rational.
On 3 1 day, most of the st stocks on the main board were at the daily limit, but the four fairy stocks of SZSE B were not at the daily limit, but there was a trend of rising and falling.
Of course, the previous market fell by more than 50 points on the 22nd when it was also the daily limit of the st group, but then most of the ST made up for the decline of 1-2 in the second transaction.
Therefore, due to the relatively large increase in the ST stage, there may also be the possibility of making up for the decline.
This herding effect is also very obvious on 3 1 trading day, that is, the market went from 13: 35 to 14: 35 in just one hour, and the market fell from 1659.5 to 1629.07, and the market fell by 30 in just one hour.
Therefore, no matter whether the stock you hold is good or bad, you should be careful of the unnecessary losses that this herd effect may cause you.