Extended data:
Estimate the reasonable price of stocks under normal circumstances.
First, different stock markets give different P/E ratios. For example, steel 10- 15 times that of banks, 20-30 times; Car 30-35 times; High technology 35-50 times; You can't analyze this yourself.
2. P/E ratio multiplied by current year's profit = correct valuation (A 1). Of course, if you know the company better, you can estimate the company's profit per share next year and in the future, and you can judge the price of this stock next year and in the future.
Third, net assets per share is also an important indicator. Enterprises with high net assets have stronger resilience when the stock market is abnormal.
Fourth, the common reserve fund per share and undistributed profit are also very important indicators. If it is high, it can pay dividends, and the stock market is more resilient when it is abnormal. Low dividends are rare, and stock delivery may be rare. Provident fund+undistributed profit+net assets =A2
The valuation A 1 calculated in the second part of verb (abbreviation of verb) is much larger than A2, and this stock has no or poor resilience. In a weak market, you will lose a lot. A 1 The closer to A2, the better.
Finally, stock selection: according to the above principles, judge the difference B between the future valuation and the current stock price, calculate the highest price B 1, and also calculate the lowest price B2. If (B 1-B)/(B-B2) is greater than 2, you can buy it. Only in this way can your chances of making money be greater than 66%. If the chance of making money is less than 66%, don't buy it resolutely, and if it exceeds 80%, buy it boldly.
Looking at the company's financial statements, we should first look at liabilities and profits, and more importantly, cash flow, which is an important indicator to judge whether an enterprise can operate better in the future.
References:
Oriental Fortune Network-How is the stock price reasonable?