What is the significance of rational treatment of investment consulting in stock common sense?

Since you want to trade stocks, you must first know why stocks are valuable. The essence of stock is the equity of listed companies, that is, the ownership of listed companies. Holding a stock is equivalent to owning a part of a listed company, so the value of a stock essentially comes from its future profitability. In the long run, buying stocks is a trust in the future profitability of listed companies. Therefore, through the expectation of the company's profitability, we can get the intrinsic value of the corresponding stock. For this piece, the subject can try to understand the form of modern "company" and how the company generates returns for shareholders. Distinguish between stock price changes and stock value changes. All companies have equity, and the holders of equity are shareholders. Only the shares of listed companies will circulate in the securities market for ordinary investors to trade. In the securities market, the stock price is determined by the transaction, but the transaction is affected by the intrinsic value of the stock (that is, the company's future profitability). In market transactions, the stock price may deviate from its value.

There are two kinds of stock pricing: relative valuation and absolute valuation. Relative valuation is more commonly used because of its simplicity and convenience. PE, PB and the like often belong to the category of relative valuation. The main idea is to evaluate the price of this stock according to the prices of other stocks or assets in the market. By forecasting the future profit (cash flow) of the company and considering the time value of funds, the absolute valuation is converted into the value of the company today. There is no absolute advantage or disadvantage between the two. If you want to study valuation in depth, you need more basic knowledge: you can consider learning to read financial statements, understand finance, corporate finance and so on. There is a lot of information in this area, so I won't go into details. The trading rules of the secondary market (commonly known as the exchange) include how to open an account, the collection of taxes and fees, the product categories of the securities market, and the specific operations of market transactions. This part should be said to be the operational knowledge when learning stocks, and the normative things are more complicated.