Looking at what has been hyped in China over the past 30 years, it’s worth taking our time to examine it and discuss it carefully

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This post was last edited by 492059297 on 2011-9-8 at 22:17. Clivia should be given top priority: I checked the news and found that this guy wrote in a clear and concise manner, so I’ve decided to repost it here (taken from Fei Du Xia Ke). During the boom in demand for clivia, many people made huge profits; for example, plants that initially cost only a few hundred yuan ended up selling for tens of thousands of yuan. And that was in the 80s; that figure is quite substantial. Some people got into the business first, bought Clivia plants at low prices, and after holding them for a few days they saw their prices rise exponentially; they then sold them happily and made a lot of money. If these people stop doing this, then of course they will have made a profit. But people are greedy; many enter the market again, spending more money to buy assets in the hope of selling them at a higher price. Many end up not selling their assets when the bubble bursts, and thus suffer further losses. During this period, some people stepped back bravely, recognized the risks, and ultimately made money. Most people end up taking on the burden and suffer losses in the end. Throughout the whole process, the sum of those who make money and those who lose money is zero. Why is it said to be zero? Because no new commodity value is created in this process, for society as a whole it’s as if wealth is moved from one pocket of a jacket to another. For you personally, the amount of money remains the same. As for the lower pocket, there’s too much money in it. Tibetan Mastiff: When it comes to the Tibetan Mastiff, it’s definitely no ordinary dog at all – it’s an absolutely outstanding dog. How amazing this dog is: invincible in the world. A netizen from afar praised him in this way: “The Law of the Invincible Tibetan Mastiff: (1) Authentic, natural Tibetan Mastiffs are invincible.” ； (2) The defeated Tibetan mastiffs were all domestically raised ； (3) All artificially raised Tibetan mastiffs are not in their natural habitat! ”I really admire the wisdom of friends on Tianya! If it’s that amazing, how did he come up with it? When talking about the milestones in Tibetan Mastiff training, one outstanding individual must be mentioned – who is it? Ma Junren. With Lao Ma getting involved, the Tibetan mastiff was quickly introduced to people across the country at lightning speed; currently, its price is such that dogs are more valuable than humans, while humans are regarded as being of higher status than dogs. Now they basically cost several hundred thousand each. Don’t you see thirty Mercedes following a Tibetan mastiff? This is typical hype! Dogs have two purposes: (1) to guard the home ； (2) Pets. Everything other than this is nonsense. I, a poor person, don’t know how the rich play their games. Can a Tibetan mastiff keep watch over the house, or does it still need someone to watch over it? After all, it costs hundreds of thousands of dollars – surely that won’t attract a bunch of thieves. How can you play with something that’s so fierce? But it’s really hard to see what sense it makes to use hundreds of thousands of dollars for these two tasks. So. . . It is foreseeable that the price of Tibetan mastiffs will inevitably return to normal. Eighteen thousand is absolutely incredible. Pu-erh tea: When I went to Xishuangbanna in 2002, I bought some tea cakes. I remember they cost 10 yuan, 20 yuan, and even 50 yuan each. If a small piece of this is broken off and placed in a teacup, it gives a tea-like flavor even for someone like me who doesn’t drink tea much. It’s a great product with excellent value for money. It’s just that I don’t have the habit of drinking tea; most of it stays at home. Later, in 2007, a friend who really cares about me brought some of it to me, saying that this substance is known as \"tea gold\" and has the effects of lowering cholesterol and blood pressure. . . It has various benefits, and its value increases over time. Now there are different grades, with the most expensive ones costing over ten thousand. . . When my friends left, I gave each of them a tea cake that I had brought back from there, saying they could take it home and use it to help lower their cholesterol over time. . . That year, many friends brought me Pu-erh tea, and later my father started to like it as well. Friends who didn’t go to Xishuangbanna last year brought this thing for him, and he’s not quite used to it yet. Later I looked it up online, and found that since 2009 no one has been speculating on this thing anymore, so its value isn’t high anymore. I remember what the tea growers said to us when selling us their tea back in 2002. . The remaining tea leaves can be pressed into cakes and stored for decades to be consumed slowly. . ” 　　Pu-erh tea remains the same, but the people are no longer the same: (Reposted below) Pu-erh tea is extremely popular and in high demand; its price has risen by several times, or even dozens of times, to levels that are truly astonishing. Fangcun in Guangdong is the largest tea trading market in the country. In the past, this area was dominated by Tieguanyin tea for a long time; now, Tieguanyin and Pu-erh tea share a 70-30 ratio in terms of popularity. Over 99% of the tea merchants in Fangcun are involved in the Pu-erh tea business. Here, the price of the established \"Dayi 7542\" batch rose from over 4,000 yuan per piece last year to over 8,000 yuan; it soon increased to 12,000 yuan, 18,000 yuan, and 22,000 yuan, with prices even seeing three increases within a single day. Yet, heaven and hell are always just a step apart; in just a few days, once-great glory was overshadowed by despair. Also from Fangcun, Guangdong, with the same \"Dayi 7542\" brand, its price has now dropped to over 8,000 yuan per piece; in Shanghai, even a price of 6,000 yuan per piece fails to attract any interest. “The price of “06 Xiaguan Class A Tuocha” has also dropped from a peak of 400 yuan per kilogram to the current level of 195 yuan per kilogram. 　　 　　 　　When I was in college, I learned that there was something you could buy and still profit from: the guy who shared my bed was really smart; for example, he took me to Fudan University, Shanghai University of Finance and Economics, and Tongji University to buy New Year’s cards, and in return he would give me cigarettes for a week. He himself had dealt in train tickets and was caught by the police once. Around 1994 and 1995, he went to the stamp flea market at Wujiaochang every day, coming and going in a secretive manner. In a few days, a newspaper will come out stating how much each stamp is worth, and how much money can be obtained for a certain amount of stamps. I spend every day thinking about how many soft-pack Peony cigarettes I can get in exchange for those stamps, and how many hard-box Peony cigarettes I can get in exchange for them. At his urging, the guys in the dormitory all went to buy the stamps he said would only go up in value and never drop. I still remember his theory from today: \"Stamps become more valuable over time. For example, stamps that were worth one cent at the time of the country’s founding can now be worth over 10,000 yuan; those with printing errors are worth hundreds of thousands of yuan. If we buy them now and sell them in 10 years, we will at least…\" . . ” 　　　　The guys in my dormitory aren’t much richer than me; I can tell that whenever they buy stamps, they come to me for cigarettes. I was so annoyed that I wanted to hide my eating bowl; one reason was to eat less so that I could get more soft peonies in return ； Secondly, it reduces wear and tear on the bowl; it can be treated as a cultural relic and buried under the bed, and such items become more valuable over time. 　　　　Speaking of stamps again, later on their prices dropped sharply, and I benefited from that. The stamps that Tao obtained secretly were given to me for free as a way of thanking me for providing them with cigarettes to smoke. 　　My buddy despises me greatly because I only think about the Mudan cigarettes available at the school canteen. It was only when he gave me the stamps for free that I spat in his face: “Stamps are just stamps; what the hell are you talking about regarding their value increasing, or about them helping to cultivate one’s tastes or teach one something about culture and history?” No matter how expensive the stamp is, when it’s applied to an envelope its value remains just its own. ”I’m a harsh talker; I belong to the type of people who speak without any decency. You say my Pekingese doesn’t understand the beauty of sansevierias; I say you’re trying to appear cultured – treating 8-cent stamps as artifacts is foolish and irrational. 　　 　　Fifth, I’ll put in the stocks. Chinese stocks have had no investment potential from the day they were introduced. Why? Stocks are considered from the perspective of dividends, and the total amount of dividends paid by Chinese listed companies each year does not exceed 50 billion yuan; in other words, the amount of dividends paid is less than the total amount of transaction fees. You don’t see PetroChina distributing real cash dividends to people abroad in those foreign markets, while domestic listed companies only offer symbolic payments to their shareholders as a formality. Therefore, stock trading in the domestic market is all about speculation, hype, and gambling. When I was in college, there was a guy who was really interesting too; he invited us to a small shop near the school for a drink, claiming that he had made money in the stock market. Later, for a while, I noticed that he switched to eating rice with pickled vegetables. When asked why, he said he had lost money in the stock market and needed to repay money he had borrowed from others. I remembered this guy, and at the same time I understood that stocks can both generate profits and losses. In July 2006, I was at a point in my life where I was considering various options; I started thinking about ways to make some money. By chance, I noticed that stocks were on an upward trend, so with the intention of learning, I invested half of my money in the stock market. I never expected to encounter a major bull market in history. . I began to conduct research on the fundamentals, price-earnings ratios, and so on of thousands of stocks in these two markets, and to buy and sell them. It turned out that no strategy was needed at all; buying any stock would result in profits. At 3,000 points, it doubled in value. I could already hear people at the dinner table talking about making money in stocks, so I withdrew my capital. Later, my grandmother told me, “Please help me buy some stocks; the aunts in the neighborhood are all making money.” I remember it was over 4,900 at that time. I said, Mom, if even you want to make money from stocks, then there’s really no money to be made in this area at all. I immediately sold all my stocks. At that time, all my friends around me started buying stocks and all of them made money. From 5,000 points to 6,124 points, the market rose continuously without pause, reaching its peak. My sister insisted on buying shares in PetroChina; she told me that everyone in her office had bought stocks. She teaches in a county-level city, and when I suggested she buy stocks in 2007, she opted for insurance instead. . . In 2008, people in her office persuaded her to ask me to help her trade stocks; I’ve been out of that business for a long time now. . I told my sister that Tibet was peacefully liberated already; it’s been 50 years now, and you still want to join the Kuomintang? Aren’t you just seeking trouble? I couldn’t resist my sister’s call, so I bought her a second-hand CNPC one. When buying it, it was made clear that the aim was to let my sister understand how the stock market falls. 　　There are a few classic sayings in the stock market: (1) “When even vegetable sellers are talking about the stock market, it’s definitely a time to sell.” ”This sentence contains many philosophical principles. The stock market (in fact, a stock market with no dividends) does not generate profits on its own; it is a zero-sum game. A zero-sum game necessarily means that some people profit while others lose; otherwise, it cannot be zero-sum. When everyone wants to make money, where are those who lose money? All the exaggerated profits come from later entrants rewarding those who came first. When vegetable sellers and car repairmen realize that this can be profitable, it means the last group of people is entering the market. From then on, no more participants entered; no one compensated for the previous profit expectations, or in other words, it had reached the final stage. 　　In the stock market, those who say they will buy stocks are not the experts; it’s those who know how to sell that are the true experts. At 6,124 points, those who bought stocks experienced the apparent happiness of making money ； But now there are a few willing to sell. Only by selling at this point can one truly make a profit. 　　It’s often discussed in the stock market. There aren’t many speculative activities I’ve been involved in, so I’ll choose one that I’m familiar with and talk to you about the mindset behind it, which might provide a deeper insight. After all, we are familiar with this. In the stock market as well, I was looked down upon by my family. My wife often teased and mocked me, saying that I would never achieve anything in life because my courage was even less than that of an ant. The reason she gave for this was that I managed to get back my initial investment when the stock price was at 3,000 points, and I sold all my stocks when it was below 5,000 points. To be honest, I started to feel scared when it reached 3,000 points; I decided to secure my gains by returning the principal to my wife ； At 5,000 points, I was still quite greedy, but my mom wanted me to invest in stocks, which helped me make up my mind. Plus, there was a great investment opportunity available at that time, so I decided to pull back. 　　　　Speaking of ants, let me tell you about some things that aren’t exactly hype, but could be considered scams. For example, large-scale afforestation projects, investment-oriented hotels, financial management services for clients, the guinea pigs mentioned by some friends earlier, and land in the United States. The sixth type is black ants, guinea pigs, franchise businesses (with a probability of 99%), hotel-style apartments, large-scale afforestation projects, and land in the United States. Why group so many together? They share one common feature: the strategy of these sellers is to set extremely low entry barriers. All you need to do is invest a certain amount of money, and they will take care of the rest. They earnestly guarantee to deliver you at least 30% profit per year, or even hundreds of percent in some cases. They are like angels, born to help people make money. Making money is not an easy task at all; one should be cautious of any business that promises returns of more than four times the interest rate on bank deposits in China, without any real effort required. Money can generate more money; in academic terms, this is called return on capital. Any capital that requires a return is inherently risky, with benefits and risks existing together. Has anyone told you about such a great investment opportunity right now: absolutely risk-free with high returns? Would you be interested? Anyone would be tempted. But most people don’t take action; they think that with such a huge ‘pie’ falling from the sky, why not use your own bowl to catch it, and yet they still insist on having me share in the benefits. But after all, some people had greed overcome fear. That’s how things like property-based hotels and franchise opportunities with extremely low entry requirements came about (franchise opportunities with a 1% entry fee, which are very high, are excluded from this); it’s also why there has been large-scale afforestation efforts and an overabundance of black ants. 　　　　Reposted below: Aunt He, who lives in Xiaolongkan, Shapingba District, was scammed out of over 20,000 yuan. During the break, the elderly woman told the reporter that in May 2003, while walking in Three Gorges Square, she received a flyer stating that Yiju Biology’s Chongqing branch was holding an event at Qingtai Building on the weekends, inviting middle-aged and elderly people to attend; nice gifts would be given away, and it was mentioned that the company was involved in black ant breeding technology. The old man said that almost everyone present that day were middle-aged and elderly people. Company staff claimed that “Black Ant” is a high-quality health product that is very popular both at home and abroad. The way to participate is simple: a minimum order of one set (10 nests) is required, at a cost of 450 yuan, with no upper limit. “It is fed uniformly by the company’s technical staff; you bear no risk at all – you just need to wait for the year-end dividends. ”The company shall be fully responsible for any losses incurred during breeding. Aunt He said that it was this huge temptation that deceived her. 　　 All the hustle and bustle in the world is driven by the pursuit of profit. Everyone is after money, so places where there’s profit are crowded with people. Making money from money is something you can’t take too lightly. If not handled properly, investment turns into speculation, and speculation turns into theft; the earlier parties get the chickens, the intermediaries get the eggs, while you end up getting beaten by the owner. 　　 Hype: Have you heard of the claim that one jin of wood can be exchanged for one jin of gold? I wonder, dear readers, if aside from the Divine Dragon Wood of Mu Guiying’s family, such things have really happened before? It really happened! A company in Beijing does exactly that: give me one kilogram of yellow pear wood and I’ll give you one kilogram of gold! ! Is it eye-catching? ! Is it extravagant? ! The manufacturer isn’t crazy either, so there are only three possible explanations for this: 1. It’s the company that determines whether your yellow pear wood is genuine – if they say it is, then it is; if they say it’s not, then it’s not. It’s either one thing or the other ； 2. Their family controls all the yellow pear wood ； 3. Find someone to sell my piece of yellow pear wood for me, or I won’t even give you a kilogram of gold in return. Among these three possibilities, hype merchants generally choose option 3. Don’t you see how some people find a foreigner and offer 4 million to buy a Tibetan mastiff? They still won’t sell it to him. However, the manufacturer chose 1. No one came to replace it. 　　　　The price of yellow pear wood can range from 20,000 yuan per ton to 8 million yuan per ton. This matter reveals two kinds of vices: first is the trend of sensationalism in this society; if it were the only pair of shorts ever worn by Cixi, it might be okay to use them for entertainment purposes to amuse the public. Is a kilogram of broken wood really worth 8,000 yuan? Do the people who buy it even have any brains? Are the furniture pieces made from a ton of yellow pear wood meant to be used as altars for ancestors at home or as seats? But it can still be hyped up. Could it be that the saying \"The poor don’t know how rich the rich are\" is true, if someone really buys a bunch of yellow pear wood worth 8 million each? I’m really puzzled as to how he can have such high intelligence Secondly, there is the irresponsibility of the media; journalists have truly become prostitutes. I know that one page in the People’s Daily costs 300,000, and ordinary people can also hold wedding banquets in the Great Hall of the People. But as a media professional, one should have some principles; if you’re talking about 8 million yuan worth of Huangliu wood, then it loses its meaning to keep boasting that it’s a wood that will remain intact for thousands of years. In terms of stocks, this represents a positive scenario where a profit can be realized at 20,000 yuan per ton; any further increase would turn that positivity into negativity. I know you get 2,000 yuan for attending a press conference; the newspaper gains something from publishing the news, but at the very least you should think about whether what you write isn’t too terrible. Even when selling, there should be a bottom line. 　　　“The definition of the term “hype” is: repeated publicity through the media in order to increase the influence of a person or thing. 　　 For anything that is being hyped up, it’s necessary to first identify its selling point; this selling point can stimulate the brains of all those involved, causing adrenaline levels to rise rapidly, and the more you think about it, the more reasonable it seems. Excitement spreads from mouth to mouth; even a thousand lies can become truth. Truth lingers in the minds of everyone who wants to get rich without working, to become wealthy overnight. The fastest times of dissemination are those when prices rise sharply. 　　　　All speculative assets, once the subsequent funding cannot be replenished at an exponential rate, will lead to conflicts within the platform, followed by a sharp decline in value. 　　　 　　For something to be able to become a popular product, it must possess several characteristics: “First and foremost, it must have some selling point; the Clivia has such a nice name, and as you take care of it, it seems to transform into a true gentleman.” ； Tibetan mastiffs are invincible; they can even defeat lions ； Pu-erh tea promotes longevity and becomes more valuable over time ； Stamps cultivate the soul. . Secondly, there must be scarcity at some stage: At first, Sansevierias were mainly kept in Changchun ； Tibetan mastiffs are only found in Tibet ； Pu-erh tea grows in the deep mountains, unknown to most people ； Wrong stamps are rare to see. . Thirdly, at the beginning it should be compatible with the general purchasing power level of that time, or affordable with some effort. For example, those stamps cost ten or twenty yuan each, and that’s about all the money my roommates have ； Pu-erh tea costs just a few dozen yuan per piece ； Spathiphyllum plants cost a few yuan each. As for Tibetan mastiffs, I don’t know how much they cost at that time; I think when they weren’t yet famous, their price was probably only a few thousand yuan at most. 　　　　 　　Why should I list the general purchasing power to adapt to it? This is very important. When everyone contributes materials, the flame burns brightly; only if everybody can afford to throw in money can the fire burn fiercely and emit intense light, attracting more people like moths to a flame. Fourthly, the demonstration effect: those who were ahead made money, either by chance or deliberately. Those who came later followed suit right away; as everyone started throwing money, dogs became valuable in terms of money, while people regarded dogs with respect ； Whoever has a pot of Clivia is like a sage or an immortal. With Pu-erh tea, who says it’s unhealthy? Instead of BrainWhite, give Pu-erh tea as a gift. After achieving these psychological satisfactions, there’s also the increase in the ‘wealth ratio’ as indicated by the diary (if you own a few Tibetan mastiffs, then you’re considered a millionaire). Everyone gets it now: you don’t need to work or produce anything to make money; you can just play with dogs, grow flowers, and still earn income. So a large number of people went in to make purchases; it was at this time that the flames were brightest, the most silver was poured in, and prices rose the fastest. Those who enter at this time are mostly moths flying into the fire. 　　 　　It’s the last paragraph; let’s talk about houses. 　　　　I can say with certainty that the construction cost for elevator-equipped apartments in Shanghai is 2,500 yuan. The reason why the construction cost in Shanghai is 1,800 yuan higher than in other places is that deep piles need to be driven in Shanghai due to its unique geological conditions. 　　　　Is the house overpriced? Of course there is! However, the biggest speculators here are not speculating on houses, but on land. The rest are all followers. In other words, those who speculate in land have stolen the chickens; those who bought houses a few years ago have obtained the eggs. Whether they can get more eggs by buying more houses, or if they will instead be beaten up by the chicken owners, depends on luck. The hype surrounding houses is different from those things I mentioned earlier; it involves a top-down frenzy, with theories, organization, and action involved. By now, it involves everyone in the community. Take my family as an example: we had a high number of children in our family. My parents raised four siblings, and none of them held any significant positions or were extremely wealthy. They were just ordinary people who went to work and had to act according to their bosses’ instructions. Yet, after doing the calculations, I found that we still owned 7 apartments. One leaf tells of autumn; from this, one can still see the enthusiasm of the entire population. 　　　　There are several misconceptions regarding housing: 1. Wages have increased by so much since the 1990s. In the early 1990s, the salary was 200 yuan; by 2010 it was 5,000 yuan. It has increased 25 times in 20 years. But has anyone calculated how much the average salary in various industries increased from 2005 to 2010? Excluding those shameless state-owned monopolies, a 20% increase in salaries would already be remarkable in other industries; in yet more industries, salaries actually decrease instead of increasing. Why is the growth slower towards the end? The share of wages in GDP is decreasing year by year, while taxes are increasing by around 20% each year. **All financial resources are focused on undertaking major projects to keep driving GDP growth. So the statistic of 10% annual growth in income is just as ridiculous as the 1.5% increase in housing prices last year. . 　　 　 2. Buying a house preserves its value. The value preservation of buying a house is based on an annual increase in housing prices of 20–50%. Buying a house to preserve its value and buying stocks are forms of investment that involve receiving dividends; they are things that can be discussed but cannot be considered as true facts – they are essentially \"false truths\". (1) A house is not a tangible asset; it becomes older over time, so how can its value be preserved? Would you be willing to pay a high price to buy a house from the 1990s now? Would you buy a house from the 1980s? Then why do you expect a house to maintain its value on its own? 　　　　(2) Can the house be rented out? Let’s not talk about renting for now; the return on it isn’t as high as that in a bank. It’s the troubles that come from having to get up in the middle of the night to replace a light bulb for a tenant, fix a toilet, or buy a switch just to take care of these things. Not to mention that having some money means one should act like a lord, not otherwise. . . . 　　　　(3) With inflation, only real estate retains its value. You can take a look; back then (in 94, 95?,) bank deposit interest rates once reached 10%. If you buy a house with a loan, how much do your interest payments increase each year? Have you calculated it? If you don’t take out a loan, the interest alone on 1 million in the bank will be 100,000. Which one is more effective at preventing bloating? You’re right; it’s not appropriate to save money now. But does history always stay in the present? Don’t we still need to keep moving forward? To put it simply, it’s not because the U.S. hasn’t raised interest rates; if countries weren’t afraid of hot money flowing in, interest rates would have been raised to 4% long ago. For bloating, you need to take deep breaths – something even elementary school students know. Do you think the Statistics Bureau knows everything? Myth 3: Housing prices cannot be controlled; the prime minister is no match for the general manager. 　　　　As mentioned earlier, the biggest speculators this time are those who speculate in land prices; therefore, what’s being done is actually to regulate public opinion while only pretending to regulate the real estate market, just for show. If one really wants to take action to regulate it, not just one general manager will suffice – even ten general managers or ten governors would be enough to handle it. ***Everyone knows who that is, right? You know who he is, right? One of his lackeys Won’t it still be poured inside and spill on the ground? 　　　　Some people also say that so-and-so’s brother and his entire family are all in real estate; how could they bear to restrict their own interests? Then let me tell you that the biggest player in stock trading is the **pension funds; no matter how much stocks fall, they still make a profit. Do you know what the principle is? Before the adjustment, these funds were able to exit safely at the peak. Hehe, before any actual regulatory measures are introduced, how could these profiteers not be aware of them? Could such measures really affect them? Who sold all those properties that saw such high volumes of transactions? ? After all, there are people who will be remembered in history. Whether it’s fragrance or sulfur dioxide, for those who will and indeed will make judgments about history, a small profit of just a few cents is nothing significant; after all, they don’t lack money. Billionaires engage in charity. As for what you said about bureau chiefs and mayors being nothing but pawns, officials in China only obey their superiors and not their conscience. Those who clearly understand the intended meaning above will succeed, while those who do not will surely be eliminated. 　　　　China has hundreds of major industrial categories, and if we go into more detail, there are certainly well over ten thousand such categories. Don’t try to adjust your real estate holdings – doing so will just lead to your downfall; it only takes a fraction of a percent to bring you to ruin. Moreover, a drop in housing prices does not mean that the real estate industry is affected: does Pu-erh tea see higher sales volumes when its price is 500 yuan per kilogram, or when it is 50 yuan per kilogram? The selling prices of houses have dropped; while previously 60,000 new homes were sold each year, now 100,000 are sold. Which of these has an impact on industries such as cement, rebar, flooring, furniture, and home appliances? . . Or things like architectural design, construction workers, and so on are more advantageous. Therefore, there is no impact on other industries. 　　　　What’s truly problematic are the local warlords; at the central level, the money that has been collected refuses to be allocated downward ； The method I came up with to raise funds is by selling land. If you don’t let him sell it, you have to find him another way out; you need to block his escape routes. A sign was put up on the back road saying that those who come here will be held accountable! The alternative is to impose a retention tax when revenue from selling land decreases. There are four of us siblings in my family; we’re all ordinary people from rural backgrounds, with no parents we can rely on. None of us in this generation has achieved high positions or earns a great deal of money. Therefore, it’s impossible for ordinary people to reach our level – they can no longer be considered true ordinary people. Just these few people bought 7 apartments. It can be seen from this that: 1. This has definitely become an issue involving everyone in the society – everyone is involved! 2. Those who are responsible for creating hype need to make amends; we ordinary people have all taken part in this, looking ahead there’s a sea of people, and looking back… good heavens. . How many more people can rush in at a higher price? 　　 **The reason for regulation now, and it’s highly likely that it is genuine regulation, is that there are fewer and fewer people capable of taking on such responsibilities. Intervening earlier has a lesser impact on the economy; if it’s delayed by another year, no intervention will be necessary at all and the economy will collapse naturally, leading to a hard economic landing for banks. 　　 By those who have the capacity to take over, I mean those who buy it to live in themselves. This is because money invested in real estate with the aim of preserving its value constitutes hot money in the real estate sector, and hot money is the most liquid type of capital; once there is no profit to be made, it immediately disperses, leaving chaos in its wake. The term \"hot money\" refers to money that moves quickly; it’s also money that feels hot to the touch, and it is this kind of money that has the greatest destructive power. The Southeast Asian crisis was caused by the inflow and outflow of hot money. 　　 Let me tell you about my brother’s story. I’m not sure if it’s representative, but it certainly reflects the hardships faced by those born in the 1980s when buying a house. My brother is honest and hardworking, with a strong desire to improve. After three years of work, I became an assistant to the chief engineer at a medium-sized state-owned company, and I also had a few subordinates under me. I had the hope of becoming an excellent engineer and contributing something to our **electric power machinery industry**. But in the blink of an eye, I reached an age suitable for marriage, and my girlfriend’s demands weren’t high – after all, to start a family one needs a house. The younger brother checked the housing prices, tried several times to negotiate a higher salary with his boss but failed, and then resigned in anger. After resigning, failing to find a high-paying job, an engineer with 5 years of experience could only land a job paying four to five thousand yuan. It turns into an angry young man, staring at everyone. I was worried that he might turn antisocial, so I helped him set up a small company. Although his income increased, seeing him, who seems honest and upright, constantly engaging in scheming, petty calculations, and cunning maneuvers made me feel very sad. 　　　　My brother started a company over the past two years and earns two to three hundred thousand per year; my sister, who works for a multinational company in the top 500, earns seven to eight thousand per year. At the beginning of this year, the 1.5 figure from the statistics bureau, combined with his wife’s six-month pregnancy, left him no choice but to buy a house. I believe an income of three to four hundred thousand per year is considered reasonable for someone his age, but he still barely manages to afford a house. Saving money can never keep up with the rate at which it’s spent, and one is also unwilling to borrow money from family members. His concerns stem mainly from the global economic crisis; given the difficult conditions in various industries, his wife changed jobs due to corporate layoffs worldwide. As for his business, who knows how much profit he will be able to make tomorrow? He often admires those who can take out a loan for twenty years and borrow millions yet still sleep soundly. 　　　　My brother’s example shows that even those who have worked hard for 7 or 8 years each, and thus earn a decent income, still find it quite difficult to afford a house in Shanghai – a city that is unique in the world, belonging not only to China but also to the entire globe – for those who need housing. 　　 Before CNPC went public in China, Buffett began selling its shares at 12 yuan each; later, when the stock price in Hong Kong rose to 18 yuan, Mr. Buffett said with a sly smile that he had underestimated CNPC’s growth potential and sold too early. I believe he didn’t mean it when he said those words; he was pretending to be ignorant while actually knowing the truth. As a result, when CNPC went public, its share price of 48 yuan meant that countless kind-hearted Chinese citizens were left forever at the level of Mount Everest. Why was oil chosen? State-owned enterprises monopolize the upstream and downstream sectors; when their profits are high, it’s considered that there are too few such enterprises, while when their profits are low, they receive subsidies. The extraction cost is $20 per barrel, with a selling price of $80. What a huge profit. And that’s exactly the problem: all the benefits you can list have already been reflected in the stock price, which means what was once a positive factor has turned into a negative one. When the stock was at 17 yuan, you said that PetroChina was a good investment option because it is a state-owned enterprise with a monopoly over both upstream and downstream processes, and thus receives support. If you still insist on buying it at 40 yuan using the same reasoning, then you’re being foolish – because those 23 yuan extra already account for all the advantages you mentioned. Everything that is hyped up needs to have a selling point; once that hype is reflected in the price, it is no longer a factor driving price increases. 　　　　That’s the case with all hype; once the reasons for that hype have been fully reflected in the price, such hype loses its ability to continue existing. It has once shone brightly and been glorious; what remains is for dust to return to dust. Have you ever seen a feather that flies in the sky forever? 　　 The price of houses in an area of about 100 square meters around me is around 2.5 million. All the potential marketing gimmicks have already been reflected in prices: land shortages, urbanization, the need for improved housing, transportation issues, inflation, population migration, bank ties, and GDP. . . . . . Even features that aren’t selling points have been hyped up. . . Sex has turned into a real stock market, where people make money by telling stories. A friend earlier criticized me, saying that stock market speculation actually helps companies raise funds and undergo restructuring, and what he said makes sense. Sex-related hype has accelerated urban development and the improvement of residential housing. This is viewed from a macro perspective. But we ordinary people lead our lives on a smaller scale; we don’t have such a high vantage point. If you keep asking me to stand on Mount Everest and look down at the whole world, I’ll freeze to death after standing there for too long. 　　　　For Tibetan mastiffs, you can find a proxy to buy them for – even 4 million won’t make you sell them. Dogs worth just a few hundred thousand won can neither be used for meat nor for guarding the house, nor can they serve as pets. Do you really need to find a lion to train with it every day just to enhance your **strength**? For a three-bedroom house, you can drive its price up to several million to turn it into a luxury home; you can keep it at a lower price to protect it from depreciation. However, the value of property is determined by its market demand – a residence worth over 2.5 million must be sold to those who truly need it in order to realize its full value. These people should have the following characteristics: 1. A stable annual income of over 300,000 ； 2. In previous years, when prices were low, my income was low; I wasn’t married nor did I own a house ； 3. I am firmly convinced that CNPC will be able to issue shares worth over a hundred yuan each ； 4. I have **great confidence**, believing that economic development progresses every year in line with the statistics provided by the Bureau of Statistics ； 5. There must be many such people, enough to snatch up these increasingly old houses. Speculation is not scary, nor is hype. As for the hype itself, as long as you can find a buyer and manage to raise the price in order to deceive that buyer into buying it, then you should buy it. For us ordinary people, it is only natural to think more about ourselves. The fear is that while others steal the donkeys, we have to pull out the stakes – with no benefits at all and only risks. Buy and sell, buy and sell – think about selling before you buy. Buying is easy; selling is a real art. First, we need to analyze the market – what is the demand like? When the price of Clivia is high, there is a surge in buyers, but that doesn’t mean there is actual demand. These buyers are there to sell at a higher price. Such money is called hot money; such people are not called users but intermediaries, or speculators. It is a short-term demand that can be converted into sales at any time. 　　　　Sex has become the biggest issue in the Chinese economy over the past decade precisely because it is different from other products. Once other superworks gain hype, they basically immediately lose their original practical value. For example, a Tibetan mastiff worth 200,000 can no longer be used for guarding the house, herding sheep or cattle, or as meat to serve with alcohol ； Yellow pear wood, at 8 million yuan per ton, immediately loses its value as a material for furniture. And houses need to be occupied, which means that no matter how high the prices are, there will always be some buyers who purchase them for their own residence. 　　　　But houses, to a certain extent, are like what some people say: “Houses aren’t built for the poor, nor for those born in the 1980s.” ******The words are crude, perverse, and shameless, but the description of the facts is absolutely correct. There is a lot to ponder behind these words: they suggest that only wealthy people can afford houses, that one person can only sleep in one bed, and that if you buy ten or twenty houses, you can’t take turns using them for sleeping – you’ll have to sell them. Since the poor, those who need houses, can’t afford them, then who are you going to sell them to? Sell it to other rich people? Where on earth are you going to find people who have money but no house? 　　　　So, in these first-tier cities at least, house prices have now become a matter of speculation among speculators, with only a small number of people buying them for residential use. In other words, it’s not easy to find someone to take over. So, with the hype reaching this point, it has reached a dead end. 　　 Even more intense: There are clivia and orchids planted in the yard, Tibetan mastiffs kept in cages, Pu-erh tea brewed in purple clay teapots; furniture made of rosewood is used, and one can admire their favorite stamps, Hetian jade, and rare stones. The several houses in Tongzhou are filled with garlic, cotton, and yellow pear wood. From time to time, they chat on their mobile phones: “Lao Li, which stocks on the GEM board hit their daily price limit today?” ” 　　 When people sit in different positions, they tend to listen and believe in things selectively. For example, regulation will harm the real estate sector. Is it true that a drop in prices harms the interests of the real estate industry, that is, it undermines the real estate sector? This is a wrong inference. 　　　　Fluctuations in oil prices have little impact on the profits of gas stations, as these stations purchase oil at higher prices from CNPC when prices rise. Just as rising pork prices don’t necessarily benefit pig farmers. On the contrary, costs rose, sales decreased, and profits fell. In buying and selling, it’s about the cost price and the selling price. 　　　　If you have a cold, you need to take medicine; if you have appendicitis, you need surgery. Getting organized is healthier. By health is meant the ability of more people to afford homes, the ability of more developers to purchase land, and the production of products by various upstream and downstream companies that are used to build homes thereby improving people’s living standards. **More taxes were collected, and the local authorities also sold land to build cities. 　　　　Things in the world are a process of mutual compromise; you can’t keep benefiting at the expense of others. **It’s been great for ** for 10 years now; those born in the 1980s who buy apartments end up having to work hard for 30 years with no real return. If prices aren’t regulated, it’s as if we’re forcing them to revolt, or else they have to rely on lottery wins – they can only hope to improve their situation by gambling all the time. In that case, there’s no hope for **. At this point, **compromise is necessary. 　　　　The golden decade of real estate benefited a host of real estate companies and those who owned multiple homes. But these people are like those who held stocks at 6,124 points in the stock market – **they managed to produce 13 sets of ‘gold medals’ and 24 editorials calling for housing prices to drop to levels seen before 2007; it’s just as if stock prices had dropped to 3,000 points.** Will stock prices reaching 3,000 have an impact on society? It’s just that there’s less virtual wealth, which eliminates some of the liquidity that could lead to inflation. 　　　　Affect banks? A friend at the bank told me that with house prices falling by 30% now, the risk associated with lending by banks does not exceed the average level of risk for the entire banking sector. 　　　　But real estate, after being cleaned up, can start growing healthily again, and a considerable number of people will be able to afford to buy homes. 　　 As I mentioned earlier, investing or speculating should be done in line with the trend, taking the overall situation into account. Understanding the situation and assessing one’s own capabilities are of primary importance in how we live and act. Those who think that just because they own a few small houses, they can kidnap banks, side with the rich, and thus be in a position to challenge others; those who believe they deserve special policy protection are simply overestimating themselves. In such a state of emotion, you can’t see things clearly. All under heaven belongs to the emperor; one can regard oneself as important, but should not take oneself too seriously. 　　　　At the beginning of 2009, our second-in-command said that confidence is more important than gold. Confidence is a positive expectation for the future. Expectation is a judgment of the situation. At that time, the real estate sector was in a precarious state following the regulatory measures implemented in 2007. The second-in-command took a look at the employment rates and at those major steel factories; this led to media speculation about an economic crisis for a whole month. After showing that he had no choice but to take such actions, he finally made up his mind and told them that refusing to engage in the real estate business meant certain death from thirst, while by getting involved they might be able to overcome the current difficulties. So, these words were spoken regarding the stock market and sex. What does it mean that confidence is more important than gold? It means that you should build confidence and boldly invest in real estate and stocks. As expected, the fund managed by that team stepped in to support the market, and the overall index rose steadily from 1800 points to 2600 points without any pause ； A series of **policies to encourage speculation were introduced during sexual intercourse; if you lack money or influence, the bank will lend you money for free. It’s just that there’s no deadline specified after using it; whether it’s ten thousand years or one year remains unclear – there’s a hidden trap in this regard. 　　　　Pethidine can relieve pain when used in appropriate amounts, but excessive use can be fatal. One shouldn’t drink too much poisoned wine; Viagra is enough to provide pleasure for a few hours. We can indulge in festivities from time to time, but not day and night. The bubbles that were intended to be burst in 2009 were not popped further due to the economic crisis; when 2010 arrived, the GDP and CPI figures for the first quarter came out, and the elders felt relieved and prepared to stop using stimulants. As usual, public opinion takes the lead; after a multi-dimensional bombardment by land, sea, air, and space, it is then said to all those involved that the river has been crossed and the bridge should be demolished – for anything that is filled with blood will eventually lose its blood. Otherwise, if it’s not the corpus cavernosum, then it becomes ribs. 　　　　If you can’t even notice this change, if you can’t even discern the determination to bring things to a halt, then how dare you deal with capital. . . **, **Right now it’s just putting a lid on the issue; what’s needed next is to address the root cause. We’re all just ordinary people; do you really think having a few houses will allow you to put on a mask and mix yourself up with interests? That’s just asking for trouble. 　　 The human subconscious is very interesting. For example, by checking the posts on the housing forum, you can find out who wants to sell a house and who wants to buy one. Those who own a house can’t stand to see housing prices drop, while those who don’t own one hope for a decline in prices. As an emotion, it’s normal, but it’s not the most rational. That’s why some theories of experience are based on mental models, which is what the prime minister meant when he said that confidence is more important than gold. 　　　　A relative from my hometown is a senior intellectual who once served as the head of a research institute; at 60 years old, he should be a very rational person. She called me and said that her husband had pleural effusion for 10 months, and anti-tuberculosis treatment had been ineffective; she asked me to find the best experts in Shanghai to take a look at his condition. I told her it definitely isn’t tuberculosis; the possibility of a tumor is high, so let’s do a thoracoscopy to confirm the diagnosis first. She gave a bunch of reasons for refusing, so I consulted several experts on his medical records, and they all recommended using thoracoscopy to first resolve the diagnostic issue. After the pathology results came in, my relative still doubted the diagnosis of pleural tumor. He consulted a bunch of experts, and when he called me for advice, I had no choice but to persuade his son to trust the doctors and the diagnosis, to start treatment right away, and to stop subconsciously rejecting the idea of having a tumor. Because nodules on the pleura were already detected during a PET scan 10 months ago. But they refused to conduct an interventional diagnosis and insisted it was tuberculosis, which delayed the optimal treatment window. 　　　　If one focuses only on themselves, chaos ensues. She initially underwent a PET scan in order to rule out the possibility of a tumor; yet when a tumor was indeed found, she refused to acknowledge it or accept a diagnosis. She is a capable woman; she was the first strong-willed woman to emerge from our small village since its establishment. Yet, in the face of her loved ones’ aging, illness, and death, she deceived herself and continued to believe it was a benign disease for 10 months. 　　　　This incident really touched me: people tend to make selective judgments when it comes to matters that are of great personal importance, choosing only those aspects that seem favorable to them, constantly deceiving themselves and eventually succeeding in doing so. 　　　　A teacher I hold in high regard was diagnosed with rectal cancer. His family kept it a secret from him, but given his medical background, it was impossible to hide from him the timing of the surgery and the criteria regarding the extent of the resection required. I went to see him, and from his words it was clear that he truly believed he had a benign tumor! This is also beneficial for his recovery; I hope he really doesn’t know. 　　 In my free time, I did some things on my own and got in touch with various industries. Since 2008, small and medium-sized enterprises have been facing the problem of insufficient funding; one issue is the difficulty in obtaining financing, and another is that business owners are unwilling to invest more of their own money into their companies. In the real estate business, one has to work hard every year; it’s already difficult to achieve a 10% return, while those who buy several properties together can earn high profits. Investing 10 million to buy a few houses won’t lead to new production nor solve employment issues; whereas using that same 10 million to build a new factory can create hundreds of jobs and enable the production of shoes, toys, or small equipment. Therefore, although these small and medium-sized enterprises contribute limited taxes, they are the best at solving employment issues. Raising the price of housing to one million yuan per square meter is merely a form of wealth redistribution within the country; it fails both to protect the country from external threats and to ensure stability at home. 　　　　The real estate industry does indeed have a somewhat \"once my flowers bloom, all others wither\" vibe. This is indeed a **issue that must be taken into account at this level. Ordinary people are extremely tolerant, but you can’t push them to the point where they have no job and no food to eat. 　　 The internet bubble was short-lived; I remember that the rapid development of the internet began around 1997 (when the first signs of a bubble appeared). After rapid growth in 1998, it reached its peak in 1999, and by 2000 it disappeared in its most glorious moment. Some of the phrases from that time still seem outrageous and creative today: “The focus is on input, not output” – because there is simply only input and no output at all ； “What matters is land acquisition, not profits” — because there are no profits ； “We create websites for venture capital; with that capital, we can go public to raise money” — first trick one into investing, then trick thousands more ； “The internet wins in the long term” – you may not make money now, but you will make a lot in the future. . . . Wait, wait, wait. On Anti-War Street, billboards and buses are covered with advertisements for all sorts of odd websites; the promotion of these sites relies on exquisite gifts and attractive models to meet the various needs of visitors – in other words, as long as I have it, and as long as you want it! 　　　　There are indeed those who succeed; a guy from my same class but in a different major came to see me one day and said that he had heard that I had created a small website for my company, and he tried hard to get me to join him in that effort. This guy is extremely eloquent and persuasive; if it hadn’t been for the spit that would occasionally fly into my face as he spoke in that filthy little bar, I might have been tempted to join him. Speaking of the small website I created, it’s just something I made after learning web development skills for a few days; I found a free server and created dozens of pages with links. I was really young back then; I went without eating or sleeping for about two weeks, and once I worked continuously for 36 hours. That guy spent several months working alone on his computer in his dormitory, working on an idea that was something like a “search engine”; later, in 1999, he sold it for 8 million. Our salary at that time was 2,000 yuan per month. This guy is a real character; we keep in touch from time to time. When he’s feeling down, he comes to me for a drink. Later on, he got involved in gene and nanotechnology projects – the pattern is always the same: what’s sold is just a concept, and once something is developed, he looks for someone else to take over it, regardless of whether there are many people interested in it or not. I often think, unkindly, that if Han Xin could endure such humiliation, why can’t I bear a few drops of spit? . 　　　　What’s going on in the GEM market these days is essentially the same as what used to happen with internet companies back then; what matters is \"growth potential,\" \"future profitability,\" and \"room for growth.\" The funds that enter this market initially target the ordinary people in the stock market who are interested in such stories. Once they can cash out, they leave immediately, without even looking back, let alone waving goodbye. 　　　　The skill lies in being able to tell stories to an audience; if those stories are interesting and convincing, then it’s possible to make money, even a lot of money. 　　 Telling stories requires some thinking. One also needs to use one’s brain when looking at problems. Considering **this process of preparing public opinion alongside the increasing intensity of regulatory measures, the following points can be confirmed: 1. The regulations are indeed real regulatory actions** ； 　　　　2. Regulation must yield results; if this approach does not work, more efforts will be made, or other even more stringent measures will be introduced ； 　　　　3. As is customary, it is now a sensitive period for assessing leadership transitions; it is also time to evaluate the performance of local officials, as poor performance can affect their promotions and career advancement. Which is more important, a purse or a career? 　　　　4. This time, the focus is on first-tier cities, with various regions rushing to issue specific interpretations and implementation measures for their policies. Taking Shanghai as an example, at the end of last year, the mayor began to speak out, both in public and in private, calling for a drop in housing prices ； What does that prove then? One can draw on Mayor Han * Zheng’s previous public claims that investing in real estate guaranteed a profit. 　　　　5. The trend will become clear in three months. 　　　　There are also a few points that are not certain: 1. What is the bottom line for regulation? What percentage reduction is the starting point this time, 10%? 30% or 50%? 　　　　2. Once a downward trend is established, **will regulatory measures be relaxed again or will there be policies introduced to support the market? Is the trigger the poor performance of GDP, or the deterioration of local **financial conditions? 　　　　3. How to guide the flow of these funds? A way out must be found eventually. Which **monopolized resources should be opened up for them to access is a question that needs to be considered. Done. . . .