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SCMP Reporter

Millions of mainland stock investors are at a crossroads. To buy or not to buy is the question that has them baffled  after a 24.2 per cent surge in the main index  this year.
For most,  last year's 65.4 per cent drop  wiped out  years of savings while all the signs were showing that things would get even worse.
However,  the market got a shot in the arm from Beijing's rescue  policies ranging from the 4 trillion yuan (HK$4.54 trillion) stimulus package to  measures supporting   key industries.
Chen Zexuan will  chase the rally. 'Sooner or later, the fundamentals will improve as the stimulus packages take effect.  It's time to buy.'
Mr Chen is not alone. At a brokerage outlet in Shanghai on Tuesday last week, more than 100 retail investors were hoping to make the most of the market revival, only to find that they might have fallen victim to more market upheavals.  Most  are senior citizens.
After the market closed that day, with the Shanghai Composite Index tumbling nearly 3 per cent,  the investors  regretted not having cashed out earlier.
They were not wrong. The benchmark indicator continued to fall sharply the following day, closing down 4.72 per cent.
A broker said the number of investors showing up at the outlet had doubled this month  because of heavy liquidity  that analysts believed was the  result of  speculative capital entering the system.
Daily turnover on the Shanghai and Shenzhen exchanges almost hit  levels last  seen in 2007, when the key barometer kept scaling new highs.
'We don't need to get the fundamentals right,' said Zheng Rong, an  entrepreneur who has invested more than 2 million yuan in stocks. 
'It's a zero-sum game and the smarter ones win.'
Two investors were discussing trading strategy in front of a computer screen showing the movements of  Shanghai New World's shares.  
 'It is obviously a churning based on the surging volume in  last-minute trade,' said one investor. 'We should buy into it tomorrow morning, following the big investors, to sell high later on.'
They were typical of  dozens of investors. Liang, the trading value of an individual stock, is a buzzword when these investors talk among themselves.  Worldly wisdom abounds  in their conversations.
 'A true forecast of the market movement should be based on the weather forecast,' said a man surnamed San Mao. 'The market will fall tomorrow because weather forecasts say it will rain.'
Mr San Mao  was indicating the value of investments can depend on something as unpredictable as a mood swing.
He was right, the next day the market fell again.



Market mood swings baffle small investors