Stock The Highest And The Lowest Intrinsic Value

From the observation of development history of our stock market, we can observed that the stock index fluctuated acutely and periodically, and stock bubbles permeated the market everywhere. But theories and researches about the stock bubbles can not be seasoned with the economic system reform and market-building course in our country. Therefore, how to rationally define the stock bubbles, how to truly analyze the effect that the bubbles throw to the economy, and how to control stock bubbles, defend and eliminate the bubbles' risk are the points of this paper. The paper contacts the stock market' s actual situation, assesses the severe degree of stock bubbles, and then brings forward the countermeasure for controlling stock bubbles.This article first makes the outline of the situation of the stock market and the stock bubbles, pointing out that the imperfections of our stock market' s mechanism and the over-interference of government to the stock market are the direct causes of the stock bubbles. Besides, the quality of listed companies is not high, stock investors are speculators, and information is nonsymmetrical and so on ,which are the main reasons. In addition, it points out that the stock market bubbles are actually a double-edged sword. If bubbles are controlled under a certain scope, it is possible to improve the efficiency of resource allocation. However, if bubbles are too large, will harmful to the stock market or even macroeconomic.Secondly, the paper reviews the research results of value theory domestic and foreign, and analyzes the shortcomings of previous studies. At the basis of these studies, it deduces out the maximal value and minimal value model which take profit per share, dividends per share and net assets per share as study foundation. It defines the stock intrinsic value in a interval, is not just a concrete number. This is where the major innovation of this article.Thirdly, in the part of demonstration checkout, using the maximal value and minimal value model, adopting comparing analysis method and the multi-dimensional linear regression analysis method, making use of the SPSS statistical analysis tool, analyze the correlative data of partial representative enterprise among 300 Shanghai-Shenzhen index shares during 1994-2007 years. It makes qualitative analysis and quantitative analysis band together. The result demonstrates: the scale of stockjobbing in our stock market is high; there are certain extent bubbles in the stock market, but the bubbles existing in our stock market in the main form is rational bubbles. There also exists a certain extent non-rational black hole.Finally, the paper presents some recommendations about suppressing the stock bubbles. At the macroscopic aspect, except lessening governmental intervention, we still need focus on improving the quality of enterprises, standardizing market behavior and information disclosure. At the microcosmic aspect, through extending the functions of raising limit, encouraging listed companies to repurchase shares, as well as prohibiting fictitious transaction to suppress irrational bubbles. But it is stressed that we should pay attention to the stability of policies, avoiding stock market' s fluctuation, thus triggering social unrest.