What I'm Reading This Week (2024/10.06-10.12)

Table of Contents

• Trends
• What I’m Reading This Week (2024/10.06-10.12)
  • 1. Wealth Redistribution in the Chinese Stock Market: the Role of Bubbles and Crashes
  • 2. The Elite College Students Who Can’t Read Books
  • 3. Nobel Prizes 2024
  • 4. “影视飓风”: Analysis of Why Video Platforms Compress Video Quality

Trends

This week, China’s National Day holiday ended, and on the first trading day, almost all sectors hit their daily limit up.

This crazy surge resulted in extremely unreasonable price-to-earnings ratios for some online brokers providing online stock trading services. If estimated based on the current P/E ratios of these companies, even if they had been operating since the Qin Dynasty until now, they still wouldn’t reach their current valuation levels.

A large amount of foreign capital promoted A-shares during the holiday.

On the first trading day of October (10.8), retail investors who opened accounts during the holiday entered the market, with funds frantically pouring into Hong Kong stocks and A-shares, causing the market to soar across the board. Meanwhile, the short-selling ratio in Hong Kong stocks gradually increased, with CITIC Securities’ short-selling ratio rising from less than 20% on September 30 to 39.46%.

On the second trading day of October, almost all A-shares fell. The subsequent two trading days were also shrouded in gloom.

CSI 300 Index (sh.000300)

CSI 500 Index (sh.000905)

ChiNext Index (sz.399006)

Trading Volume Trend

Price Trend (pctChg)

What I’m Reading This Week (2024/10.06-10.12)

Good morning, this is the second week of October 2024.

1. Wealth Redistribution in the Chinese Stock Market: the Role of Bubbles and Crashes

A study from Tsinghua University focused on analyzing the dramatic market fluctuations in the Chinese stock market from July 2014 to December 2015 and the resulting changes in wealth distribution.

During this period, the market index rose by 150% and subsequently fell by 40%. Using trading data from the Shanghai Stock Exchange, researchers divided retail investors into five groups based on their total stock account value (including stock holdings and cash):

• WG1: Account value below 100,000 RMB
• WG2-4: Account value between 100,000 and 10 million RMB
• WG5: Account value over 10 million RMB

The study found that the wealthiest investors (WG5, representing the top 0.1% of wealth distribution) drove market growth by investing in large-cap stocks early in the market and withdrawing before the market peak, avoiding crash losses. Relatively poorer investors (WG1) typically bought at market highs and suffered severe losses during the crash.

In 18 months, over 200 billion RMB of wealth transferred from ordinary investors (WG1-WG4) to the ultra-wealthy group (WG5), equivalent to 30% of their initial account value.

This research reveals the phenomenon of wealth redistribution during market fluctuations. The ultra-wealthy group profits by timing the market, while ordinary investors often miss opportunities, ultimately leading to wealth flowing to the top group. This phenomenon is vividly described as “helping the lion eat the rabbit.”

2. The Elite College Students Who Can’t Read Books

• Decline in college students’ reading comprehension

  • Particularly noticeable in elite institutions
  • Students struggle to understand complex texts
  • Intellectual development and critical thinking are limited

• Analysis of causes

  • Changes in educational practices
  • Priority given to informational texts and standardized tests
  • Smartphones distracting attention
  • Increased emphasis on career-oriented skills

• Changes in high school students’ reading habits

  • 1976 data:
    • 40% of high school graduates read at least 6 extracurricular books per year
    • 11.5% did not read any extracurricular books
  • 2022 data:
    • The ratio reversed, with more students not reading than those reading more than 6 books

3. Nobel Prizes 2024

• The Nobel Prizes in Physics and Chemistry were both awarded to AI scientists
  • The Nobel Prize in Chemistry 2024 was divided, one half awarded to David Baker “for computational protein design”, the other half jointly to Demis Hassabis and John M. Jumper “for protein structure prediction”
  • The Nobel Prize in Physics 2024 was awarded jointly to John J. Hopfield and Geoffrey E. Hinton “for foundational discoveries and inventions that enable machine learning with artificial neural networks”

4. “影视飓风”: Analysis of Why Video Platforms Compress Video Quality

The quality of early video content is becoming increasingly blurry. To save storage and bandwidth costs, video platforms have compressed the bitrate of these old videos, resulting in a noticeable decrease in image quality.

Especially for those once-popular videos with high view counts, due to the need for frequent loading and playback, they are often compressed more severely, making the blurriness even more apparent.

The original video has been taken down, and “影视飓风”’s video can only discuss to this extent. More in-depth discussions might involve sensitive topics like telecom operators and peer-to-peer networks. A popular Weibo user, sunwear, once mentioned that those involved in DNS hijacking and early base station operations really made a fortune, but the original Weibo post has been removed.

In its early years, Baidu had data centers in Beijing and Shenzhen to solve the problem of north-south disconnection. Telecom traffic connected to the Shenzhen data center, while Netcom traffic connected to the Beijing data center. However, the crawlers and indexes on both sides were still not connected. They had to send someone to fly back and forth between Beijing and Shenzhen every day, carrying hard drives to copy the updated indexes. Backup Original

• Limitations of video compression technology

  • Although H.265 can halve the data volume of H.264, it still cannot cope with the explosive growth of video content

• Video compression strategies of mainstream platforms

  • TikTok: Supports 4K uploads but compresses to 1080P for display
  • Xiaohongshu: Prioritizes displaying 720P and 1080P videos

• Root causes of video platforms’ compression costs

  • High broadband fees from domestic operators
  • Monopolistic state of network access
  • Resulting in excessively high operating costs for platforms, forcing them to compress video quality

• Surge in the number of video creators

  • Explosive growth in the number of video creators over the past four years
  • Platforms face enormous data pressure