Investment into overdraft? LED selection is difficult due to herd effect

Taiwan Dongbei photoelectric Group invested $25 million in LED production of optoelectronic devices on the project in Beijing before the digital TV industry park officially started, Jiangsu Dongbao photoelectric technology limited company 1 billion 200 million yuan investment in the construction of LED Photoelectric Industrial Park project, Yunnan bay wall Photoelectric Technology Co., Ltd. invested 110 million yuan of LED lighting products research and development center and production base completed... In... LED, investment phenomenon is increasingly clear, whether it is a listed company, or private enterprises, foreign invested enterprises, like that "LED" is equivalent to "big money", even the clothes, do panel, do real estate, do mobile phone are coming in, want to invest in LED industry. This reporter concerns, "herding", I am afraid that LED "investment" into "overdraft", finally let investors "no blessing".

Fear of LED investment caused by the herd effect changed overdraft

Herding is a kind of thought or behavior, which is often influenced by the majority, followed by the public". People follow what the public agrees, and they don't think about the meaning of the event. Herding effect is the basis of resorting to mass fallacy. "Herd effect" is a metaphor for people have a herd mentality, herd psychology is likely to lead to blind obedience, and often tend to fall into the trap of deception or defeat.

There is no doubt that the LED industry is now a huge potential market opportunities. Because the LED light source has the advantages of energy saving, environmental protection, digital design and other advantages, can be widely used in backlight, display advertising, automotive lighting and traffic information identification, general lighting and other fields, the traditional source of replacement is accelerating. In particular, the country began to gradually eliminate incandescent lamps this month, which undoubtedly for the energy-saving lamps and LED lighting to make room for greater development.

However, in the Aladdin lighting news network reporter, the broad market outlook is the main cause of LED investment boom. LED investors are learning and imitation phenomenon in the transaction process, "suit", blindly follow others, forming the so-called "herd mentality", which is a common phenomenon in the management of some enterprises, market behavior. Due to the LED industry information cognition is not sufficient and lack of understanding, LED it is hard for investors to make rational expectations of future market uncertainty, is to extract information by observing other businesses, the behavior of the person, in which information is continuously passed, many people will be roughly the same information and reinforce each other, conformity the resulting behavior. The herding effect of LED investment is a nonlinear mechanism of collective irrational behavior caused by individual rational behavior.

The sheep is a very messy organization, usually together is blindly, but once there is a sheep move, all the rest will without thinking to jump on the bandwagon, regardless of there might be a wolf or a better grass. It is clear that in recent years, government subsidies to attract business investment, and thus promote the growth of local GDP model, to stimulate the domestic LED industry to flourish. Even the government wants to support investment, LED industry, other investors will continue to "sit"?

Is the Pearl River Delta region, Guangzhou, Optics Valley, Optics Valley, Jiangmen, Kyushu light Bo is in support of the government or the completion of investment projects. "Herding" in a very competitive industry, and is a leader in this industry (leader) occupy the main attention, so the whole flock will continue this imitation leader leader where every act and every move, "eat grass", other sheep where to go "gold".

The reporter learned from some of the industry in the LED industry, now the investment has more than two kinds, one is for the concept of speculation, such people do not understand the industry, only LED three English words; two is directed to government subsidies, even at a low price bidding.

For individuals, with the others behind every step will inevitably be eaten or eliminated. The most important thing is to want to enter the LED industry individuals have their own ideas, do not take the unusual way is the shortcut to stand out for you. Whether it is to join an organization or to start a business independently, to maintain the sense of innovation and the ability to think independently.

"Herding" told us many times, and not saying: "people's eyes are sharp". In the market of the general public, often easy to lose basic judgment. People love to join in the fun, ". Therefore, the collection of information and keen to judge, is to allow people to reduce the blind behavior of LED investment, more rational use of their own best way. Aladdin lighting news network reporter believes that rational use and guide the herd behavior, you can create a regional brand, and the formation of scale effect, which was better than the benefits outweigh the disadvantages. With the entry of more and more, the threshold is not high LED industry competition will become fierce, investors need to pay attention to LED industry bubble, beware of excessive investment funds after the LED, the spirit of "overdraft".