Unlock the Stock Market Secrets Behind the TV Drama ‘Flourish’

Recently I have been watching the TV series “Flourish”, set in early 1990s Shanghai, which portrays societal changes and intertwined destinies; within this backdrop, the stock market serves as an important economic phenomenon affecting the characters and marking the era. To help viewers interested in the drama but unfamiliar with the stock market, this article introduces basic knowledge, concepts, and terminology.

1. Basic Concepts of the Stock Market

The stock market, or securities market, is the venue where stocks and other securities are bought and sold. Investors can purchase or sell stocks, which represent a portion of a company's ownership. Companies issue stocks to raise capital, while investors buy them hoping for returns.

2. Types of Stocks

Stocks are generally divided into two categories: common stock and preferred stock. Common shareholders have voting rights and receive dividends, but in liquidation, preferred shareholders have priority. Preferred stock usually offers a fixed dividend and may lack voting rights.

3. Stock Market Terminology

IPO (Initial Public Offering): the process by which a company first sells its shares to the public.

Share price: the market price of a single share.

P/E ratio (Price‑Earnings Ratio) : the ratio of a company's share price to its earnings per share, a key indicator of stock value.

Institutional investors : organizations with large capital such as pension funds, insurance companies, banks, hedge funds, etc., whose large trades can significantly impact stock prices.

Retail investors: individual investors with relatively small trading volumes and limited influence compared to institutions.

Insider trading : illegal trading by financial professionals using non‑public information for personal gain, violating market fairness.

Blue‑chip stocks: shares of large, financially stable companies with a long history, considered safe and stable investments.

Stock market indices: e.g., the Shanghai Composite Index, Dow Jones Index, which measure the performance of a market or a segment.

Long and short positions : going long means buying shares expecting price rise; going short means borrowing shares to sell, hoping to buy back later at a lower price.

Dividends: a portion of a company's profit distributed to shareholders, usually expressed per share.

Trading suspension : a stock may be temporarily halted when a company experiences a significant event that could affect its price.

Limit up and limit down: the maximum daily price increase or decrease allowed for a stock.

Price‑change limits: daily caps on price movements to prevent excessive volatility.

Share buyback : a company repurchases its own shares, reducing the number of shares in circulation and often signaling confidence in its prospects.

Stock market investing includes direct stock purchases and indirect investment through funds. Direct investing requires the investor to trade shares themselves, while fund investing entrusts capital to a fund manager.

4. Markowitz Modern Portfolio Theory

A classic mathematical model for stock investment is Harry Markowitz’s Modern Portfolio Theory (MPT), proposed in 1952. The core of the theory is to optimize expected return and risk (variance) by diversifying the investment portfolio.

“Flourish” not only tells personal stories but also reflects the economic transformation of its era. By understanding basic stock market concepts, viewers can gain deeper insight into the plot and the period’s economic background.