Chapter 2 Chapter 2 "Besieging Wei and Rescuing Zhao" and Diversification of Stocks

Readers are invited to take a look at the following report first: A stockholder hanged himself at home on the afternoon of May 12th because he could not bear the economic loss caused by the stock price drop. Kang Mou, 41, who lives in the Lujiazui area of ​​Pudong, Shanghai, is an employee of a certain company.As the "stock fever" heats up, he and his younger brother bought 107 shares of Shanghai Yanzhong Industrial at a price of 293*35 yuan per share in mid-April, including 73 shares for himself and 34 shares for his younger brother.Afterwards, the shares of Yanzhong Industrial Co., Ltd. continued to fall, falling to about 200 yuan per share. On April 29, Kang and his younger brother discussed and sold the 107 Yanzhong Industrial shares they bought not long ago at a price of 205 yuan per share. The two brothers lost a total of 9453.45 yuan, and Kang himself lost 6449.55 yuan. Yuan.Since then, Kang has been depressed all day long and often sighs.Although family members and relatives and friends tried to persuade him with kind words, it was still of no avail.Finally find short-sightedness.

This article titled "A Shareholder in Shanghai Hanged Himself at Thousands of Losses" was published in the "Liberation Daily" on May 15, 1992. It has only two hundred words and tells people a very simple truth: the stock market is high. It's too cold! Starting from the psychology of stock investors, of course everyone wants to make money, but isn't everyone able to do so through stock trading?There is an interesting saying popular in foreign stock markets: Seven out of ten investors lose money, two make neither loss nor profit, and only one makes money.So why is everyone still rushing to buy and sell in the stock market?This is because the seven people who lost money were unwilling to reconcile and wanted to get back the lost capital. The other two people had been busy for a long time without losing or making money, and of course they had to continue to work hard; The momentum is unabated.Although this statement is a bit too much, it is not unreasonable. It tells people that buying and selling securities is not so easy to make money, and the probability of losing money is quite high.Because any investment activity has certain risks, and the risk of stock investment is even greater.The risks in all stocks are real.No matter how brilliant your stock investment record is in the past, how good the prospects you envision, and how superb your investment skills are, you should understand the seriousness of the risks you face, and be fully prepared psychologically and think of countermeasures to deal with them. Otherwise you should not be a stock investor.

Securities investment, especially stock investment, is a highly complex and highly risky activity, which can bring people huge profits and bankrupt people.As an investor, one must fully understand and master the risk-dependent returns of securities investment, try to avoid investment risks, and obtain the greatest investment returns. There are many sources of stock investment risks. Theoretically, there are three main sources: (1) Market risk .It is caused by the fluctuation of market price, because stock trading is carried out according to its market price, therefore, the fluctuation of stock market price may bring losses or gains to investors. (2) Enterprise risk.Enterprise risk refers to the risks brought by the poor management of the enterprise, the enterprise is in a dangerous situation, the business activities of the enterprise are severely restricted, and the enterprise has the possibility of bankruptcy, etc.Because, if the company's operating conditions are not good, the company's ability to pay dividends will be reduced, and the investment value of the shares issued by the company will also decrease. (3) Purchasing power risk.It means that due to the impact of inflation, the actual purchasing power of investors’ regular fixed income will decline. The adverse impact of inflation on stock prices has two aspects: on the one hand, it affects the company’s profits; on the other hand, the growth rate of dividends often cannot keep up with The rising speed of commodity prices, so the price of securities will eventually fall, thus affecting the stability of the securities market.

Any form of investment is risky.As an investor, you should choose your own investment method carefully and try to obtain a higher return on investment.Especially for our stock investors in China, most of them are workers, farmers, teachers, employees, etc. who have fixed positions. The development of the market, research on the trend of the market, and investment often have a lot of randomness and blindness.Moreover, most of the working-class investors use their own savings to invest in securities. With limited funds, lack of strength and solid financial expertise, they are very easy to follow the wind and lose their hard-earned savings in a daze. net.

Since the risks in stock investment are unavoidable, what is the best way to minimize the risks in transactions? Let's take a simple example: You and your friend each have 100,000 yuan in cash, and both want to use this money for stock trading.The difference is: you bought the stocks of six companies with all the money, but your friend used the 100,000 yuan to buy the stocks of companies A, B, and C.Unfortunately, a month later, due to the poor management of the company, the price of the shares issued by it fell rapidly. Obviously, since you and your friends bought the shares of this company, you both suffered financially. loss.So, who has the greater loss, you or your friend?

The answer is also obvious: of course you.Because you put all your eggs in one basket and bought the stock of Company A with 100,000 yuan, and your friend bought A stock for only a fraction of yours, so the loss is naturally much smaller than yours.Moreover, since you only hold one stock of the company in your hand, your only hope to recover your losses lies in the improvement of company A's operating conditions and stock price recovery, and this is independent of your will. In this way, your fate In the hands of others, you become a very passive stock investor, anxious and unable to exert energy.But your friend is different. In addition to my company's stock, he also holds two stocks, B and C. As long as the prices of these two stocks are stable, his losses will be greatly alleviated. If the prices of the two stocks of C are optimistic, it is entirely possible for him to make up for his losses in the stocks from these two stocks.Such a comparison, isn't it clear at a glance which of the two methods is better than buying one stock or buying several stocks at the same time!Just imagine, if the unfortunate Kang mentioned at the beginning of this section, if he didn't spend all his money to buy only one kind of Yanzhong Industrial stock, but bought a few more, then his loss is undoubtedly would be much smaller, and his end less tragic.

It can be seen that stock diversification is indeed a panacea for reducing risks.In fact, this method, we can also find its shadow in "Thirty-Six Strategies", which is the second strategy in "Victory Strategies": encircle Wei and save Zhao. This strategy is based on a famous battle in ancient China, the Battle of Guiling, which also took place in the Warring States Period. In 353 B.C., King Hui of Wei sent his general Pang Juan to attack the State of Zhao with heavy troops. Fight hard.The two sides fought fiercely under the city of Handan for more than a year, and both sides were injured, but it was still hard to tell the winner. Zhao Chenghou, the king of Zhao State, sent envoys to Qi State to ask for help, and he was willing to give Zhongshan from Wei State to Qi State. In order to thank the state, King Wei of Qi worshiped Tian Ji as a general and Sun Bin as a military adviser, and led an army of 80,000 to rescue Zhao.

Sun Bin is a descendant of Sun Wu, a great military strategist in the late Spring and Autumn Period. He once worshiped Guiguzi as his teacher to learn the art of war. gouged out his knee) and became disabled. Later, Sun Bin pretended to be crazy and fled to Qi State, where he was reused by King Qi.This time leading troops to aid Zhao, the main general Tian Ji advocated sending troops straight to Handan, but Sun Bin had a different opinion. He believed: "To untie the siege of Zhao is like untying a messy and clueless knot. Entering Handan is like hitting the knot with a heavy fist. It may not be effective. If you want to resolve a fierce battle, you can't directly participate in the fight, but avoid the truth, so as to hit the vital point and resolve the dispute. At present, the Wei State Bingwu has besieged Handan for more than a year. It may be too late for us to rescue Handan now. But now that the elite of the Wei army has come out, the domestic forces must be very empty. Our army should march to Wei and storm its empty capital Daliang , Pang Juan must return to the army to rescue, we will lay an ambush halfway, Dingtu will defeat the Wei army, and the siege of Zhao will naturally be resolved."

Tian Ji adopted Sun Bin's strategy. He ordered the Qi army to feintly attack Daliang, the capital of Wei, while laying heavy troops in ambush to wait for Pang Juan beside Guiling (northeast of Heze County, Shandong Province), which the Wei army must pass through.Pang Juan was stepping up his siege of Handan, when he suddenly got news that Daliang, the capital of the country, was in urgent need, so he withdrew his troops from Handan and returned home.Due to the urgency of the situation, the Wei army traveled long distances day and night, with no men and no horses. When they passed by Guiling, the Qi army who had already ambushed and waited for work, defeated the Wei army.Pang Juan lost more than 20,000 men and horses, and fled back to Daliang with his remnant soldiers.This is the origin of the Battle of Guiling - Surrounding Wei and Rescuing Zhao.

Regarding this strategy, the book "Thirty-six Strategies" says: "It is better to divide the enemy than to share the enemy, and the enemy's yang is not as good as the enemy's yin." It means: "It is more difficult to attack a concentrated enemy army than to attack a scattered and isolated enemy army. It is better to attack later than to attack in a hurry. The chances of victory are high." Managing an army is like controlling a flood. For a fierce enemy, we must avoid its sharp edge and use the method of dividing and diverting the flow to defeat them one by one.Using the leader of this strategy, we can get inspiration from the reasons why the Qi army won the Battle of Guiling: first, the Qi army chose to attack at a favorable time when Wei and Zhao were exhausted; second, they chose a place where the enemy army was empty. To attack, to lure the enemy into exhaustion, and to fall into a passive situation of being beaten, just as the saying goes, what he attacks must be saved, and those who annihilate what he saves must retreat when he attacks, and whoever is annihilated will defeat a powerful enemy.

It can be seen that the application of encircling Wei and saving Zhao in military affairs is a clever strategy to save allies and destroy the enemy's vital forces. As mentioned above, if this strategy is applied to stock trading, it is also a dose of relief in critical moments. Panacea, especially for our Chinese investors. China's stock market is currently in the ascendant. In November 1984, Shanghai Feilo Audio Company publicly issued shares to individuals, which was the earliest tradable stock in the country. In April 1987, Shenzhen Development Bank also publicly offered shares to the public. On December 19, 1990, the Shanghai Stock Exchange was established, and then the Shenzhen Stock Exchange was officially opened for business.According to statistics, more than half of the 20,000 to 30,000 stockholders in Shanghai and Shenzhen who first entered the sea made fortunes to varying degrees. There is a Yang Wanwan in Shanghai who initially used tens of thousands of yuan to trade treasury bills and stocks. Millions of assets, hired 34 people to transcribe, analyze the market table, professionally engaged in stock trading.A young man in Shenzhen gave all he had at the beginning and exchanged 32,000 yuan into stocks. A few years later, he exchanged stocks for renminbi and it became 1.5 million yuan.At present, there are more than 500,000 stockholders in Shanghai, and more than 400,000 stockholders in Shenzhen.With so many people rushing to buy stocks, it has to give people a phenomenon that whoever buys stocks will make money. In fact, as mentioned earlier, stock trading is extremely risky.Taking Shenzhen as an example, it experienced a 10-month bear market last year (that is, the stock market has a bleak outlook, the market is falling, the transaction is dull, and the movement is slow). The stock market fell by an average of 56%. Eighty-nine have lost money.There was a man who saw others making a fortune by speculating in stocks. He invested thousands of yuan in the stock market that he planned to buy jewelry for his wife, but he lost nearly half of the loss. Seeing the stock price falling every day, the man burst into tears in public.How can this situation be shocking! In order to prevent such tragedies from happening again and again, investors in the stock market must keep in mind that they must never invest all their funds in one stock!In jargon, stock diversification.The simplest method is to buy many different kinds of stocks to form a stock group.This method has been learned to use by stock investors a long time ago. Although they can't tell much about the principle, they know that it can reduce risk, especially when the stock group is composed of about 20 different kinds of stocks. will reduce the total risk by 95%.Therefore, even for small shareholders, diversification with a small number of different types of stocks can benefit a lot and reduce risks. In addition, the time and place to buy stocks cannot be fixed at one time-place, which can reduce the risk of falling stocks. risk. This is exactly: the stock market is extremely cold at the heights, besiege Wei and save Zhao Baoping.