Chapter 17 Chapter 17 "Throwing bricks to attract jade" and the opportunity cost of stocks

There is a Chinese folk saying that goes, "I can't bear to let my child be tied to a wolf".It sounds crude, but it tells people a very profound truth: If you do something without paying a certain cost in advance, then it is impossible to receive the corresponding benefits.This is true of everything, and the ever-changing and unpredictable stock industry is certainly no exception. In the dictionary of economics, there is such a term called "opportunity cost", which refers to the value of producing another product that is given up when a certain resource is used to produce a certain product, or the opportunity cost It refers to another income that is given up when a certain career is used to obtain a certain income.For example, a piece of land can grow wheat and soybeans.The yield of soybeans forgone to grow wheat becomes the opportunity cost of producing wheat.The concept of opportunity cost can be used to compare the economic benefits that can be achieved by different uses of certain assets.

So, what is the opportunity cost of investing in stocks?The opportunity cost of stock trading refers to the income that may be brought about by other investment methods that are given up by using a certain amount of funds to buy stocks.We all know that in the way of personal investment of Chinese residents, in addition to buying stocks, there are various forms such as savings, insurance, treasury bills, government bonds and corporate bonds. They are all in front of you just like stock investment. Investment opportunities for you to choose freely.When you choose the investment opportunity of buying and selling stocks, you also give up many other investment opportunities.The investment income that other investment opportunities may bring is the opportunity cost of your stock investment.

Opportunity cost is a very important decision-making basis for stock investors.Generally, when considering whether stock investment is cost-effective, you always look at how much profit stock investment brings to you, and ignore the possible benefits of other investment opportunities given up by investing in stocks.The judgment obtained is likely to be wrong, or even a conclusion that is contrary to the objective.For example, if you buy a stock with 100 yuan and sell it at a price of 120 yuan two years later, or the dividend you get in two years is 20 yuan, you can get a profit of 20 yuan. In this case, it is a loss. Still earned?If the opportunity cost is not considered, it is undoubtedly a profit. But if the opportunity cost factor is taken into account, whether it is a loss or a profit depends on the cost.If the opportunity cost of stock investment is greater than the profit of stock investment, you will actually lose money.For example, the annual interest rate of a two-year financial bond is 仏, and you can get 4 yuan in interest after two years, and you actually lost 4 yuan.If the opportunity cost of stock investment is less than the stock investment income, it can be regarded as making money.For example, the annual interest rate of a two-year financial bond is 9%, and you can get an interest of 18 yuan after two years.In this case, you can say "I made 2 yuan." It can be seen that if the opportunity cost is not considered, there is often the possibility of complacency when the money has already been lost-when investors buy stocks, they must calculate the value of the stock. The opportunity cost of investing.

If stock investors want to calculate the opportunity cost more accurately, they must fully understand the investment methods available to individuals in my country under the current conditions and the calculation methods of their returns.There are: Bank savings deposits and methods of calculating interest; bonds and methods of calculating interest; insurance, etc. In order to calculate the opportunity cost of stock investment more accurately, stock investors must pay special attention to the changes in the interest rates of various investment methods on a daily basis, and record the current interest rates of savings deposits, treasury bills, and various bonds announced in newspapers and broadcasts, and use them to calculate the opportunity cost of stock investment. Use when making decisions.

Of course, if investors are asked to choose between stock investment and other investment opportunities, most of them will choose the former.Because holding stocks can make amazing returns in a short period of time. If you can buy a lot when the stock price is low and it is expected to rise, and then sell it when the price is high; Throw a large amount when the price will fall, and then buy when the price is low, and you will definitely get unexpected returns.Compared with the profits of stock investment, the profits of general investment methods are undoubtedly insignificant.Therefore, the vast majority of investors will throw out the "brick" of general investment without hesitation, and introduce the "jade" of stock investment. Once you decide to invest in the stock market, there are still many "bricks" you need to throw out .Because the stock market is complicated and various opportunities coexist.You have to constantly choose between secondary interests and primary interests, sometimes when you have secured the primary interest.You also have to reluctantly give up some secondary benefits in order to keep the "jade" in your hands.

Jin, a stock investor in Shenzhen, used almost all of his savings of 50,000 yuan to buy stocks, nearly half of which he repurchased from his friend Zhai.A week after he bought the stock, the stock price started to rise.It increases at a rate of 10% per day at first.The value of the stock in Jin's hands is already more than 10 times the face value.Calculated in this way, this stock has earned Jin a profit of 200,000 yuan, which is not the case in any industry or business. Unexpectedly, a wise man will make a mistake if he thinks about it.The stocks that Jin bought from Zhai have not been transferred, and the dividends can only be distributed to Zhai's name.When the two contacted, Zhai only agreed to convert the stock to Jin at the price a week ago, which caused Jin to lose 10,000 yuan.However, Kim suppressed his anger and agreed.Because he knows that an ID card must be shown for stock transfer.If Zhai delays one or two Xing Si with excuses such as business trips, his losses will be calculated in tens of thousands of yuan.Although Jin suffered a lot of financial losses, this allowed him to keep the main interests of the remaining more than 100,000 yuan.This is also an example of "throwing bricks to attract jade".But there have been changes, which can be described as "throwing bricks to protect jade."

In "Thirty-Six Strategies", the third set of attack strategies and the fifth strategy wrote: "Use similar things to lure them, but also to attack them." It means to use very similar things to confuse the enemy, and when the enemy makes a wrong judgment or When the fake is real, attack. There is a saying in the Book of Songs: "Throw me a peach, and repay it with Qiongyao, and the bandit repays it, and it will always be good." This is an emotional expression of courtesy and reciprocity between people, and there is no malice.But if it is applied to a strategy of competing interests, it is exactly the opposite. This sentence should be changed to "Throw a peach to the other, and you must repay me with Qiongyao. If you don't repay, take it. You can't get it with words, but you can take it with martial arts." .This is the most practical explanation of "throwing bricks to attract jade", the method is fishing, and the purpose is to use small things to make big things easy. "Throwing bricks" is to take advantage of the weakness of some people who are greedy for petty gains, first give a little sweetness, tempt people to be fooled, and slowly attract "jade".It's like fishing a big fish for a spring, first using small profits to lure the enemy into being fooled.It is a clever plan to cater to the enemy's subjective imagination with something that looks very real.

We have already introduced to you the example of Sun Bin's "surrounding Wei and saving Zhao" battle. Ten years after that battle, Sun Bin directed another battle of "throwing bricks and silver jade". This time he not only defeated the enemy, but also set his own enemy Pang Juan died. In 343 BC, King Wei Hui worshiped Pang Qian as a general and led his army to attack South Korea. South Korea was weak and asked for help from Qi.King Wei of Qi sent 50,000 troops, still taking Tian Ji as the general and Sun Bin as the army to rescue South Korea.This time Sun Bin repeated his old trick and led his army to attack Liang, the capital of Wei.

When Pang Juan learned that his country was in emergency, he hurriedly led his army back to help.Seeing that the enemy had fallen for the trap, Sun Bin took advantage of the situation and adopted the method of reducing stoves. On the first day, he ordered his men to build 100,000 stoves, on the second day the number was reduced to 50,000, and on the third day only 30,000 piles were built.Pang Juan chased after the Qi army for three days, and he was very happy after counting the stoves of the Qi army. He thought that the Qi army was timid, and half of the 100,000 troops escaped in only three days, and he felt underestimating the enemy.He ordered the infantry to follow behind, and personally led the light cavalry and elite soldiers to chase after him.

Sun Bin carefully calculated the speed of the Wei army, and said to Tian Ji: "The enemy army will arrive at Maling Road about tonight. The road here is narrow and there are many precipices and dangerous passes on both sides. Our army just set up an ambush." On the bark of a big tree, there was an inscription: "Pang Juan died under this tree" in seven characters, and 10,000 soldiers who were good at shooting in the army were ordered to lie in ambush, and when they saw the fire, they shot together. That night, Wei Jun arrived at Maling Road. Seeing the strange tree, Pang Juan ordered his men to light the torches. When the army saw the flames, all arrows were fired, and Pang Juan died under the random arrows. After the commander died, the Wei army scattered like birds and beasts, and the Qi army won another brilliant victory.

The purpose of "throwing bricks to attract jade" in military affairs is to better attack the enemy.Applying it to stock investment is to obtain the maximum benefit. This is true for individual stock investors, but it is even more important for those joint-stock companies that seem to have deep pockets. The so-called joint-stock company refers to an enterprise that gathers scattered capital to carry out business activities through the issuance of stocks. A joint-stock partnership with the characteristics of two joint-stock companies. The prosperity of a joint-stock company comes from internal management and innovation on the one hand, and external support on the other.How to manage and innovate internally, the person in charge of the company should have a well-thought-out plan, and at the same time, be good at observing the external situation.Because in the process of business operation, external influences sometimes cause the company to be in trouble and: on the verge of bankruptcy.In order to avoid this from happening, joint-stock companies must try their best to expand their business. In order to expand business operations, joint-stock companies generally adopt two methods: one is to issue corporate bonds and new shares; the other is to apply for loans from banks.Companies generally do both.These methods can better cope with the changes in various aspects of the outside world and enable the business to expand and develop.However, as a decision-maker of an enterprise, it is very difficult to get a bank loan. This is mainly because the bank loan is not easy to come by, not proactive and inflexible. Therefore, entrepreneurs often use the method of issuing bonds and new shares to develop their own enterprises. . Issuing bonds and new shares involves a lot of knowledge, and the method of issuance is related to many factors such as issuance costs, sales prospects, debt repayment burden, company business prospects, market securities prices, and approval possibilities. Before the issuance of bonds and new shares, there is often a lot of fanfare.Only by paying a certain amount of capital can the expected effect be achieved, which requires the strategy of "throwing bricks to attract jade", please see the following example. There is a Sino-foreign joint venture company in Nanjing. In order to issue corporate bonds in Nanjing, after considering various countermeasures, they have developed a different method of issuing bonds from other companies.First of all, they used my country's first self-designed, self-constructed Nanjing Yangtze River Bridge as a propaganda base, and held a colorful lantern exhibition on the bridge for several days, which attracted Nanjing citizens and news organizations to flock in droves, creating a very good society for a while. Immediately afterwards, the company recruited a wide range of talents and attracted people from all walks of life to compete with the company; after these tasks were done, they began to issue corporate bonds to the society.It is conceivable that such an influential, appealing and attractive corporate bond cannot be favored by others?Can the prospect of market sales be bad? Stocks, bonds, joint-stock companies, these concepts are still relatively unfamiliar to us Chinese.Our Chinese entrepreneurs are often inexperienced in operating the stock industry.In view of this, let us give another example of foreigners "throwing bricks to attract jade" in stocks for your reference, and hope that our young Chinese entrepreneurs can get some inspiration from it. In the early 18th century, a Scot named John Shaw founded the Mississippi Company to develop French colonies on the Mississippi River basin on the North American continent.In order to raise development funds, when the company was established, it planned to issue 100 million francs of stock, 500 francs per share, 203 shares in total.Initially, the public's reaction to the company's stock was lukewarm and there was no interest because people lacked knowledge of the company and were unwilling to take risks.In this way, Mississippi's stock got off to a bad start, and the stock price fell to 300 francs a share.This means a huge loss of the company's property. In order to recover the loss and get out of the predicament, John and Xiao resorted to all their solutions and made great sacrifices.He publicly announced that half a year later his company would buy the shares it would sell at a price of 500 francs to stimulate the investing public.Sure enough, the company's stock price rose and the company's finances improved, but John Shaw did not stop there.Then, he announced that he would lend the government 1.5 billion francs to repay the national debt. At the same time, he also decided to purchase the company's shares in the form of installment payments.This trick was very effective, and the company's stock price rose sharply in a short period of time, reaching 18,000 francs at the highest point.John Shaw adopted the strategy of "throwing bricks to attract jade", which made the company's stock issuance a great success! Readers, if you are planning to establish a joint-stock company, don’t forget to use this tactic when issuing bonds and stocks——“throwing bricks to attract jade”.