Chapter 18 Chapter 18 "Catching Thieves and Kings" and Stock Selection

When history entered the 1980s, bonds and stocks had not appeared in our economy for more than 30 years.In recent years, social idle funds have begun to increase. How to guide the investment of this part of the funds and transform them into production and construction funds that benefit the public and self has become an urgent issue to be solved; on the other hand, due to the rapid development of economic construction, the economy Insufficient construction funds, relying solely on bank loans and financial investment has been difficult to meet the actual needs, so the call for establishing a securities system and developing a securities market is getting louder and louder. In November 1984, Shanghai Feilo Audio Company publicly issued stocks to individuals, which was the earliest tradable stock in the country. On December 19, 1990, the Shanghai Stock Exchange was established, which continued the historical fault of stock trading.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. Hundreds of millionaires have become millionaires by trading stocks in Shenzhen. Buying stocks worth thousands of yuan, the current market value of two to three hundred thousand yuan is too shy to tell people, for fear that people will say that he has no vision.So far, there are more than 500,000 stockholders in Shanghai, and more than 400,000 in Shenzhen.

After seeing these, I can't help but make my heart beat.The huge temptation has prompted more and more people to devote themselves to the stock market.However, when they enter this colorful world and see all kinds of stocks, they will naturally have such doubts.Which stock should we buy? Stocks, like everything else, have their pros and cons.As with buying commodities, anyone is willing to buy quality stocks for big gains.The quality of the stock mainly depends on the operating conditions of the issuing company.To judge the pros and cons of a stock, one must first judge the operating conditions of the joint-stock company.

The operating conditions of joint-stock companies can be divided into short-term and long-term.The good or bad of the long-term business situation determines whether the stock price will be on an upward trend or in a downward trend in a long period of time in the future; the quality of the recent business situation determines the current decline or rise of the stock price, so The long-term operating conditions of the joint-stock company determine the general trend of stock price changes, and the short-term operating conditions of the joint-stock company determine the small trend of stock price changes.In many cases, there is a big gap between the general trend and the small trend of stock changes, and sometimes they are even diametrically opposite.To judge the operating status of a joint-stock company, it is best to analyze its various financial statements month by month.But this is very difficult for investors, because the financial analysis of enterprises is very complicated, and it is difficult for stock investors to fully grasp it. Even if they can master the relevant knowledge, time will not allow it.Therefore, it is easiest and most effective for investors to adopt the proportional method when analyzing the operating conditions of joint-stock companies.

The main indicators to measure the short-term operating conditions of joint-stock enterprises are: current ratio.It is the ratio of a company's current assets to current liabilities, and the higher the ratio, the stronger its ability to repay debts. quick ratio.It is the ratio of quick assets to quick liabilities of an enterprise, which can more accurately measure the solvency of an enterprise. cash ratio.It refers to the ratio of cash and bank settlement account deposits to current assets. The higher the ratio, the lower the risk and the higher the degree of protection for creditors.

Accounts receivable turnover ratio.It is the ratio of the balance of the enterprise's loan or labor service receivable to the cumulative sales in a certain period of time.The more turnover times within a certain period of time, the better the return of the company's payment for goods. Inventory turnover.It is the ratio of the cost of sales of the enterprise to the average inventory. The higher the rate of sale, the faster the capital turnover of the enterprise. return on net worth.It is the ratio of the net profit after tax of the enterprise to the book value of the equity of the shareholders of the enterprise.The higher the indicator, the higher the operating income of the enterprise and the higher the dividend.Sales yield.It is the ratio of net profit after tax to total sales.The larger this index is, the more profitable the enterprise is.

Own funds ratio.It is the ratio of a business's own funds to its assets.The larger the ratio, the better. The main indicators to measure the long-term operating conditions of joint-stock enterprises are: the ratio of shareholders' equity to total assets.It is the ratio of shareholders' equity to total assets.The higher the ratio, the more capitalized the business. Debt to shareholder equity ratio.This is the ratio of a business' total liabilities to shareholders' equity.Contrary to most ratios, the smaller the ratio, the better. It shows that the business is operating steadily and shareholders' rights are less threatened.

The ratio of current assets to total assets.This is the ratio of a business' current assets to its total assets.The larger the ratio, the better. The ratio of fixed assets to total assets.This indicator is just the opposite of the previous indicator, the smaller the better. The ratio of long-term liabilities to total assets.This is the ratio of long-term liabilities to total assets of an enterprise, including bank loans with a maturity of more than one year, loans from other companies with a maturity of more than one year, and issuance of debts with a maturity of more than one year. The lower the degree, the more stable the capital structure.

Current assets to total liabilities ratio.This is the ratio of the company's current assets to the sum of bank loans, payables and advance receipts, bonds issued and other borrowed funds.The higher the ratio, the stronger the operating security. Fixed assets to shareholder equity ratio.This is the ratio of a business's fixed assets to shareholders' equity.The smaller the ratio, the safer the business operation and the stronger the long-term solvency. Fixed cost ratio.This is the ratio of fixed costs to total costs of the business.The smaller the ratio, the stronger the profitability of the business.

After stock investors have mastered these 16 indicators, they should analyze them in detail.If you find that all the indicators of a certain company are going downhill, you must not hold the company's stock for a long time; if you find that all the indicators of a certain company are developing in a good direction, you should not rush to buy the company's stock , but to compare and analyze the company's current and recent indicators with the same indicators of other companies in the same period to see if they are better than other companies.If it is really better than other companies, then you make up your mind to buy the company's stock.As long as you don't get bored with boring numbers, and conduct scientific analysis on the stocks of various companies, you will be able to find the stocks with the best quality, and buying and holding them will bring you huge benefits.This is like capturing the enemy commander in front of the two armies, "capture the thief and capture the king", the effect is the most accurate.

"Capture the thief and capture the king" is the sixth strategy in the third set of offensive strategies in "Thirty-Six Strategies": "Destroy its strength, seize its leader, and break its body. The dragon fights in the wild, and its way is poor. "It means destroying the main force of the enemy, and capturing its leader, can disintegrate its overall strength, just like a dragon is helpless when it leaves the sea.If you win a battle, you can gain a lot of profit, but if you are greedy for small gains and let the enemy commander go, you will only defeat the enemy, not a complete victory.Therefore, its leader must be knocked down. The enemy has no leader, and if they lose their pace, it is not terrible.

In 756 AD, Yin Ziqi, a rebel general of the Tang Dynasty, led hundreds of thousands of troops to besiege Suiyang City.Zhang Xun, the prefect of Suiyang, commanded the army and civilians defending the city, and repelled the rebels' attacks many times. However, the enemy soldiers were so numerous that they didn't care about the casualties of the siege, and they always stepped up their attacks. The situation was very critical. Yin Ziqi, the only way to win is to make the enemy leaderless. One day, the rebels came to attack the city again. While organizing the defense, Zhang Xun searched for Yin Ziqi among the rebels.However, the rebel army was like a wave, and they couldn't find it for a while.Zhang Xun was quick and wise, and ordered his men to stop shooting arrows down the city, and instead shot the rebels with stalks.The subordinates were puzzled, but they had no choice but to obey.When the rebels found out that Haozi poles were shot down from the city, they were very happy. They thought that Qiang Xun's arrows had been exhausted and they were using Haozi poles to scare people. Annunciation.In this way, Yin Ziqi was fully exposed.Zhang Xun saw it clearly from above, so he hurriedly called Nan Jiyun, a master archer, to point out the position, and ordered him to shoot the enemy commander.Nan Jiyun lived up to his heavy responsibility, and shot Yin Ziqi's left eye with an arrow, causing blood to flow profusely.Yin Ziqi was in unbearable pain, and hurriedly shouted "retreat", and the siege of Suiyang was resolved. It can be seen that the leader is the united core of an organization and a hub in collective action. If he can "capture the king", he can disrupt his organization, destroy his activity system, or at least cause changes within him.The so-called leader refers to a person who holds real power and has extensive influence. If there is no such condition, no matter how high his status is, it will be useless.What's the use of coming, like A Dou, the empress master of the Three Kingdoms who was so stupid that he only knew how to eat, drink and have fun?If you get it, you will lose money and add a burden. On the contrary, Zhuge Liang, who is under him, is in danger of the country and has always been the envy of the enemy country.As the saying goes, "Hit a snake and hit it seven inches", which means that when hitting a snake, you should strike at its vitals and kill it with one stick. If you miss the vitals, the snake will follow the stick and be bitten back.The same is true for buying stocks. If you hold high-quality stocks, you will undoubtedly benefit. If you are confused by various illusions and buy inferior stocks, the consequences will be disastrous.Please see: Bateman, the vice president of a financial institution in New York, bought low-quality stocks, and even if he lost his entire family property, he could not repay the losses in stock trading. In desperation, he jumped from the top floor of a 32-story building. An American named Kane went bankrupt due to improper purchase of stocks. In desperation, he shot and wounded the deputy general manager and broker of the securities company, and then died by himself. Kang, a Shanghai stockholder, suffered a loss of 6,000 yuan because he bought the shares of Shanghai Yanzhong Industrial Co., Ltd., which was in a downturn. He was short of breath and hanged himself to death. Just imagine, if they bought high-quality stocks, would these tragedies still happen?This shows how important it is to use "catch the thief and catch the king" in stock market trading. "Catch the thief and catch the king", buy high-quality stocks, and you should also pay attention to the choice of investment industry.Because different industries have their own production characteristics, in different periods, the development prospects of each industry are also different.For example, the automobile industry, the steel industry and the chemical industry are all basic industries, and the development of these industries is subject to the constraints of the economic cycle.When the economy is in recession, these industries will decline, and when the economy is booming, the pace of development of these industries will be accelerated.Therefore, if investors can choose to buy stocks of this type of industry at the beginning of an economic boom, they can usually get richer profits.For example, in the 1960s, the U.S. automobile manufacturing industry dominated the world, and cars made by companies such as Ford, Volkswagen, General Motors, and Chrysler were used almost everywhere in the world.Its stock price is also skyrocketing.At this time, some stock veterans secretly bought the stocks of the quietly rising Japanese auto industry.Because they predicted that due to the worldwide energy shortage, Japanese cars, which are characterized by fuel efficiency and durability, will soon pose a great threat to the U.S. auto industry.Sure enough, in 1977, there was an oil crisis in the world, and oil prices rose. American consumers' car consumption habits changed, and they preferred fuel-efficient cars. All have been further developed, and the stock price has risen, and investors who hold stocks in the Japanese auto industry will naturally make a fortune. In addition, industries such as the telecommunications industry, electric power industry, food industry and gas industry are closely related to the national economy and the people's livelihood, because they are not affected by the economic cycle and their development is stable.For another example, the electronics industry, computer industry, laser industry, and bioengineering industry are emerging industries, and their development momentum has been relatively strong in recent years.Futurists also call them "sunrise industries". New products emerge one after another, and they have a very broad market. They are also industries that foreign investors value.The characteristics of the industry are of great significance to the choice of investors, and people should pay enough attention to it. The stock market is changing rapidly, and the number of newly listed stocks is increasing day by day. As investors, they all hope to buy high-quality stocks and "catch the thief and catch the king".The content discussed in this section is compiled based on the experience and experience of experts from foreign countries and Hong Kong and Taiwan regions. I hope everyone will keep it in mind.