Often heard people say that China's stock transition, the so-called transition is what?

China's stock market from the second half of 2001, from 2,500 points stock index fell to 1,000 points in 2005, down 60%, more than ninety percent of the loss; 2006, the stock market from 1,000 points up to the highest 3200 points, the stock market rose nearly 220%. Five or six years the stock market ups and downs, big ups and downs. However, most of the old stockholders still did not make any money, and even from the unwinding are still far away. And the real money is new money, especially foreign investment institutions have made money. So why can't old stockholders make money? That's because stockholders lack the correct investment philosophy or traditional investment philosophy does not meet the reality of the Chinese stock market. How to invest correctly in the stock market? Using the theory of strategic transformation to guide the practice of stock investment may be a good idea.

First, the wrong investment philosophy

(a) the assumption that the efficient market theory is wrong

Now many people in China are addicted to technical analysis, what KDJ, RSI and MACD, etc., some people try to find the law, some people think that they are short-term masters, but a lot of companies do not have sufficient information, financial statements, two sets of accounts; which determines that the market is ineffective! The market is ineffective with the Western mature efficient market assumptions to set is not: because technical analysis must be built on the premise of the efficient market assumptions.

(B) short-term operation is not feasible

Short-term operation first from the effectiveness of technical analysis, and the Chinese stock market is immature, immature market can not be used to short-term operation. Secondly, even if you are a short-term master, you succeed ninety-nine times, failing once will lose all the fruits of your previous victory: the rate of decline is always greater than the rate of rise.

(C) long-term investment is ineffective

Because the development of enterprises is not smooth sailing, the strategic management of the enterprise is a series of strategic management activities, the enterprise may be successful in a number of strategic business activities, but can not guarantee that the enterprise's evergreen and sustainable development. For example, China's TCL, Kelong, Changhong once created a miracle, but now really in trouble.

(D) financial analysis is ineffective

Many Chinese companies have several sets of financial statements, and even they themselves can not figure out the real situation of the company. Only people with inside information can grasp the actual situation of the company, and this information asymmetry tends to mislead investors, while the current securities laws and intermediaries can not play an external governance and supervision of corporate management.

Second, the strategic transformation and stock investment

Since the Chinese stock market is not an efficient market, the traditional investment analysis methods and tools naturally exist one-sided and defective. So what are the ways to make up for the shortcomings? The theory of strategic transformation of enterprises may provide new ideas.

(I) The theory of strategic transformation

Enterprise strategy is the logic of decision-making on the direction, structural proportion and sequence of enterprise resource allocation. Based on the assumption of resource scarcity, the strategic management of the enterprise is a prerequisite for efficient enterprise resource allocation. If the strategic direction is wrong, any improvement in the operational efficiency of the enterprise is useless.

Strategic transformation is the change of an enterprise from one strategic logic to another. When a change in corporate strategy occurs, there is a significant change in the performance of the business, especially in the long-term performance of the company. This change provides direction for stock investing.

(2) The essence and principles of stock investment

Buying stocks is to buy the future of the enterprise, and the future of the enterprise is reflected in the strategic direction of the enterprise and its business performance changes, which is the essence of stock investment.

An important principle of stock investment is "high throw low absorption". To do "low absorption" must be in the enterprise from a strategic business to another strategic business status transition process to buy the enterprise stock. There are two scenarios here: first, the strategic business before the transition is growing well, but has reached the upper limit of growth, the market has been saturated or competition has become fierce. Profit growth is in a declining stage; the second is the company's pre-transition strategic business development is not good, at a competitive disadvantage or the industry is in recession. And these two situations are often the best time to buy stocks. Because the need for strategic transformation of the enterprise is often this time is the inflection point or low point of profit growth.

Three, strategic transformation and stock investment model

(a) stock investment principles

Based on the above analysis, I believe that stock investment first need to determine the risk-return principle of investment:

1, the principle of risk control: 20% of the risk, 80% of the return to consider investing in;

2, only to choose the stock of enterprises that are in the process of strategic transformation. The company's stocks.

(ii) Basic assumptions

1, market ineffectiveness. That is to say, technical and fundamental analysis is not sufficient, in a sense it is not beneficial and harmful;

2, despite the existence of speculation and market-making behavior, there are investment opportunities in the market;

3, stock investment returns are only reflected in price fluctuations. Dividends and distributions are not taken into account;

4. It is not possible to grasp the lowest and highest points, but it is possible to estimate the probability of a stock's second-lowest and second-highest points.

5. The sustainability of China's economic growth.

(C) stock investment logic strategy and steps

According to the above principles and basic assumptions, we buy and sell stocks as long as we determine the second-lowest and second-highest points of the broader market, and the second-lowest and second-highest points of individual stocks. The secondary highs imply risks that need to be considered for selling, and the secondary lows can be considered for buying. We can take the following steps to stock investment:

1, the probability of the second low and judgment

Can be combined with the macroeconomic situation and the trend of the market over the years to determine the statistical laws. According to my research, the Chinese stock market every year at least one wave of the market, and each wave lasts at least four months or more. In this way, we can know, as long as the market fell more than half a year or more, combined with the technical trend of the weekly K line to analyze, basically in the market at the second low point. This time is not without risk, and the probability of investment risk is 20%.

2, the probability and judgment of the stock's second low

For individual stocks, first of all, we must analyze the stock enterprises in the industry is in the growth period or cyclical recovery; and then combined with the strategic transformation of enterprises to analyze whether its new strategy is consistent with the logic of a reasonable strategy, whether the enterprise is only now in the period of strategic transformation of one of the important indicators of the company's leadership of the change of people; in addition to the combination of 60-minute line to determine the minimum buy point of the enterprise.

3, the judgment of the second high

(1), the probability and judgment of the second high

The judgment of the second high can be combined with the stock market to determine the rate of increase, when the entire stock market has accumulated more than 50% of the need to consider the risk problem; in addition, it can be combined with the international and domestic economic situation, the country's macroeconomic policy, in particular the national central credit policy to be analyzed, generally every time the central government to analyze, the central government to analyze, the central government to analyze, the central government to analyze, the central government to analyze, the central government to analyze. Credit policy to be analyzed, generally every time the central implementation of the checking of credit funds often means that the stock market trend of the disk, after all, most of China's institutional funds from the credit channel.

(2), the probability and judgment of the stock's second highest point

The judgment of the stock's second highest point can be combined with the implementation of corporate strategy, individual stock rise and technical analysis to judge.

Four, strategic transformation and the practice of stock investment

November 2005, I had recommended friends to buy shares of Sichuan Changhong. On that day, the market plunged, Sichuan Changhong fell 4% and then recovered to fall 2%, the price was 2.51 yuan. Subsequently, I published articles on my website to explain the concept of stock investment, which repeatedly mentioned that Sichuan Changhong will be the next two or three years of the big bulls. Some time ago, Sichuan Changhong has risen to 6 yuan, almost doubled. In fact, this is not counting, it is also 10 shares to send 7 shares, equal to the people who bought into it has actually netted almost twice the investment income.

Why choose the stock, is combined with according to the theory of strategic transformation and stock investment model to make a judgment: Zhao Yong on stage, Changhong from the color TV industry for decisive strategic transformation, from the APEX event of a major shortfall to the current 3C industrial chain to build a basic success: China Telecom, Microsoft, Shanda network and Changhong to form a strategic alliance: Wan Mingjian, as well as the former president of Founder's joining the core! Backbone shareholding, the realization of the product division system, the construction of the core business, strategic business and new business logical progression, the product division of the assessment of the elimination system. These reflect the correct strategic logic.

First of all, Changhong is in the transition phase of the transition, the problem of the original strategy of the enterprise will cause the enterprise's share price to fall sharply, that is to say, it will fall to the lowest point, so that you don't have any risk; the second point is that the new strategy is very good, but the new strategy has not yet become a new point of growth in profits.