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Investment Classics 55 _Part_

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					Investment Classics 55 (Part)
"Anti- traditional marketing"

Charlie Zhanrui Te is also a good person turn crises into opportunities. Turning to him,
I think of something interesting. I have come back with a U.S. investment advisor,
founder dinner, he was chatting about some ideas, I suddenly asked: "You
did not read Charles Zhan Ruite read" anti-traditional marketing,
"?" He said with a smile: "I have worked his DLJ
company." I suddenly realized, the returnees companies like arrangement
in the corridor of some old stock and art collections, and DLJ environment within the
same company.
Chinese translation of the title, a subtitle attached "master contrarian
business secret", should be summarized Zhan Ruite business philosophy.
Investment market for the first time that "reverse thinking" who
is an American concept of Humphrey B · Bell, his "thinking outside of the
art" by Hainan Publishing House, the central idea is: "When
everyone would like to have the same may everyone wrong. " Bell,
"the         opposite     theory"        in     the    more      accurate:
"It's just a way of thinking, we should not attach too much
importance to it. In comparison, it is more important is a correct method is widely
expected, but not a prediction system. In short, it is a thinking tool, not a crystal ball.
It forces us to thoroughly consider the given question, as they say: If you do not bring
the issue to think through things given a statement of your ideas. "
This means that, in the application of "the opposite theory", we
must note that the timing is difficult to grasp. "Bull without saying that
top" and "bear market bottom is not made" and
saying all the shows even if the stock price over-or underestimate the absolute, we can
not easily transition to take place immediately. More often, we know that trend will
change, but do not know when to turn.
Zhan Ruite the "contrarian" investors, self-categorization is:
"and those who know how to seize the trend and lead the trend of the new
peak of people on the contrary, I seem to always be in the worst time to reach their
peak" . In 1960, Zhan Ruite and later was the President of Bulten NYSE
Nathan, etc. 2 Harvard Business School students, co- founder of DLJ Securities
Corporation, the company's capital was 10 million, while Wall Street
before their respective work for less than 3 years. The early 60s, retail accounted for
70% of NYSE volume, most securities companies will continue to focus on them,
DLJ is that institutional investors will eventually prevail, so buck services for
institutional investors, such as writing for small growth companies do in-depth
research reports, won a lot of profit. 10 years later, DLJ became the first publicly
listed in NYSE broker, Merrill Lynch, etc., followed, so DLJ spared even the entire
securities industry in 1973 and 1974 the industry disaster. 1985, DLJ was sold to the
benefit all life. In 1990, all profits life crisis, Zhan Ruite to reappear, so the company
out of a common system for all policy holders, to listed companies, into the black.
Publicly traded companies to obtain a large number of permanent capital are the big
thing, but, Zhan Ruite also pointed out that a major disadvantage, is likely to expose
the company's profitability, while confidentiality is often a source of profit
the company to success. DLJ issued in 1970 listed the book for the first time revealed
the high profitability of the company - sales, gross margin 50%, return on equity even
higher. From that moment, there are dozens of securities firms compete with DLJ,
institutional investors want to grab a slice of the services, which allow DLJ ended 10
years of success.

"Financial Psychology - to grasp the true meaning of market
volatility"
"Bubble secret - the basic principles of early financial frenzy"
"Rabble"

U.S. "Business Week" selection of the 2004 10 Best Business
Books, there are three books related to social psychology, and financial behavior.
"New Yorker" magazine written by staff writers Surovic
"wisdom of the masses," even though that decision by a team,
more often than not the smartest choice to make a better analysis of why the masses
but will also be a wrong decision time, the best example is the speculative bubble.
"Or the city of origin" is still described in the late
90's in the stock market frenzy is how to cause a huge bubble. The
"choice of contradictions" that even before the consumer to
choose the most careful consideration, finally may be the most scientific and the
views of small effect, for example, follow the advice of friends.
I'm here to recommend a book written by Norwegian 拉 斯 特 维 德
"Financial Psychology - to grasp the true meaning of market
volatility," This is a textbook, written in fun and very systematic and
comprehensive, is a rare financial psychology Introduction to science. In this book the
last, Tweed admitted that it is difficult to find a "become a millionaire
through the stock," the recipe, but at least we have to determine what
things we should not do, we can call it " ruin ", which is
composed of the following 20 errors: 1) Select a number of professional small-scale
market, which is always speculation; 2) will set up their own knowledge of the market
based on the information Oden, Oden, including those rumors, rumors and
acquaintances, or the recommendations of taxi drivers; 3) attaches great importance to
their love to hear; 4) misinterpretation of information, to enable them to adapt to you
by it; 5) When the neighbors and everyone seems to buy when you buy When the
market has collapsed only when you sell; 6) Nobody likes to wait outside in the
market, especially short. For this reason, most of the time in, you think that stock will
rise; 7) Do you believe I received a lot of fragmented information, but never complete
information; 8) According to the price of occasional changes (on the computer screen
or the stock quotes on) to take action, rather than a comprehensive analysis of
graphics; 9) never sure any form of risk strategy, not to seize the great opportunity; 10)
in just one week out of all of the long-term investment, because profits have been ... ...;
11) ... ... If the loss of short-term investments on hold ... ...; 12) ... ... and is called
"long-term investment"; 13) or when things got his wish, use
the inverted pyramid trading method. At this point, when the trend down, you keep
buying the stock to "cost sharing"; 14) whether the market is in
a trend of cities and transaction- intensive area or turning city, they all use the same
operating strategy; 15) when the market and you against time, constantly changing
stop-loss value, because you always dream of doing the reverse; 16) more to listen to
the views of others, rather than facts; 17) The use of market prices, rather than the
fundamental value as your criterion; 18) the use of hedging to conceal losses, rather
than ton output capacity; 19) for each investment in isolation; 20) have forgotten that
the world's most difficult markets.
There is a "bubble of the secret - get up early the basic principles of
financial mania," the booklet is very special, it is a history of three famous
bubbles (Dutch tulip mania, the Mississippi bubble, and the South Sea Bubble) and
generally view things right. American scholar Bidejiabo be based on market price data,
that "extraordinary public fanaticism and mass mania," said
Mackey, author of unreliable, expensive and extremely rare bulb was the rapid decline
in prices, reflects the tulip bulbs in the normal market price, and do not interpret it as
this is evidence of market irrationality. In other words, expensive tulip only
determined by its rarity, with such a large supply of bulbs, the price will naturally
drop. Even contemporary new flower bulb varieties may still be priceless, but the
developers will large-scale breeding of new varieties, market and lower prices will
follow. If a small amount of the original 1987 price of one million guilders lily bulbs
(based on consumer prices in 1999, equivalent to 693,000 U.S. dollars), which is
equivalent to a fine house, a car, a suit, several tons of wheat , rye, butter, etc..
However, tissue growth as people use technology, these bulbs in 10 years has been
able to breed, price "crash" will naturally enough.
As for the "Mississippi bubble is a large-scale manipulation of the
activities of printing paper money and government debt by issuing shares to trading
activities; the South Sea Bubble is an issue of shares to repay debt with the activities,
although the reasons for not so well. These two cases are by senior government
officials to initiate and assist in the spectacular scenes of the macro-economic
conspiracy, Ta Men of the British and French support of all political institutions,
"that is, the two bubble Zhibu Guo is the failure of financial innovation and
the two fiscal reforms, while be classified as crazy psychological campaign group.
This as Russia's privatization campaign organized by the Chubais, we can
say that it is a failure, but not a bubble.
Garber reminds us, not the fundamentals of the history of these events, with the
bubble theory to explain the course very easy, but because the bubble theory is a
tautology, which can never be refuted, meaning is also insignificant.
However, the mass psychology of the investment market must be one of the direction.
As early as more than a century ago in 1895, Le Pen in France, wrote a book called
"rabble", the book is still a social psychology of one of the most
influential works. Some of his argument also gives us a knowing smile today:
"The masses accumulate together and not only foolish the wisdom born. If
'the world' refers to the group, did not look like it is often said,
as Voltaire smarter than the whole world, down might say that V Fourtet smarter than
the whole world. "
"He may be an isolated educated individuals, but in groups, he has become
a barbarian - that is, a behavior dominated by the instinct of animals."
"French Revolution, the National Association of the members, if separately,
are open-minded citizens of modest behavior. But when they form a group, did not
hesitate to take orders from the most barbaric proposal to send innocent people on the
scaffold, and an anti- his own interests, to give up their inalienable rights, in their own
innocent people also. "
"Group will not make any advance planning. They can be the most
contradictory situation has inspired state, but they are always subject to the current
stimulus factors. They are like the storm rolled up the leaves, flying toward each
direction, then Also dropped to the ground. "

"Risk Rule"
"With man"
"Silver Age history"

Mainland few book behavioral finance to build the majority. I prefer two books, one is
the "risk rule", is a former Goldman Sachs risk expert Ron
Burton wave and the "Economist" editor Andrew Freeman
co-written. The reason I present behavioral finance among Linong Mainland
dissatisfied with work, is because most of them written in dry and tasteless, totally
uninteresting. In the investment or finance in school, there are what the study of
behavioral finance is more interesting than what? Of course, the "risk
rule" is written may not be very interesting, but it is rich and vibrant, but
also practical. Leighton wave and Freeman in the book, using mainly Upside (possible
to make money), Downside (lose money possible) and the core concepts of Regret,
the simulated scenarios to measure the specific risk and, more importantly, the
algorithms and ideas are quite of simple and routine. Regret is a well known as the
psychological sense, it reflects in the event of bad things arising from frustration or
despair, for example, you used to walk on the path to go home every day, one day, you
whim, choose another path along the home, the result had an accident, then you will
definitely regret not cope. But if you go in before the road every day of the accident
out of it? In comparison, because the change in the habits that produced some of the
additional frustration is Regret.
Difficult to know, line is more difficult. "Risk rule" of the
postscript one of the authors cited the end of 1994 made a very wrong
decision- making, brought him great Regret. His opposition of his family, sold the
UK's house because he lived in New York, houses for rent money, not
enough to make up for installments to be paid, and the slow growth of the British
economy, the late '80s real estate bubble has burst, and so on. The
decision- making in the first half of 1996 are right, but then the price suddenly shot up
the place, the end of 1997, an original value of 10 million homes have risen to 170
thousand U.S. dollars. If he sold it before then, earnings will be 4 times the original.
So he self- examination that he had never considered the potential Upside (income), is
calculated Upside (loss), and the result is the potential loss of revenue is 7 times.
The problem is, this was written in the year 2000, if prices in the UK shot up by one
after another, the writer feel? Why did he not chase it the end of 1997? In other words,
he should not be overly concerned about selling the wrong room, but go buy a house.
Alas, it is a huge Regret.
Than the "risk rule" even more interesting is that
"man proposes," I have in the "cattle of
Revelation" (January 2005 "Value&amp ;quot; cover story) were
highlighted in it. This book is really very, very fun, the author has completely Tale Bo
wording of the novel, especially the postscript written reminiscent of Milan Kundera.
Maybe, "man proposes," almost all points of view are on my
appetite, so it was like I mile. Some readers may not like the Tale Bo, slightly cynical
tone and wording, but the book reveals behavioral finance such research is a major
investment in the future market directions.
Originally, I would            like to      recommend Peter Drucker's
"bystander"                (Hainan           Publishing          House),
"Mingciboge of Management" (China Labor and Social
Security Publishing House) and Michael Porter's "competitive
advantage" (Chinese Publishing Society), which belong to management
classics, of course, go a long way to invest. With those who started out by marketing
Peter Thomas ("the pursuit of excellence"), Jim Collins
("Everlasting"), Michael Hammer ("Reengineering
the Corporation") and other management theorists than the three in
particular Germany Luke and Mingciboge is thought intelligent people, they will not
become obsolete because of changes in trend. But I think to go, or to include them in
the bibliography go, after all, they are classic and the scope of investment and
financial management a bit substandard.
Readers may have noticed, until now the recommended books, in addition to Shizhen
Bang compiled the "International Investment Fund Manager Interview
with nine" no one is a Chinese original, which makes me faint Buan.
Finally (and indeed in the final), I will Chen Tsun-jen of the "silver era of
history" to include 55 books, this book and its author may be heard most
people knew nothing of. Book published in 2000, I viewed something that is written
anecdotes and old Shanghai, and strange questions, not buy. A few years later, see
Cheng was quoted author's evaluation of this book - "Old
Shanghai book, this the best", quite curious, and quickly bought from the
bookstores, a closer look, Sure. Then bought a sequel, "War era
history", slightly less than the previous books.

				
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posted:9/1/2010
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