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Problem solving in behavioral finance class
1. Why did these experts openly express optimism without analyzing that the stock was about to fall?

First of all, when a stock is overheated and too many people pay attention to it, people often fall into the herd effect. Whether experts or investors, it is easy to give up their own judgment and follow the majority views of the market, thus openly optimistic about Maotai.

Secondly, experts have no real ability to beat the market. The market is unpredictable, and no one and no trading strategy can continue to outperform the market.

Third, in the secondary market, experts will also have cognitive bias in information collection, processing, output and feedback. Experts also make a series of mistakes, such as overconfidence.

Finally, the interests of expert representatives are different. Even if they are openly optimistic, it does not mean that experts must hold or prepare to hold this stock.

2. Do you think the stock of Maotai, a good company, is a good stock? What's your reason?

On this issue, I hold the opposite view for two reasons.

First, good companies need good prices. When investing in stocks, you should not only buy good ones, but also buy good ones.

Second, as a high-quality company like Maotai, it certainly has certain competitiveness. However, as far as its commercial nature is concerned, liquor can not become the mainstream of the future consumer market, nor does it conform to the general trend of consumption upgrading. Therefore, the future judgment of such companies cannot be limited to the existing situation.

3. Combined with your investment situation, would you choose to hold this stock?

For Kweichow Moutai, it had previously held the stock near 150 yuan, and gained considerable profits. However, according to the current situation, I will reconsider holding this stock only when the market is excessively panicked and the stock price is far below its value.

the next day

The first question: business prospects, financial situation, boss's personality, management level, market cycle and current stock price.

The second question: First of all, our cognition is irrational. We can't correctly understand what we want to know, and our understanding of the same thing is different. Second, even if it is as close to the truth as possible. When you can't correctly understand others' understanding and compare your own judgment with others' judgment, you may still be cut off. So just looking at the fundamentals can't avoid being harvested.

My biggest experience: 1. Avoid all hot spots. The current hot spot must include the overdraft of future stock prices. 2. It is equally important to master the emotions of Mr. Market, which depends on the fundamentals relative to investing in stocks. 3. Keep questioning attitude and insist on independent analysis.

The third question: rationality! We should not judge whether institutional investors' decisions are rational from the current results, and rational decisions may not necessarily have benefits. From my understanding of investment, I think Sunac China is very rational. First of all, it stands on the opposite side of the vast majority of investors. It knows how to take advantage of opportunities, and often the benefits of this choice are very considerable. Secondly, Sunac's purchase price in China is extremely low, which is far more rational than that in 44 yuan. Finally, 654.38+065 billion may be astronomical for individual investors, but for Sunac China, it is using small funds to incite big profits.

the third day

1. Why is it so difficult to buy profitable assets when there is systemic risk?

First of all, the emergence of systemic risk must be group behavior. In this case, the influence of "herd effect" and the great lethality of "waterfall effect" will cause group mistakes and even turn into social disasters.

Secondly, there is a higher correlation between individual stocks and the broader market in China stock market, and it is more prone to the situation of "one glory for all, one loss for all".

2. What are the general sources of systemic risks and what are the characteristics of the market?

There are many sources of systemic risks, such as debt crisis, financial crisis, economic crisis, credit crisis, war, regime change, policy change and external environment change. Even some malicious hype will set off a wave in a short time. At this time, the market is usually manifested as: group consensus behavior, panic behavior, irrational behavior.

3. What measures will you take or do you know to deal with systemic risks?

First of all, pay attention to the allocation of large-scale assets, not just a specific trading market.

Secondly, pay attention to the cycle, pay attention to market sentiment, and stay away from hot spots.

Thirdly, take risk prevention measures in advance, such as making a response plan in advance and leaving enough cash.

Finally, we should be good at finding opportunities in risks and learn to use "small probability" events to earn excess returns.

The fourth day:

Do you think the market is predictable in the short term? Why? If you think so, please share your market forecasting method and briefly explain the reasons. If you don't think so, or the analyst's prediction is unreliable, please also explain the reasons.

The short-term market is unpredictable.

1. In the stock market, as long as the expectation changes, the price will change accordingly, and in a relatively short period of time, the expected change actually happens randomly, so the price change also happens randomly.

2. The future is uncertain. We have to predict that the information in the future is constantly changing and the future is unpredictable. Therefore, it is difficult to make a completely accurate prediction in both short-term and long-term.

3. There are too many factors that affect the stock expectation, so it is impossible to master them all.

Although the short-term market is unpredictable, in the long run, the long-term trend of stocks can still be judged qualitatively. It uses empirical induction instead of general deduction, and uses real large samples combined with statistical methods to refine regularity. The stock price should not deviate from the company's operating conditions. If the deviation is large, the stock price will return. Smart investors can make correct judgments based on market behavior, rather than accurately predicting stock prices.

Day 5:

Generally speaking, from what angles will you analyze the phenomenon of equity pledge? According to these analyses, how will you adjust your capital allocation? From a cross-section, from which dimensions would you analyze the equity pledge company? According to these analyses, how would you choose assets?

Equity pledge is one of the important financing tools for major shareholders of listed companies. The common phenomenon of equity pledge not only reflects the lack of market funds, but also reflects the current financing difficulties. As an enterprise, financing through equity pledge has low financing cost and convenient procedures. However, there are certain risks in equity pledge. Excessive pledge rate and stock price fluctuation bring the risk of forced liquidation, and even a series of chain reactions may occur during the period of poor stock performance, causing a huge crisis. For enterprises with small scale, unstable profits and large stock price fluctuations, equity pledge should be used with caution. Too much equity pledge often indicates that there are a series of problems in the development of enterprises, such as insufficient cash, reduced profits and rising asset-liability ratio, which deserve investors' attention.

The prevalence of equity pledge also has warning significance for personal asset allocation: on the one hand, personal asset allocation should leave some cash, and excessive debt consumption can not support the normal development of families. On the other hand, the allocation of personal assets should not be excessively concentrated in one aspect. For example, all the assets of a family are allocated in stocks. And it is very risky.

In the cross section, I will focus on the company's enterprise scale, pledge ratio, the use of pledged funds, debt level, operating conditions, cash flow and short-term stock price performance. When choosing stock assets, I don't care whether enterprises and major shareholders have equity pledge, but I will avoid small-scale enterprises with high pledge rate and insufficient cash flow.

sixth day

1. What kind of events do bitcoin events generally belong to? Please write down similar events in history and the market situation at that time.

2. From another perspective, Bitcoin is also a highly distorted asset, and highly distorted assets are often accompanied by conceptual hype. Please list the cases of concept stock speculation you know (you can analyze the characteristics, behaviors and benefits of different investors) and talk about the lessons you have learned from them.

Bitcoin events are generally attributed to excessive speculation. Although the blockchain represented by Bitcoin is indeed very advanced, there may be many technological changes in the future, but the actual application has not yet found a good foothold, and it still stays in concept. Similar over-hyped events include tulip incident, South China Sea bubble incident, Internet bubble incident and so on. When these events happened, they were all unanimously bullish, the market sentiment was high, and then they went crazy and lost their minds, which eventually led to the bursting of the bubble and heavy losses for investors.

Let's take the stock of all-pass education as an example. All-pass education was listed in June 20 14, with a market value of less than 2 billion. Since its listing, under the big bull market environment, this education-themed stock has also been badly speculated, and some even suggested that all-pass education would surpass the education giant New Oriental. Under such hype, the stock price soared to 467 yuan per share. Many investors around us can't resist the temptation of high returns and join the ranks of speculation. Some investors believe that although there is a bubble, it can't be the last one; Many investors even think that they can double their purchases in just a few weeks. Even if the stock falls, they will not lose money if they sell it. However, contrary to expectations, most investors failed to invest in this stock. The stock of all-pass education has also dropped from 467 yuan/share to 6.42 yuan/share now.

As investors, we should gain a lot of experience from it: 1. Think independently and judge independently. 2. Resolutely do not follow market hotspots. 3. When the expectations of most investors in the market tend to be consistent, it is a terrible thing, so we should be alert to the outbreak of systemic risks. 4. Don't overestimate your ability, the market is hard to beat, and stick to your own ability circle.

Seventh day

1. When this "black swan" event occurs in the market, what will you do with this stock and related stocks, and why?

2. Why does this stock continue to have a daily limit after its daily limit? Who will make a profit and how? What are the risks?

3. Institutional investors seldom participate in the trading of such stocks. If you make a behavioral portfolio strategy, what will you do with this type of stock?

The black swan incident is almost inevitable. The focus of our research is not how to avoid it, but how to face it correctly and even use the black swan incident to realize our own interests. When there is a black swan event in the market, first consider whether the stock with the event still has investment value. Is the impact of the Black Swan incident short-term or lasting? If there is no investment value, we must resolutely stop loss, act as soon as possible, and do our best to avoid the lethality of the waterfall effect in the later stage. If it is only a short-term "prince in distress", we should seize the opportunity and take advantage of the mistakes of most investors to buy when the stock price is wrongly killed.

From continuous daily limit to continuous daily limit, it is essentially a "stupid" behavior. Most investors will have a cognition that stocks cannot fall indefinitely. When the stock price is low enough after several consecutive daily limit, some traders in the market begin to enter the market, use this knowledge to boost the stock price and sell their stocks to the following receivers at a higher price. In a short period of time, they make use of the irrational behavior of retail investors and make profits by fast trading. However, such transactions are extremely risky and will quickly breed bubbles. When people make decisions, there will be many mistakes such as overconfidence. Who can guarantee that they won't take the last stick in the game of delivering packages?

In my behavioral portfolio strategy, I will first judge whether a stock has investment value, and I will avoid stocks without investment value. The stocks with great investment value are often good opportunities to buy when the stock price falls sharply and rebounds continuously. They will seize this opportunity and get benefits from it.