Jin Xuewei: Investment Starts From Looking For Price Driving Force

The top is one of the basic styles of bull market on top. The 2444 and 2478 points of the two bear market bands and the neck line position of the Shanghai Composite Index's large bottom form have objectively made the final qualitative determination of the current market, no matter what kind of shocks the future will have.

To recuperate is to go a long way, another style of bull market. According to the standpoint of the view, the big shock in the trend process is one of the manifestations of dynamic energy, active trading, buyers and sellers both satisfied with the current price and the market being able to take up the heavy responsibilities.

Last week we talked about the driving force of stock selection. A stock is not worth buying, it needs to consider its value driving force, price driving force and market driving force. Ideally, the three driving forces have both advantages, as Larry Williams said. If it can not be satisfied, which driving force is the most important? My answer is: price driving force. Because share prices are like dust and people will stir up when they stir. Because we are not the immortals, and the market will not follow my wishes, the performance of stock prices is often the touchstone for testing our judgement of the stock.

Some "Gao Ren Yun" may be sneered at: This is a speculator, Buffett will see the stock price performance?

Yes, Buffett doesn't look at stock prices, but this is what Buffett said. Buffett always has two sets of language systems, one is explicit and the other is implicit. Buffett loves to conceal some "little secrets" and play some "tricks", which is no longer a secret in the industry.

Buffett has two reasons. One is Public rationality What he said in public is public reason, which is the most fundamental and the most correct thing. Otherwise, he may expose some secrets which are not easy to expose, and may make some readers who have a smattering of knowledge listen to the facts, go astray and go astray. Contrary to some Buffett believers, "most of them are easy to do things lightly." The other is money making rationality, which is suitable for self mastery and self making. For example, we all know that Buffett is disgusted with financial derivatives and thinks it is the worst invention in the twentieth Century and the weapon of mass destruction in the financial market. In May 6, 2002, in an interview with Forbes, he once again made a clear objection to financial derivatives. His partner Charlie Munger interposed: "comparing financial derivatives to sewers is an insult to sewers." How well said!

But this only reflects Buffett's sense of social responsibility as a social person. As a businessman, making money is the absolute principle. "Why can't I feel it?" just 16 days after the interview, he introduced a brand new and even specialized financial derivative trader who felt that "complex and secret" financial derivative - continuous interest bearing bonds. When announcing the product, Buffett admitted that he had asked Goldman to design it (when the financial derivative was dirty than the sewer, he had asked Goldman to design it for him). On the same day, Buffett announced that he had left. The most embarrassing thing was the company spokesman, who was unable to justify himself in the face of people's censure and questions.

about Buffett I have already talked a lot about the way of investment and the inconsistency between the investment and the words and deeds. I have talked a lot about the stock investment road and Buffett series. In that group of articles, I gave two examples of stock. One was Coca-Cola. Before Buffett started, Coca-Cola traded at the price of $4 for several months. But until the breakthrough broke out and the monthly line pulled out a lot of Changyang, Buffett just killed it. One is IBM, which has been consolidated at the highest level before Buffett started, and Buffett has completed his research on it. But he really did it fourth months after it hit a record high. Why is it in fourth months? Because it didn't release huge amounts of red until it was third months ago. In 2002, I spent months studying many of the stocks that Buffett bought, and found that since 1980s, all the stocks he bought has followed three basic forms, one of which is "breaking through a certain return area or sorting out the region with a huge amount of Changyang".

This form is in the United States. equity market In fact, it is very famous. It was built in 1960s and is a very classic William Oneill model -- buying pivot. At the end of 1980s, I read it for the first time in Mr. Lin Long Yuan's "amulet of the individual" in Taiwan. Mr. Lin has a very famous name: telegraph pole. In 2006, a Chien fan named it "standing stake". Because this method is best understood, the general investor can take it as the first criterion of price driving force.

The constituent elements of buying pivot are three. Breakthrough can be a breakthrough in form or a breakthrough in small form, in which small form breakthroughs are easier to grasp. The number of poles is, as the name suggests, the column before it must be short and relatively balanced. To what extent is it huge? Generally it is 3 times more than 50 days, or about 10 times the lowest turnover in recent decades. In Changyang, I usually use the length of the sun line more than 2 times the average K-line length of nearly 100 days as the standard.

In order to observe the 300 financial index, we will find that the current round of financial stocks has two better buying opportunities. It was a buying pivot in July 24th, but there were many stocks with this form, and financial stocks were not necessarily good targets. The other is the buying pivot in October 31st, and since most stocks are no longer available, financial stocks have become a good target.