When there is a difference between the gold futures prices in London futures market and new york futures market, short (sell) in the high-priced market with the same number of lots, and long (buy) in the low-priced market for profit. This is an important technology of investment arbitrage. Buying and selling the same investment object in different time and space to obtain spreads is arbitrage. Usually, we understand that the same object is bought low and sold high at different times, but arbitrage is more about arbitrage in different objects in the same space or arbitrage in different spaces of similar investment objects. The essence of investment is to tap a wide range of potential arbitrage opportunities. Only by grasping the relative value can better arbitrage be possible. Taking real estate (residence) as an example, this paper studies how to find potential arbitrage opportunities. Analysis of Real Estate Inter-regional Arbitrage Opportunities Due to the great regional differences, the economic development among cities in China is unbalanced and the real estate investment opportunities among cities are unequal. There are arbitrage opportunities between real estate in different cities. In addition, the development of different regions in the same city is also quite different, so there is also room for cross-regional arbitrage. For example, comparing Beijing real estate with Shanghai real estate three years ago, Shanghai's GDP was around 500 billion, and the annual growth rate of 10 was above 10%, while Beijing's GDP was around 300 billion, an increase of about 9%. The population of Shanghai is 6.5438+0 million more than that of Beijing, but Beijing is much larger than Shanghai, so the capital density and population density of Shanghai are higher than that of Beijing. According to the theory of real estate capital density (see the first two issues of this journal), the house price in Beijing should not be higher than that in Shanghai, but the house price in Shanghai was only 3/5 of that in Beijing at that time. Even if there are bubbles in both cities, according to the theory of relative value, especially in the case of continuous decline in Beijing and Shanghai commuting cost, the result of market equilibrium should be that the housing price in Shanghai is higher than that in Beijing. Similarly, Fengtai District, Xicheng District and Haidian District in Beijing have different economic growth rates and different development prospects; Pudong, Songjiang and Huangpu districts in Shanghai are very different. As long as investors pay attention to urban planning and the development characteristics of each district, they can judge and find the relative value, put down the slow-developing property and hold the property in the relatively fast-developing area, and you will certainly achieve better financial management results. There is a "law of price normalization" in microeconomics, which means that the price difference between a and b of a commodity should be its freight. When the price difference between A and B is greater than its freight, there will be arbitrage space. As long as investors buy from low-priced areas and sell in high-priced areas, they can make a profit. This behavior of finding arbitrage space in advance and locking in profits is "buying and selling". Investors just want to lock in profits, while operators (such as trafficking) have achieved "price normalization" and leveled the arbitrage space. For mobile products, worldwide, every region produces products with cost advantages. These areas specialize in producing the most productive products. The surplus products are transported to other production and consumption places in a cheap way. Is there a "price normalization method" for real estate? Real estate is the conditional expression of the law of "price normalization". The value of real estate does not exist in isolation, they are absolutely matched with commercial logistics and people flow, and they are the premise of each other. We must use "mirror image" thinking to understand the phenomenon of "price unification" of real estate. High housing prices in the city center and low housing prices in the suburbs are not determined by land supply, but by the aggregation cost of commodity logistics. The price difference between suburbs and downtown in the same direction may be very large, because the cost of logistics goods and population gathering in areas with traffic arteries (such as rail transit) is lower than that in areas without traffic arteries. When the housing price in the suburbs of A and B will gradually reduce the logistics cost because of the improvement of traffic, it will lead to the gradual narrowing of housing prices in the two places. In other words, the normalization of real estate value is ultimately achieved through the normalization of commodity logistics value. An extreme example is: when the house price in area A in the central city is 10000, and the house price in suburban area B is 3000, the rail transit connection between areas A and B will increase the house price in area B and decrease the house price in area A without new resources injection ... When there is incremental resources injection, the house price in area B will increase more than that in area A. This is the commodity logistics and people flow in commuting cost. The practical guiding significance is that Pudong and Puxi are two different cities, because commuting cost is high, if there is no tunnel and bridge connection. House prices in the two places will be relatively independent. When tunnels and bridges are continuously connected between the two places, the real estate in northern Beijing could not appreciate so quickly without Badaling Expressway and light rail. Due to the sharp decrease in commuting cost, the housing prices in the two places will gradually approach, and the closer the logistics aggregation cost is to the real estate price, the easier it is to approach. This arbitrage space has been leveled by traffic. Analysis of the arbitrage opportunity market equilibrium (Pareto optimality) between different products in the same region requires the maximization of resource utilization efficiency, and land resources also participate in diversified market choices, as mentioned in the previous article. Land is the right of things on the ground and the derivative product of land. Therefore, the value of urban land is realized by the above-ground objects, which are expressed in the form of collections: houses (RV), hotels (HV), office buildings (OV), commercial buildings (CV) and factories (FV). LV (urban land value) = RV+HV+OV+CV+Fv. Due to the different weights of the left parameters of the urban function equation, there is a reasonable relationship between the supply of various functions in a specific economic environment. When LV is constant, assuming that RV, HV, OV and CV are all decreasing and the equation is balanced, then FV must be increasing. Undoubtedly, investors should put their money into the factory at this time. This is also one of the logical ways of thinking to find arbitrage opportunities. For a simple example, there are many intermediary shops in Shanghai at present, but if the output value of an intermediary shop in a specific location is higher than that obtained by changing it into a steamed bun shop, then this intermediary shop should be changed into a steamed bun shop. This is an example of maximizing the use of land resources with marginal benefits. This requires investors not only to know the real estate market like the palm of their hand, but also to know the real estate market such as commercial housing like the palm of their hand. In order to find arbitrage opportunities between different properties. Analysis of arbitrage opportunity between rental rate of real estate and real estate price: Expected income evaluation is an important method in asset evaluation. Any asset that can continuously generate cash flow can be evaluated and measured. As an asset, the value of real estate is equal to the sum of present value of future cash income. If you buy a house with a fully decorated value of 500,000 for rent, the annual net rent may be 40,000, and the annual rent of 40,000 may last for 5 years, with an annual yield of 8%. In the next 10 year, the average rate of return may be only 30,000, with a yield of 6%. If the discount factor of compound interest (static) is not considered, investors can recover their investment after 15 years. If the compound interest discount factor is considered to calculate IRR, the above assumption may not be able to recover the investment in 20 years. When housing users can't afford it and investors don't have an ideal rental rate of return, is there any reason for the property price to rise? Therefore, the safety margin set by rational real estate investors is that the rental return rate is higher than the average social return rate on investment. Almost any commodity or investment object will have periodic price fluctuations. Real estate is no exception, and the buying and selling price and leasing price of real estate will fluctuate periodically. For the lessee, there is a big cash cost gap between the real estate price and the rental price, which makes there exist two relatively independent buying and selling markets and leasing markets for houses with the same use value. However, the buying and selling price and the leasing price cannot deviate infinitely, and there is a certain quantitative logical relationship between them. Its frame of reference is the average social return on investment. When the average social return on investment is 5% and the real estate rental income is 8%, the so-called "deviation phenomenon" will appear, and the real estate price will rise but the rent will continue to fall. The prices of two relatively independent real estate markets can fluctuate within their own independent price ranges, that is, they can rise and fall together, or they can rise and fall together. Therefore, investors must consider the financing cost or the opportunity cost of capital. For ordinary white-collar workers, the cost of self-owned funds is about 2%-3%, and the cost of loans is 5. 04%。 In the past three years, the rental rate of real estate in Beijing and Shanghai has dropped from 15% to about 5% at present. When the rental investment rate of real estate is above 6%, the real estate price rises rapidly. This is because 10-30' s personal property mortgage interest rate is 5.04%, and investors can make full use of financial leverage. For example, when the annual rent of a 500,000 house is 40,000 yuan, the annual rental income is 8%. Because the mortgage interest rate is 5%, buyers enjoy a 3% spread, that is, buyers can borrow money from banks to earn money for themselves. So I wrote an article that when the rental benefit rate drops to 5%, the corresponding property price may be adjusted, because when the rental benefit rate is 5%, it will trigger a lot of selling, and the financing cost is 5.04%. However, if the average social investment rate continues to decline, real estate prices will rise and break through the resistance level. Therefore, when there is arbitrage space between the rental return rate of real estate investment and the average return rate of social investment, it is an opportunity for investors. Analysis of arbitrage opportunities in real estate market and financial market Investment and financial management must study the financial environment and monetary policy, among which the changes in expected interest rate and money supply are the most important. Because our mortgage interest rate is a floating interest rate, the mortgage interest rate will change with the change of the basic interest rate, which will directly affect the financing cost of investing in real estate and the efficiency of financial leverage. With the imminent opening of domestic finance and the acceleration of the listing of "core assets", listed companies will be shortlisted in the past, because the more excellent assets are listed, the more doomed they will be, which is the inevitable strategy of rational people. In addition, any form of MBO and economic corruption are short A shares. So the result is the appreciation of physical assets and the depreciation of virtual assets. China's economic development is different, but the implementation of the same mortgage interest rate itself will benefit the real estate prices in big cities such as Beijing and Shanghai; Among all commercial banks in all cities, Shanghai's commercial banks have the lowest proportion of bad debts. Shanghai's credit system is the best in the country, and these conditions will support Shanghai's real estate. The mortgage interest rate of foreign banks is much lower than that of Chinese banks; The return on investment (dividend benefit) of A-share listed companies is mostly below 5%; The four major commercial banks plan to go public next year, and they will be eager to improve the quality of bank assets and reduce the proportion of bad debts. Therefore, next year, commercial banks will increase the amount of mortgage assets to stimulate and enlarge the ability to buy houses. As far as the current situation is concerned, it is safer to hold Shanghai real estate than to hold financial assets, and at the same time get a better rate of return, so there is still room for arbitrage in Shanghai real estate, so house prices will continue to rise.