A shares will hit 5 points. This is not what I said. It is the prediction of the specific point of the A-share market in the 221 economic blue book released by the Chinese Academy of Social Sciences at the end of last year. Is the prediction of the Chinese Academy of Social Sciences reliable? Let's take a look at the historical record of the Chinese Academy of Social Sciences. At the end of 214, when A shares were still at 3, points, the Academy of Social Sciences released a new blue book for 215, in which it was predicted that A shares would exceed 5, points, and the whole market was shocked from 3, to 5, points, which was enough for a bull market in 2. The result was that in 215, A shares walked out of the mad cow, hitting a high of 5,178.
At the end of 218, when A shares were in an extremely pessimistic bear market, no one was optimistic about A shares. However, in the 219 Blue Book of Economy published by the Chinese Academy of Social Sciences, it is predicted that the market of A shares has been confirmed, and the spring of China stocks is not far away. As a result, A shares have ushered in a slow bull in the past two years, and the Growth Enterprise Market index has increased by 1.5 times, and more than 1 stocks have increased by more than 4 times.
Do you think such an accurate prediction is false? What is the origin of this social hospital? The Institute of Social Sciences is a comprehensive research center directly led by the central government and directly affiliated to the State Council. It belongs to the top think tank in the country, ranks in the top 2 among the top 5 think tanks in the world released by the University of Virginia in the first issue, and has been the strongest think tank in Asia for many times. The Chinese Academy of Social Sciences will not easily predict the specific location of A shares.
This time, the Blue Book of Economy once again predicts that the stock market is expected to reach 5, points during the 14th Five-Year Plan period. But after a few years, is it a heavy signal worthy of attention? So for us personally, how to grasp this opportunity and risk? The following contents hope to inspire you!
I'm reading a book these two days. The author has been operating in the stock market community like Snowball for a long time, and he has a deep understanding of the hearts of the majority of investors. It describes the group gambling addiction, as long as it involves money games, it will produce an addiction to people.
There are nearly 16 million investors in China, and the proportion of retail investors is very large. Most people just regard the stock market as a casino, and they enjoy it every day. But I found that most of the old investors rarely make money. Why? Because gambling itself is a game of probability. The question is, why do casino owners always win? There are actually very few gamblers in real life. We hear more news like this, that is, so-and-so entrepreneurs have been tricked into Macao and even overseas, losing everything. When it comes to arithmetic, few people are rivals to casinos. The late Macau gambling king Stanley Ho and his family controlled assets as high as HK$ 5 billion in their heyday. Someone once asked Master He what to do if gamblers always win. He once said a famous saying: if you are not afraid of winning, you are afraid that you will not come. Then in his eyes, he can't lose, because he is betting on math instead of luck.
In a modern casino, it concentrates a lot of knowledge such as probability and statistics. Among them, the Kaili formula is famous in the world of senior gamblers, and it is a mathematical weapon commonly used by top players. It is also the secret that casino owners are most worried about being exposed. So what is Kelly formula? Let's look at an example first, a simple gambling game in which one loses two, excluding the principal. Suppose the bet is 1 yuan, if the coin is heads, it will win 2 yuan, and if it is tails, it will lose 1 yuan. Now your total assets are 1 yuan, and you can invest any amount in each bet. How would you bet? It is known that after placing coins, the probability of both sides is 5%. The odds are 1 to 2, excluding the principal. So in fact, as long as you bet patiently, we are putting aside the interference of so-called unfair factors. In fact, you can make money, because the more times you flip a coin, the more likely it is that the probability of his heads and tails will be stable at 5%. Right? Double the gain, but only double the loss. So from a mathematical point of view, it is a sure bet. But unfortunately, the situation in the real world is more complicated than this, and deviations can always occur.
If you are an adventurist radical, you may think that if you want to play, you will play with big tickets. I'll all put 1 yuan on it at one time, and if I'm lucky, I all in the 2 yuan head-on. Wow, you see how much I deserve to show off, right? But if you lose, you have to hand over 1 yuan's assets to the other party, and you will have nothing.
If you are a conservative, you may think so. I'd better be careful and take my time, one percent at a time. I only bet 1 yuan at a time, winning 2 yuan head-on and losing 1 yuan head-on. I can afford to lose. After playing for twenty times, I suddenly felt that the other side could win 2 yuan by betting on 1 yuan once, and I won only two dollars at a time and 2 dollars after ten times. Wow, why do I feel like I'm missing hundreds of millions? I regret it. The stock market is often such a problem. When there is a small profit, as soon as you hear that others have made a lot of money, you are eager to make it. If you make a big profit yourself, you will dislike why you don't invest more. If you lose, you regret it. Why do you invest so much ...
What will you get from proportional investment? If the average gambler is not good at math, he may look stupid. But Kelly's formula can tell us a clear answer. After calculation, the proportion of each bet is 25% of the total funds at that time, so that we can get the maximum benefit. Then let's look at Kelly's formula. Then the molecule on this formula, it represents a side of mathematics, which we also call expected value. Then what is the right bet? This formula tells us that by choosing the best bet ratio, we can get the highest profit in the long run. Ok, let's go back to the example we told you at the beginning, that is, the probability of throwing coins is 5%, so the probability of winning and the probability of losing are .5, which is 5%. Then the odds are equal to the expected profit, divided by the possible loss, that is, two profits divided by the loss of 1 yuan, and the odds are 2.
The proportion of capital that we should bet on the answer of the pound, which is equal to 25% in the end, from which we can draw a conclusion that we should bet 25% of the current funds at a time. Suppose our initial amount is 1 yuan, and the positive income of the coin is twice that of the bet, then the negative will lose the bet amount. We simulate and calculate the income of 1 gambling games, and we can finally find that its income is equal. Note that the positive and negative hope data of coins have no effect on our final income results. Then we will bet according to the betting ratio of 25%, and this income will basically show a general trend of steady growth. But suppose that when your betting ratio is 1%, as long as there is any flip side in ten times, you will completely lose all your money and go out directly. And the probability of each negative is still 5%. And every time 1 yuan, that is, when the betting ratio is 1%, the mathematical gain of 1 times is equal to 15. This risk is very small, but the gain is too low.
In this way, Kelly's formula is actually the biggest winner. Every time a casino operator starts, he will keep this mathematical principle in mind, because this is his job as an ordinary gambler. Besides hoping God can bless him, he actually can't think of such a complicated mathematical principle. So even if you get lucky occasionally, you will never win Kelly's formula. Then all casino games are almost unfair to gamblers. But this unfairness is not because the bookmakers cheat, and modern casinos rely on mathematical rules to make profits aboveboard. In a sense, casinos are the most open places. If this is not the case, where can Mr. Ho live to a long life before leaving, even if he has nine lives? He didn't imagine this formula out of thin air. This mathematical model has been verified on Wall Street. In addition to being divided into winning theories in casinos, they are also called money management artifacts in the asset management industry, such as Bill Gross and Buffett, who often use Kelly formula to calculate their income. Let's go back to the Kelly formula we just discussed. According to the conclusion of its formula, when the expected value is negative, the gambler does not have any advantage, and it should not make any bets. If you want to bet on gambling, you might as well open your own casino as a banker, right?
There are few gamblers in the world. They are not Chow Yun Fat in Hong Kong movies. Among them are often mathematicians or inventors of sexual information theory. They can pull back the profits of these casinos to more than 5% through a series of complicated calculations and mathematical theories. They rely on strong mental arithmetic ability to pull the probability up. So if your original math foundation is not very good and your mental arithmetic ability is just so-so, you might as well recite these three principles.
in the first case, when the expected value is equal to zero, gambling is a fair game, and we should not make any bets at this time. The second situation is that when the expected value is negative, gamblers are obviously at a disadvantage, and they should not bet on any gamblers. Ok, then the third situation is that when the expected value is equal to positive, then betting according to Kelly formula will make the fastest money and the least risk. In fact, there is only one final conclusion. Don't gamble all your net worth at any time. Even if the winning rate is relatively high, you need to be cautious. This is why I tell you that you shouldn't put all your money on any single stock ticket, not to mention that we can't add leverage to a single target. Then some people may say that I'm not playing games with mathematicians. I just need to meet my opponent. But what's the problem? You are no matter you or the other party, in fact, everyone is going to provide running water for the casino in the end. Then as long as you stay in this casino for a long time, both of them are working for the casino. Modern casinos are unlikely to make their own pretenses, and they all rely on mathematical theorems to earn their own profits. So this Stanley Ho is not only proficient in mathematics. His son He Youjun, who is the youngest master of finance in Massachusetts history, has won the prize in the world mathematics test invitation for two consecutive years. This is the family gift. No one can be more rational than the casino owner. No one can be more proficient in mathematics than the experts invited by the casino owner, but naturally no one can have more money than the casino owner, unless you are Bill Gates or Musk? Then if you really want to win this layout of life, there is actually only one real principle. Tomorrow's stock market will still open and close normally. Can you really stop gambling?