At the end of 20 18, A shares were in an extremely pessimistic bear market, and no one was optimistic about A shares. However, the "Blue Book of Economy" published by China Academy of Social Sciences in 20 19 has confirmed the forecast of A-share market, and the spring of China Stock Exchange is not far away. As a result, A-shares have ushered in a slow bull in the past two years, with the growth enterprise market index rising by 1.5 times and 100 more than four times.
Do you think such an accurate prediction is false? What is the origin of this social hospital? Academy of Social Sciences is a comprehensive research center directly under the leadership of the central government and directly under the State Council. It belongs to the top think tank in China, and ranks in the top 20 of the top 50 think tanks in the world released by the University of Virginia in the first phase, 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 Economic Blue Book once again predicts that the stock market is expected to reach 5,000 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 am reading a book these two days. The author has been operating in the stock market community like Snowball for a long time and has a deep understanding of the hearts of the majority of investors. It describes gambling addiction, as long as it involves money games, it will produce an addiction to people.
The number of investors in China is close to1.60 billion, and the proportion of retail investors is very large. Most people just regard the stock market as a casino and enjoy it every day. But I found that most old investors seldom make money. Why? Because gambling itself is a game of probability. The question is, why do casino owners always win? There are very few gamblers in real life. We have heard more news that an entrepreneur has been cheated to Macau or even overseas, losing all his money. When it comes to arithmetic, few people are rivals to casinos. At its peak, the late Macau gambling king Stanley Ho and his family controlled assets as high as HK$ 500 billion. 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 of not coming. Then, in his eyes, he can't lose, because he gambles on mathematics instead of luck.
In a modern casino, it concentrates a lot of knowledge such as probability and statistics. Among them, Carey formula is famous in the field of senior gamblers, and it is a common mathematical weapon for 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, 1 lose 2, excluding the principal. Suppose the bet is 1 yuan. If the coin is heads, it wins 2 yuan, and if it is tails, it loses 1 yuan. Now your total assets are 100 yuan, and you can put any amount into each bet. How would you bet? It is known that after placing coins, the probability of both parties is 50%. The odds are 1 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 heads and tails will stabilize at 50%. Right? Double the gain, but only double the loss. So from a mathematical point of view, this is a sure bet. But unfortunately, the situation in the real world is much more complicated than this, and there will always be deviations.
If you are an adventurous radical, you may think that if you want to play, you can play with big tickets. I put 100 yuan all at once. If you are lucky, you can get 200 yuan for a head. Wow, do you see how much I deserve to show off? But if you lose, you have to give the assets of 100 yuan to the other party, and you have nothing.
If you are a conservative, you may think so. I'd better be careful and take my time, 1% bit by bit. I only bet 1 yuan at a time, winning 2 yuan head-on and losing 1 yuan head-on. I can't afford to lose After playing for 20 times, I suddenly feel that my opponent can win 20 yuan with one bet 10, while I only win two yuan at a time, and I will win 20 yuan with 10. Wow, why do I feel a few hundred million less? I regret it. The stock market is often such a problem. When there is a small profit, as soon as I hear that others have made a lot of money, I am eager to make it. If you make a lot of money yourself, you will dislike why you don't invest more. Lost, regret, why do you want to invest so much? ...
Will proportional investment get the maximum benefit? 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 in this formula, which represents one aspect of mathematics, is also called expectation value. So 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 I told you at the beginning, that is, the probability of throwing a coin is 50%, so the probability of winning and the probability of losing are both 0.5, which is 50%. Then the odds are equal to the expected profit, divided by the possible loss, that is, two profits divided by 1 yuan loss, and the odds are 2.
We should bet on the proportion of funds in the pound, which is equal to 25% in the end, and we can draw 25% of the working capital from it every time. Suppose our initial amount is 100 yuan, and the positive return of the coin is twice that of the bet, then the negative one will lose the bet amount. We simulate the income of 10 gambling game, and finally we can find that the income is equal. Pay attention to the positive and negative hope data of coins, which has 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 your betting ratio is 100%, and if there is any negative in ten times, you will completely lose all your money and go straight out. And the probability of every negative is still 50%. And every time you bet 1 yuan, that is, when the betting ratio is 1%, the mathematical income of 10 times is equal to 105. The risk is small, but the return is too low.
In this way, Kelly's formula is actually the biggest winner. Every time a casino trader lays hands on him, he will keep this mathematical principle in mind, because it is his job as an ordinary gambler. Apart from wishing God bless him, he can't think of such a complicated mathematical principle. So even if you are lucky once in a while, 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 make aboveboard profits by mathematical rules. In a sense, casinos are the most open places. If not, even if Mr. He has nine lives, where can he live before he leaves? This formula is not imaginary by him. This mathematical model has been verified on Wall Street. In addition to the win-win theory in casinos, it is also called the money management artifact 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 just discussed. According to the conclusion of its formula, when the expected value is negative, gamblers have no advantage and should not make any bets. If you want to gamble, you might as well open your own casino as a banker, right?
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 the profits of these casinos back to more than 50% 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 average, you might as well recite these three principles.
The first situation is that 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, the gambler is obviously at a disadvantage, so don't bet on any gambler. Ok, so the third situation is that when the expected value is equal to a positive value, then betting according to Kelly's formula will make the fastest money and minimize the risk. In fact, there is only one final conclusion. Never put all your eggs in one basket at any time. Even if the winning percentage is high, you need to be cautious. That's why I tell you that you shouldn't put all your money on any single stock ticket, not to mention that we can't leverage a single target. Then some people may say, I'm not playing games with mathematicians. I just need to meet my opponent. But what's the problem? You don't care about you or the other party. In fact, in the end, everyone will provide running water for the casino. So as long as you stay in this casino for a long time, both of you are working for the casino. Modern casinos are unlikely to make their own fakes, and all rely on mathematical theorems to earn their own profits. So this Stanley Ho is not only proficient in mathematics. His son, He Youjun, is the youngest master of finance in Massachusetts history, and has won the prize in the World Mathematics Test Invitational Tournament for two consecutive years. This is a 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 be richer than the casino owner, unless you are Bill Gates or Musk? So if you really want to win this life layout, there is only one real principle. Tomorrow's stock market will still open and close normally. Can you really quit gambling?