ZKIZ Archives

You Can Still Make It In The Market CUP



今次推薦的是 Nicolas Darvas 的 "You Can Still Make It In The Market" --下圖,在五窮六絕的市況中,這個書名可謂應景:

看這本書之前當然最好先看完我在2009年第4季推介的 "How I Made $2,000,000 In The Stock Market" http://hk.myblog.yahoo.com/Chui-Cup/article?mid=16926, 這本是今次推介書的上集。

這本1976年的作品 Nicholas Darvas 主要是透過敍述自己繼續用自創的 Box Theory 如何在50-60年代搵了$2M 、在1973-74的大熊市後,繼續贏大錢,以表示自己並非撞彩,自己所定的操作系統之重要性,以及歷久不衰。並藉此再解釋 Box Theory 的用法、持續有效性、以及如何切合市場的本質和實用性,並講及市場諸多普遍輸錢的錯誤以及股票市場的真相究竟是什麼。在 "You Can......" 一書中,作者把 Box Theory 稱為 DAR-CARD,不過都是一樣的,名稱並不重要。

此書其實很短,基本上英語水平不差的話,半天已可看完。以上兩書看似傻下傻下,但短小兼淺白,看完也有很大得著。比坊間大量超圾財經書藉,以及大而無當的 所謂經典有用得多。


  • Stocks don't like to be taken for granted. In some perverse way they have a habit of springing surprises and delivering a hearty slap in the face to anyone who is arrogant enough to think he has mastered them.
  • A business acquainance of mine once bought a stock at 18, saw it rise to 44, then drop to 4 and then rise to 17 and drop again. I have told him many times to sell at 17 -- after all, what is a loss of a point? But no -- he refuses to sell it until it reaches his purchase price of 18. He is determined to teach that damn stock a lesson and get even with it. He has now been holding it for ten years waiting for that opportunity! The stock's price is now 9 and it shows no sign of ever reaching 18.
  • Was the information true or false , reliable or planted, solidly based or completely unfounded? There was no way in which I or any other outsider like me could have found out with certainty. But I did not need to -- the behavior of the stock told me all I wanted to know.
  • I had no idea of course that the company was having troubles at its plant. My actions had been governed purely by the behavior of the stock in the market. I had behaved like an insider without actually being one!
  • A company may have the most wonderful fundamentals in the world, but if people do not buy the company's stock its share price will not go up one cent. Similarly, what is the point of buying a stock that is "cheap" if it then proceeds to get cheaper?
  • When you buy a stock keep in forefront of your mind, not the great killing you are going to make, but the possibility that your stock could drop 50 percent in value very quickly. Never ever let this happen to you. Set a stop-loss, even if only a mental one.
  • It is possible to misinterpret a stock's moves and end up picking a stock that does not behave as you thought it would. That can't be helped. There's no sure thing in the market -- that is why you must always have a stop loss.
  • You must have some system, some rules of behavior when you buy stocks. Any system is better than none at all. And everyone must include a stop-loss.
  • You must know your stock. By that I don't mean that you must know the company, its products, its history etc. I mean literally that you must know the personality of the stock you are buying, its idiosyncrasies, its moods, its mode of behavior. Some are slow, lethargic, and almost apathetic. Others are volatile, fidgety, and nervous and jump at the slightest happening.
  • I did not give up my daily routine of scouring the stock-market tables for promising stocks. I habitually spend at least half an hour a day doing this. I regard it as absolutely essential. It is only by such regular scanning of stock tables that one can train one's eyes to observe significant changes.
  • There's no sure thing in the market. Despite the most painstaking analysis, the most reliable information, and no matter how impeachable the source, stocks have the annoying habit of doing exactly the opposite of what you expect. The price of safety is eternal vigilance. You must keep a constant eye on your stocks.
  • You've got to keep an eye on your stocks -- hold on to them while they are rising, sell them if they decline badly, and never be married to a stock.
  • Not everyone is temperamentally suited to the stock market. Anyone who is unwilling or unable to devote some time to it is probably better off out of the game altogether.
  • When you realize that share prices are determined not by company earnings, dividends, assets, etc., as so many people fondly believe, but by investors' future expectations, emotions, sentiments, and even wishful thinking . A company in the red and with no earnings can thus find its share price climbing purely and simply because an improvement in its earnings is anticipated in the future, even though these expectations are never realized.
  • It is what the market thinks the share is worth and not its theoretical worth that determines its price. Whether the market is "right" or  "wrong" in its conclusion is irrelevant.

You Can Still Make It In The Market CUP
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China's private sector still in shadow of the state 張化橋


China's private sector still in the shadow of the state

   South China Morning Post,19 Dec. 2013

In an essay published eight years ago (Financial Times;October 5, 2005), I said that China's private sector was in theshadow of the state.

I can make the same argument today with one significantdifference: the state sector's dominance in China has grownconsiderably in the last eight years.

The last decade has almost completely undone the reforms of thetwo previous decades.

The consensus in the West is that China's state sector iscorrupt, inefficient and ideologically inferior, so it must belosing ground against private enterprise which is steadily chippingaway at the communist, state-backed old guard.

That is just not the case.

The playing field is unfair andaligned against the private sector. Moreover, there are many hybridjoint venture companies in China that blur the distinctions betweenthe two sectors

Nicholas Lardy, in a recent Bloomberg Brief piece,compared the financial performance of China's state sector with theprivate sector. Citing the National Statistics Bureau, his numberswere predictable: last year, the state sector return on assets(ROA) was merely 4.6 per cent and well below the private sector's12.4 per cent.

I think those numbers are biased and wrong.

The biggest components of the state sector are the banks, whichaccount for almost half of the domestic stock market valuation, andabout half of the total net profit of all the listed companies.Other big components in the stock market, or in the unlisteduniverse for that matter, are state-controlled big insurancecompanies, big oil corporations and telecommunicationsoperators.

Chinese banks have an average return on equity (ROE) of about 20per cent – twice the level of their global peers. Insurancecompanies do well in general, and telecoms operators enjoyexorbitant privileges. How can the state sector underperform theprivate sector in financial terms?

Of course, you can argue that the banks' profits are entirelydue to the government's control of interest rates. That is a trueand fair assessment, but the fact remains that the state sector hasa much higher ROE than the private sector.

Lardy's use of ROA is meaningless because banks by definitionare highly-geared business and their ROAs are low in nature (around2-3 per cent). The nature of the banking business is such that youcannot usefully compare bank ROA with other sectors. ROE is theappropriate benchmark.

The other problem with Lardy's comparison is that tens ofthousands of private sector companies go bankrupt, or voluntarilyclose each year. Once that happens, they exit from the statistics.So there is a 「survival basis」. But you do not hear any state-ownedenterprise being shut down.

Uneven playing field
The state sector not only benefits from the economies of scale, butalso from the economies of scope. The state sector as a whole islike a giant conglomerate company that benefits fromdiversification, the low cost of plentiful funding and politicalfavours.

The playing field is unfair and aligned against the privatesector.

Moreover, there are many hybrid joint venture companies in Chinathat blur the distinctions between the two sectors.

Finally, the state sector takes on many social functions, andtheir existence and activities provide a positive spillover effectfor the whole economy and society.

While liberal commentators may disagree with this, the statesector is designed to achieve more than just financial ratios.

Utilities, (power, water, natural gas and public transportation)for example, where the state sector dominates, are not charged atfull price because of affordability and other social reasons. Thatdrags down their financial returns, but the financial ratios do notreflect their efficiency.

More stateinvolvement

It is wrong for liberal economists to say that the dominance ofthe state sector goes against the public's wishes.

In China, the public wants more, not less, involvement by thestate sector. The public wants a bigger state sector to tackle themany challenges China faces, even if many of these challenges areby-products of the state sector (inequality, overpopulation andpollution).

Even the recent third plenum does not mention the privatesector, a point Lardy acknowledges.

The official data shows that the government tax revenue as apercentage of gross domestic product almost doubled from 12 percent a decade ago to 22.3 per cent last year. This is almost awholesale reversal of the economic liberalisation of the previoustwo decades.

But Western economists do not mention this uncomfortablefact.

The state dominates strategically important sectors – essentialinfrastructure and sectors with pricing power – while the privatesector is left to fight it out in fiercely competitive sectors suchas low-end manufacturing, retail, service industries and (some)real estate.

The writing is on the wall: the score of the past decade's matchof the private sector versus the state sector in China is 「privatesector - zero」 and 「state sector - one」.

Joe Zhang is a corporate adviser based in Hong Kong, and theauthor of Inside China's Shadow Banking: The Next SubprimeCrisis?

China's private sector still in shadow of the state 張化 化橋
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Patience .......is the key STILL !

hi ! James,
see the date and what I had put on the table. Look at what the market calling GMG now?

Investing is profoundly needed hell a lot of patience.
Without that, speculating in the property with decent leveraging, would be an idea instrument too. Goodthing about property is no daily price quote for viewing.

Some stocks, I have been holding for years. GMG is considered a mid-term play, but in between I had been traded it.

Again, I shall be available next Tuesday/Wednesday, confirm in due course.

thanks & regards

--- On Mon, 8/24/09, wrote:

Subject: GMG-Right issues
To: "Warren Oh"
Date: Monday, August 24, 2009, 7:04 PM
Hi ! Warren,

As mentioned this afternoon about participating GMG Global-Right issues. Before elaborating further, I hereby would like to declare my interest/position in this investment selection.

(1) You may have to double check all the facts I’m going
to put on
the table.

(2) I’m not a rubber expert or know a lot about the rubber business.
It is
purely from my “reading” as a small investor point of view and it meet most of my criteria to put some monies in it for mid-term.

(3) Unlike my previous speculation on East Asia Bank, which I was pretty much sure, if you still remember, a great rally after bonus issue 1 for 10 at HK$14 & dividends.

(4) Lastly, please forgive me if ever there is any error and correct me if you can.

My criteria for stock speculating in mid-term, briefly;
(1) Every season has a reason, I’m not buying anything just because it’s cheap or undervalue.

(2) Every selection has to be attached with an impetus for its price to be accelerated.

(3) Very important to warm-up prior loading-up any heavy

MGM Global-Right Issues;
(1) 9 for 10 @ Right price SGD0.055.
(2) 1,818,544,446 @ $0.055 to raise SGD$100 million for Future Acquisition.


(1) I had been trading on this stock prior till G.O in July 2008 by Sinochem International Corporation, a listed company on Shanghai Stock Exchange. Some players behind... made and lost money before.

The market mechanism;

(1) The theoretical ex-price was $0.092, based on the last cum-price of $0.125.

(2) First day trading after ex (Friday, 21 August 2009), mother price dropped till $0.105 and PAL was trading at the ranged-down from $0.05 till $0.035.

(3) On Friday, a few big blocks, about 50 million PAL was crossed at $0.03/35 level.

24 August 2009; (1) GMG-R, closed at $0.035, transacted 200,087,000 shares. Out of that, 142 million shares crossed mostly @ $0.03 cent with about 20million shares @$0.035.

My market reading on the above scenario;
(1) Market over reacted towards its LOW right issues price. This is normally happen whenever a low right issue/placement price, the market just sell down and off course, those will be happily accumulating at the other end. As a contrarian’s strategy, I always love to buy any non- speculative stock under ordinary market situation.

(2) Heavy arbitraging in between the mother & PAL.

(2) Other than that, I’m totally don’t understand why should a company value dropped so drastic? Again, I would like to emphasize; the right issues is for future acquisition, rather than for debt-settlement.

(3) Based on the two days observation, I would like to take the PAL at 0.03/035 is at the bottom benchmark.

Micro interpretation;

(1) Based on the closing price, PAL is trading at a discount against its mother price of 16.67%.

(3)See the attachment, according to the balance sheet as of 30th June 2009; the NTA is about $0.14 cent, at $0.09 (during the crisis price) entry- level is approximately 55% discounted against its NTA.

(4) How about the earning?
GMG Global earning had been at a stable tight range in year 2008, made a lot of profits in year 2007. How about the prospect? What I know is the rubber price is closely tagged upon the automobile industry. The only country automobile industry is doing extremely well is China. (I have been trading some China automobile stocks in HK market and know a little bit of their fabulous financial results recently)

(5) Don’t forget, the earning was from Europe and US before taken over by Sinochem International Corporation (Paid 51% stake at $0.26 per share).

(6) I don’t know exactly how the earning prospect is going to be, but I’ m quite certain; given the current global economy momentum, rubber price shouldn’t be doing so badly, which ought to be translating a set of good earning for GMG Global Ltd.

I always ask about risks involved in any speculation; in this context, whether it could be possibly a/some rubbish injection to take out the $100 million from this company?

Please check the below web; http://www.sinochemintl.com/en/2media/1_detail.asp?id=381

Thus, I think and I would say, the possibly rubbish injection is quite low. Given,
Sinochem International Corporation, the major shareholder’s entry cost is $0.26 plus this right issues subscription & under writing.

Other risks, I may not know such as;
(1) The fluctuation of rubber price,

(2) Geo-political/country risks in Cameron, South Africa & Indonesia? I think, being a Malaysian, whom is forced to invest abroad, inevitably to take certain degree of risks. Well, this is our career/life, dealt with it then.

(4) Worse case scenario? I think, at $0.09 cent backed with almost $0.055 cash per share. We are buying into this business at only $0.035/4, I don’t see any severe risks behind? If you know any, please tell me.

When to cash out/sell;
(1) As I said, every season has a reason; an impetus is expected to boost the share price with the $100 million future acquisition.

(2) Highly likely to participate in the robust China automobile industry,which is to deliver a good set of earning given its major shareholder background.

(3) Who the hack had been absorbing the crossed block of shares (PAL) and via open market? Are they buying for long-term or fun??

cheers !

Patience is the key STILL
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Webb still here - 隆成金融(1225)

昨日,黃國英在am730 一文指出:

「雖然事不關己,但作為一個行內人,目睹股壇長毛David Webb於隆成(1225)之上慘敗,感覺非常不舒服。隆成大比例供股不久,又來一次合股然後再供,遇著無良上市公司,的確是無底深潭。」





1. David Webb 持股愛用Unnamed Investors Participants 持有,根據供股當日紀錄,股份的確增加了接近4倍,相信他有參與供股。

2. 披露上雖然並沒有說明增持紀錄,但根據證監會的說法:

例子1: 當某大股東的持股量由5.9%增至6.2%,由於他的股權跨越了6%這個整數百分比,所以必須作出披露。但是,若他的股權由6.1%增至6.9%,因沒有跨越任何整數百分比,所以毋須作出披露。

所以David Webb 的股權在供股後的百分比,仍然維持8%沒有變化,所以不需披露。

故此David Webb 仍然持有隆成金融的股票。他對這一系的研究見諸這兒,筆者相信他本人不會打無把握的仗。


Webb still here 隆成 金融 1225
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Webb still here - 隆成金融(1225)


昨日,黃國英在am730 一文指出:


「雖然事不關己,但作為一個行內人,目睹股壇長毛David Webb於隆成(1225)之上慘敗,感覺非常不舒服。隆成大比例供股不久,又來一次合股然後再供,遇著無良上市公司,的確是無底深潭。」










1. David Webb 持股愛用Unnamed Investors Participants 持有,根據供股當日紀錄,股份的確增加了接近4倍,相信他有參與供股。


2. 披露上雖然並沒有說明增持紀錄,但根據證監會的說法:


例子1: 當某大股東的持股量由5.9%增至6.2%,由於他的股權跨越了6%這個整數百分比,所以必須作出披露。但是,若他的股權由6.1%增至6.9%,因沒有跨越任何整數百分比,所以毋須作出披露。



所以David Webb 的股權在供股後的百分比,仍然維持8%沒有變化,所以不需披露。


故此David Webb 仍然持有隆成金融的股票。他對這一系的研究見諸這兒,筆者相信他本人不會打無把握的仗。




Webb still here 隆成 金融 1225
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