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。
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.
Wall Street never changed, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes.
All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope -- that is why the numerical formations and patterns recur on a constant basis.
他主張投機要有嚴肅的態度：Anyone who is inclined to speculate should look at speculation as a "business" and treat it as such and not regard it as a pure gamble as so many people are apt to do.
1. Timing is everything. You can beat a horse race, but you can't beat the races. 嚴選時機十分重要：Experience has proved to me that the real money made in speculating has been: "IN COMMITMENTS IN A STOCK OR COMMODITY SHOWING A PROFIT FROM THE START"
2. Markets are never wrong --- opinions often are. If you believe it likely to have a definite bullish or bearish effect marketwise, don't back your judgement "UNTIL THE ACTION OF THE MARKET ITSELF CONFIRMS YOUR OPINION".
3. Emotion control --- It is a human trait to be "HOPEFUL" and equally so to be "FEARFUL", but when you inject hope and fear into the business of speculation, you are faced with a very formidable hazard, because you are apt to get the two confused and in reverse positions.
4. Money Management --- Profits always take care of themselves but losses never do --
As long as a stock is acting right, and the market is right, do not be hurry to take a profit. You know you are right, because if you were not, you would have no profit at all. Let it ride and ride along with it.
You should protect youself by selling your stock before the loss assumes larger proportions. The speculator has to insure himself against considerable losses by taking the first small loss.
It is foolhardy to make a second trade, if your first trade shows you a loss. Never average losses.
When the margin call reaches you, close your accont --- never meet a margin call.
Keep cash reserve. Never make any trade unless you know you can do so with financial safety. I recommended parking fifty percent of your profits from a successful trade, especially where you doubled your original capital. Set this money aside, put it in the bank, hold it in reserve. The single largest regret I have never hand in my financial life was not paying enough attention to this rule.
5. Pivotal points --- I become a buyer as soon as a stock makes a "new high on its movement, after having had a normal reaction". Major pivotal points can often be accompanied by a heavy increase in "VOLUME".
6. Trend following -- Susscessful traders always follow the line of the least resistance. The trend is your friend.
7. Watch the market leaders, the stocks that have led the charge upward in a bull market. Trade the leading stocks in the leading groups. Behind these major movements is an resistable force.
8. Observe sister stocks --- Understanding industry group action is essential to successful trading. The most intelligent way to get one's mind attuned to market conditions and to be successful is to make a deep study of Industry Groups in order to distinguish the good groups from the bad: get along of those which are in promising position and get out of those Industry Groups which are not.
那麼 if I am my friend 我會怎樣安排自己有限的資產，才可以在香港和太太提早退休並活得開心呢？首先，如果靠100萬cash退休慢慢咬，現時通漲嚴峻，可能10年唔夠已咬完， 未來生活費毫無保障，不可行。我會將自住樓放租，每月可create（減去管理費和差餉)約$9000的現金流，加上國內租金約$3500，每月可以 有$12500 淨 cash flow收入。手頭上的100萬我會買入一層約400呎兩房的南丫島村屋自住，南丫島空氣好，有沙灘，近中環，是地球村，可以結識不同種族的朋友，又唔駛 交管理費，是退休的好地方，請參閱我之前的blog文。$12500減去$3500兩個人食用和電費，夫婦兩人可有$9000零用錢，settle 咗之後我會賣掉國內樓（回報太少）再買多一層南丫島或西貢350呎村屋收租增加每月現金流。至此，自住一層，另有兩層香港樓收租，兩個人的基本生活費已解 決。
提早退休唔駛返工大家可能應為好正，但其實最正係有份part time job，一個星期最多返三日，其餘四日可以自由自在在pacific coffee 嘆下mocca睇下書寫下blog，在Ikea揀下聖誕裝飾佈置下屋企etc., 最重要的是這一份part time job 並不是用來support your living，而是賺錢買花帶，男人則用來買玩具，所以返工是毫無心理壓力，放工拍下屁股走人，唔鍾意這份工可以換過另一份工，你話幾正。而且有份 part time job 可以另你重新跟上社會節奏，唔會無所事事在家裹發mould。我現時都有一份part time job，一個星期三天在舊部門做一些食物化驗的工作，而太太則在銀行幫手。其實香港已和日本一樣很多工種已有part time job，你只需要在agency登記，有合適的工作就會找你返工，一般$40至$50圓一個鐘唔難揾到。但你一定要放下身段，不要掛著以前自己的威水史， 時常remind 自己你己經提早退休，現在只是賺錢買玩具，則輕鬆自如，活得開心自在。
I have positions in UnitedHealth (UNH：US) mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company which stock is mentioned in this article.
Investors are always reminded that before making any investment you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not considered on as a formal investment recommendation.
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.
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?