A shares will hit 5,000 points. This is not what I said. It is the specific point prediction for the A-share market in the 2021 Economic Blue Book released by the Academy of Social Sciences at the end of last year. Is the prediction of the Academy of Social Sciences reliable? Let’s take a look at the historical achievements of the Academy of Social Sciences. At the end of 2014, when A-shares were still at 3,000 points, the Academy of Social Sciences released a new blue book for 2015, which predicted that A-shares would exceed 5,000 points. The entire market was shocked. From 3,000 to 5,000 points, these 2,000 points There is enough room for a bull market in 2020. The result was that in 2015, A-shares went crazy and hit a high of 5,178 years.
At the end of 2018, when A-shares were in an extremely pessimistic bear market, no one was optimistic about A-shares. However, the prediction of the A-share market in the 2019 Economic Blue Book released by the Academy of Social Sciences has been confirmed. The spring of Chinese stocks is not far away. As a result, A-shares have experienced a slow growth in the past two years, and the GEM Index has increased by 1.5 times. , more than 100 stocks rose more than 4 times.
Do you think such an accurate prediction is false? What is the origin of this social institution? The Institute of Social Sciences is a comprehensive research center directly led by the Central Government and directly under the State Council. It is the top think tank in the country. It ranked in the top 20 among the top 50 think tanks in the world released by the University of Fania in the first issue, and has been ranked the strongest think tank in Asia many times. The Academy of Social Sciences will not easily predict the specific point 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 is it being released again after a few years a major signal worth paying attention to? So for us as individuals, how should we grasp this opportunity and risk? I hope the following content will inspire you!
I have been reading a book these days. The author has been operating in a stock trading community like Xueqiu for a long time. He has a deep understanding of the hearts of the majority of investors. It describes the group addiction to gambling. As long as money is involved in the game, it will produce an addiction to people.
There are nearly 160 million Chinese stockholders, and retail investors account for a very large proportion. Most people regard the stock market as a casino, chasing the ups and downs every day, and enjoy it endlessly. But I found that most of the old investors rarely make money. Why is this? Because betting itself is a game of probability. The question is, why do casino operators always win? There are actually very few gambling gods in real life. We hear more news that a certain entrepreneur was deceived into Macau or even overseas and lost everything. When it comes to arithmetic, few people are a match for the casino. The late Macau gambling king Stanley Ho and his family controlled as much as HK$500 billion in assets during his heyday. Someone once asked Mr. He what to do if gamblers always win? He once said a famous saying: I am not afraid that you will win, but I am afraid that you will not come. Then in his eyes, it is impossible for him to lose, because he is not betting on luck, but on mathematics.
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 advanced gamblers. It is a mathematical tool commonly used by top players. It is also the secret that casino owners are most worried about being exposed. So what is the Kelly formula? Let's first look at an example, a simple bet that pays 2 for 1 and does not include the principal. Toss a coin and place a bet. Assume that the bet is 1 yuan. If the coin is heads, you will win 2 yuan, and if the coin is tails, you will lose 1 yuan. Now your total assets are 100 yuan, and you can invest any amount in each bet. How would you bet? It is known that after placing a coin, the probability of heads and tails is 50%. The odds are 2 to 1, excluding stake. Well, in this bet, as long as you bet very patiently and continuously, we are putting aside the interference of the so-called unfair factors. You can actually make money, because the more times you toss a coin, the more likely it is that it will appear heads or tails. The more likely it is to stabilize at 50%. Right? The gain is twice as much, but the loss is actually only twice as much. So from a mathematical point of view, it is a sure-win bet. But unfortunately, the situation in the real world is more complicated than this, and deviations can always occur.
If you are an adventurist activist, you may think this way, if you want to play, just play with big tickets. I will go all in stud and put all 100 yuan up at once. If you are lucky, you can get it heads in one go. Get 200 yuan. Wow, you see how much I deserve to show off, right? But if you lose, you have to give up 100 yuan of assets to the other party, and you will have nothing.
If you are a conservative, you might think so. I'd better be careful and take it slow, 1% at a time, little by little. I only bet 1 yuan each time. I win 2 yuan if it's heads and lose 1 yuan if it's tails. I can afford to lose. After playing twenty games, I suddenly felt that the other party could win 20 yuan by betting 10 yuan once. I only won two yuan once, and it took 10 times to win 20 yuan. Wow, why do I feel like I missed hundreds of millions? I regret it so much.
The stock market often has this kind of problem. When you make a small profit, as soon as you hear that others have made a lot of money, you rush to get it and take the big one yourself. If you make a profit, you will feel disgusted as to why you didn't invest more. I lost money and regretted it. Why did I invest so much...
Only by investing in proportion can you get the maximum benefit? The average gambler may be confused if they are not good at math. But the Kelly formula can tell us a clear answer. After calculation (taking a coin toss as an example), the proportion of each bet is 25% of the total funds at that time, so that we can obtain the maximum benefit. So let’s take a look at the Kaili formula. The numerator on this formula represents a side of mathematics that we also call expected value. So what is the appropriate bet, neither more nor less? This formula tells us that by choosing the best bet ratio, we can obtain the highest profit in the long term. Well, let's go back to the example we told you at the beginning, that is, the probability of a coin flipping heads and tails 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, which is two yuan of profit divided by a loss of 1 yuan, and the odds are 2.
The proportion of capital we expect to bet on the answer to the pound will eventually equal 25%. From this, we can conclude that each time we use 25% of the current funds in hand to make a bet. Assuming that our initial amount is 100 yuan, the profit on the front side of the coin is twice the bet, and the bet amount will be lost on the tail side. We simulate and calculate the returns of 10 gambles, and we can finally find that the returns are equal. Note that the expected data of heads and tails of the coin has no impact on our final income results. Then we bet based on a betting ratio of 25%, and this income will basically show a steady growth trend. But assuming your betting ratio is 100%, if any one of the ten tails comes up, you will completely lose all your money and be directly out of the game. And the probability of tails every time is still 50%. And each time it is 1 yuan, that is, when the betting ratio is 1%, the mathematical return of 10 times is equal to 105. This risk is very small, but the return is too low.
If deduced in this way, the Kelly formula is actually the biggest winner. Every time a casino trader makes a move, he will keep this mathematical principle in mind, because this is his job. As an ordinary gambler, besides In addition to hoping that God would bless him, he actually had no idea of ??such a complicated mathematical principle. So even if you can get lucky occasionally, you can never win the Kelly formula. Almost all casino games are unfair to gamblers. But this unfairness is not because the dealer is cheating. Modern casinos rely on mathematical rules to make profits. In a sense, casinos are the most public places. If this were not the case, it would be impossible for Stanley Ho to live to a ripe old age before leaving. Even if he had nine lives, it would not be enough. He didn't imagine this formula out of thin air. This mathematical model has been verified on Wall Street. In addition to the theory of winning in casinos, it is also called a money management artifact in the asset management industry. Bill Gross and Buffett often use the Kelly formula to calculate their returns. 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 he should not place any bets. If you have to make negative bets in a game like gambling, then you might as well open your own casino and be the banker, right?
There are a few gambling gods in the world, and they are not Chow Yun-fat in Hong Kong movies. Among them are often mathematicians or inventors of sexual information theory. They can use a series of complex calculations and mathematical theories to bring the profits of these casinos back to more than 50%. They rely on their strong mental arithmetic skills to increase the probability. So if your math foundation is not very good and your mental arithmetic ability is average, then you might as well memorize these three principles.
The first situation is when the expected value is equal to zero, the gamble is a fair game, and we should not place any bets at this time. The second situation is when the expected value is equal to negative, and the gambler is obviously at a disadvantage, and he should not place any bets. Okay, then the third situation is that when the expected value is equal to positive, then betting according to the Kelly formula will make the fastest money and the risk will be the smallest. In fact, there is only one final conclusion. Do not bet all your wealth at any time. Even if the winning rate is relatively high, you still need to be cautious. This is why I tell you that you should not put all your money on any single stock, not to mention that we cannot add leverage to a single target. Then some people may say that I am not playing games with mathematicians, I just need to meet my opponents. But what's the problem? No matter you or the other party, in fact, everyone has to provide turnover to 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. It is very unlikely that modern casinos will pretend to be themselves. They all rely on mathematical theorems to make their own profits. So this Stanley Ho is not just proficient in mathematics. His son He Youjun is the youngest master of finance in the history of Massachusetts and has won the World Mathematics Test invitational award for two consecutive years. This is the family talent. In terms of rationality, no one can be more rational than the casino owner.
In terms of mathematics, no one can be more proficient in mathematics than the experts hired by the casino owner, but in terms of gambling capital, there are naturally few people who can have more money than the casino owner, unless you are Bill Gates or Musk? Then if you really want to win the layout of life, there is actually only one real principle.
The stock market will still open and close at normal times tomorrow. Can you really not bet?