What Are Investor Shares?

Stock investors are also called "stock subscribers." Institutions and individuals who invest in stocks. The supplier of funds to the stock market and the issuing company. In China, it mainly includes the public, enterprises, non-bank financial institutions, institutions, and social organizations. China stipulates that civil servants at or above the county and division levels may not buy or sell stocks; foreign companies, foreign financial institutions, foreigners, etc. may not buy or sell A shares; domestic Chinese-funded institutions and individuals may not buy or sell B shares. ^[1]

Stock investor

Right!

Stock investors are also called "stock subscribers." Institutions and individuals who invest in stocks. The supplier of funds to the stock market and the issuing company. In China, it mainly includes the public, enterprises, non-bank financial institutions, institutions, and social organizations. China stipulates that civil servants at or above the county and division levels may not buy or sell stocks; foreign companies, foreign financial institutions, foreigners, etc. may not buy or sell A shares; domestic Chinese-funded institutions and individuals may not buy or sell B shares. ^[1]

Stock investors refer to institutions and individuals who buy stocks for the purpose of obtaining dividends and capital income, mainly including individual investors and institutional investors.

Rights of stock investors

When we buy stocks, we are shareholders of the issuing company. Common stock shareholders have the following rights.

(1) Profit distribution right

The company's surplus is distributed in proportion to the shares held by shareholders, which means dividends. However, shareholders must understand that the company does not distribute all the company's profits for one year in proportion, but after deducting various retention and provident funds, it distributes the remaining profits evenly to shareholders.

(2) Option

Also known as the IPO option. When the company issues new shares, when you also own the company's shares, you have the right to purchase new shares first. The purpose of this right is to maintain that the original shareholder's shareholding ratio will not be reduced unwillingly by the issuance of new shares.

(3) Voting rights

When the company holds a general meeting every year, the shareholders of the company that issued the stock have the right to participate and have the right to vote on major issues of the company, which indirectly affects the company's operating decisions. right.

(4) Residual asset distribution rights

After the company is dissolved and liquidated, if there is any remaining property, it shall be entitled as a shareholder to distribute according to the shareholding ratio. However, it must be noted that the remaining assets are first repaid to creditors, then given to preference shareholders, and the rest are distributed to ordinary shareholders.

(5) Other rights provided in the company's articles of association

Such as the right to control shares and the right to check books.

Obligations of stock investors

(1) Obligation to comply with the articles of association

As the shareholder is part of the owner of the company, in order for the company's business activities to proceed smoothly, it must abide by the relevant provisions of the company's articles of association and exercise its rights under the constraints of the articles of association.

(2) Undertake operating risks and bear limited liability for company debt

Once the company loses money or declares bankruptcy, it should be directly liable for the company's debt. But this kind of responsibility is limited, and it takes the proportion of shareholding as the limit of its responsibility. In other words, the liability of shareholders to bear the company's operating risks is limited to the amount of capital contribution. If you hold 1,000 shares of the company, but the company is not doing well, your worst case at bankruptcy is that the value of 1,000 shares of assets is zero and becomes waste paper, but you don't need to pay extra money to pay off the debt. This limited liability system has removed the doubts of the majority of stock investors and promoted the development of the shareholding system and the stock market.

(3) Non-refundable obligations to bear equity

As the company's operating capital, share capital needs to be used for a long time. As long as the company does not dissolve or fail, the share capital will always exist in the company and cannot be returned to you. If you want to cash out the shares you hold, you can only resell the shares in the circulating market. You cannot withdraw funds from the company and damage the interests of the company and other shareholders.

Six common problems with stock investors

There are many problems with stock trading. The trading methods brought by technical analysis are more likely to cause traders to lose control of their emotions than fundamental analysis. Moreover, technical analysis transactions are mainly short-term transactions. For most readers of this book, Not enough time and energy to deal with short-term transactions. For the above two reasons, we only introduce the tips of fundamental investment in this book, specifically the tips of value investment methods that have been tested for decades. Therefore, we will not talk about the common mistakes made by technical analysis traders here, but only the basic common mistakes made by traders.

All errors can be attributed to lasting and temporary. Generally speaking, temporary errors are often not well avoided, which is related to occasional psychological states and external emotions, and lasting errors often come from wrong ideas. . We have already said that the wrong investment concept can lead to wrong behavior and thus bad results. So what are the common misconceptions in investment? Let's go through them one by one.

First, a characteristic of value investment is that it does not bring short-term profiteering, nor does it pursue short-term profiteering. But the vast majority of investors believe that there is a way to continue to make huge profits, and many stock critics and media are also rendering many legendary stories, but these legendary characters usually have no following, or after a few years of gloom . The secret of value investing is that compound interest exerts great power, which requires investors to have patience and long-term vision, but the problem is that most investors do not have long-term vision and lack sufficient patience. They always want to fish. A big ingot. It is because of their illusory profit goals that they have made irrational transactions in order to pursue high returns, such as heavy storage transactions, according to rumored transactions, and chasing hot spots, which will greatly increase transaction costs, affect transaction sentiment, and endanger rationality Transaction judgment.

Second, history repeats itself. This is one of the fundamental prerequisites of technical analysis, and it is also the reason why value investors do not believe that the so-called "new economy" will bring about different reasons. Every madness in the stock market in history is closely related to the so-called "new era", such as the Internet bubble in 2000. People tend to forget history, which is harmful. There is nothing new under the sun. When investing in value, you must look into the past. The past of the stock market and the past of the company can only be invested well if you look at the entire process from a historical perspective. Make investment decisions.

Third, I buy stocks of a company because I like the products or services of that company. Many people have a one-sided approach to Buffett and Peter Lynch. The two masters emphasized that the pursuit of products is a prerequisite for investment, but it does not constitute a sufficient condition for investment. Like a product of a listed company, it is only the first step in stock selection, and financial and company operations analysis are needed to determine whether a company has a sustainable competitive advantage. Then, the relationship between stock price and company value is reasonably judged. Only then can a decision be made as to whether to buy a person or keep it.

Fourth, value investors usually choose to enter the market when there is panic. It is precisely because of the panic of the crowd that the stock price is far below the value. This is the opportunity for value investors to buy people. However, human nature makes the herd the most comfortable choice, so it is often very difficult for investors to buy boldly or continue to hold stocks when the market falls sharply. Therefore, when the market panics, following panic is often a common problem for investors. People abandon me, this is the way of value investment.

Fifth, Eliot's wave theory and Gann theory and the Galaland spiral calendar bring many investors an unrealistic idea that it can determine the top and bottom of the market. In fact, these theories themselves only provide a probabilistic tool, and they are not suitable for prediction, let alone use these theories as tools for entering and exiting. Most value investors scoff at these theories. We don't despise them so much. According to our practice, these theories do have a certain degree of usefulness. They can remind some of the key turning points, but they cannot be used as a basis for decision-making. These theories fuel people's "capacity fantasies", making traders think they can buy near the lowest point, sell at the highest point, and chase price fluctuations. It is difficult to do this in the long run, and it is easier for those technical traders who follow long-term trends than those who chase short-term fluctuations. Whether you use technical analysis or basic analysis, be sure to avoid a "capability illusion", that is, you can accurately predict the turning point of the market. Always have room for your own judgment and make room for fault tolerance in your decisions.

Sixth, think that value investment is to buy a good company, regardless of its purchase price. There is not much difference between investment and commodity trading. When you buy a laptop for work, you generally consider three issues: first, how is the performance and configuration of the laptop itself, which is equivalent to examining the "asset value"; second How much utility this laptop can bring to your work and how much value it creates is equivalent to examining the "value of future earnings". Third, what is the current selling price of this laptop. You buy a computer only when it is cost-effective enough. It's the same decision-making process as buying a company's stock. However, several investors make securities buying and selling decisions in accordance with this analysis process. Fourth-rate investors only follow the trend regardless of the price and the quality of the company; third-rate investors only look at the price, regardless of the quality of the company, and pick the cheap junk stocks; second-rate investors only pay for the quality of the company, regardless of the stock price, and often buy At a high level; top-tier investors need to look at both the quality of the company and the stock price, looking for high-quality, low-price investment opportunities.