The third of Technology and economics: about the stock market

The third of Technology and economics: about the stock market

Equity is the basic concept of doing business, and not only listed companies can calculate shares. For example, a restaurant is a partner for retaining a competent chef, and a fast-retiring restaurant owner transfers a stake to a successor.

Partnership management should be encouraged, and partnership is a postgraduate examination of credit and cooperation ability. Partners must communicate openly and resolve contradictions, taboo appointment relatives and cronies. It is said that Microsoft's two founder Bill Gates and Paul Allen had a great contradiction, the latter resigned but refused to buy back the stake at a low price. The film "Food for Men and women" describes the exchange of skills between chefs and the more common between people to communicate between the gap.

Investment banks ' participation is an important way for companies to get funds. Compared with the loan, the participation is more lenient to the company initiator, if the operation fails to pay the liability (unlimited liability). A bank invests in a single company at greater risk, but invests in multiple companies to hedge the risk (equivalent to insurance; Shakespeare's novel, The Merchant of Venice). The stakes in startups are more private, as Google's first investment in Stanford was a private investment by Andy Bechtolsheim, one of Sun's founders. Equity participation is also a partnership, a high demand for credit, but the quality of the population is the natural result of community education, can not be forced to correct, or use covert monitoring to ensure that these in the business environment is illegal.

It was a group photo of Google's two young partners Larry Page and Sergey Brin (whose name sounds like a hint) in 2003. By the way, Google has a slogan "Don's Be Evil", also seems to have been pointed out.

The company's limited liability, that is, when the company is bankrupt only by the company's assets to repay the debt, and do not trace the investor's personal property, should be applicable to small companies. This is because investors need to keep their possessions strictly separate from the company's assets, and business failures do not affect private life. Credit is also involved here. Each company should be able to declare itself as limited liability, the lender should be aware of the risks and, if necessary, require collateral. The name in English is "INC". A company (incorporated, unlike Coporation) may refer to an unlisted limited liability company.

Limited liability is the basis of stock circulation. Circulation does not necessarily mean trading in the Shanghai and Shenzhen stock markets, but in any trading place in the circle or privately. A larger range of circulation is called listing. Generally, the basic condition of listing is that the company has been operating as a partner for several years, and one of the participants should have authority (such as a bank), which is called the insurer (Underwritter). Even after the listing, the insurer holding a substantial share of the shares remains the guarantee of the company's credit. Whether the market recognizes the shares of a company, other than the insurer, is related to the reputation of the CEO and the technology leader and so on, so the stock market is of a circle nature. In the real-life IPO, Underwritter refers to the underwriting bank, which buys the company's shares at an agreed price and resell them to the market, usually enjoying a larger spread (markup). This kind of stock issuance is unreasonable, because the company has not been able to get all the money at market price, while insiders can buy shares before the IPO to enjoy huge profits.

Corporate finance is fairly easy after a stock is listed, and it is easy for equity holders (including investment banks) to cash in. However, not all companies like Internet companies want to be "big" and "strong", the boss may prefer to maintain a moderate size and the ownership of the company, in this case, the stake can only be in private transactions between acquaintances.

Stocks are valued according to potential yields and risks. Stock valuation requires knowledge, and knowledge clearly has internal and external, so stock trading is a circle. For example, when Google started a business, it was clear that the bank would need to explain its technology secrets to banks (and, of course, a nondisclosure agreement), and that after it was listed, most stock buyers were investing because they believed in their credibility rather than their technical secrets. However, the stock market has an accurate valuation in order to ensure the effective allocation of investment (high-priced to encourage the expansion of new shares, because more money per share), the company also needs the right valuation to assess the performance strategy, therefore, the stock market right valuation itself is extremely valuable. The stock market allows key players with a certain amount of insider knowledge to be priced in, and the company keeps them fully informed under the protection of confidentiality agreements, while ordinary shareholders can only follow the price, but they are able to understand the general workings of the company through public financial statements and public news, and determine whether the stock price is reasonable. It is actually a boon for a shareholder to actually enjoy the correct price tag, but this is something that the community's "representatives" deserve to do for the community, which does not benefit outsiders.

In the stock market, significant participants refer to institutional investors and companies or individuals with large stock assets. Institutional investors often play the role of "brokers", in the market to set up the price of the stock and the selling price, ordinary investors actually deal with them. When the market Outlook changes, different institutional investors may expect different, so there will be mutual trading and the respective adjustment of the position of the final price of the convergence. If a major shareholder is to throw or buy a stock in large quantities, he should announce it in advance so that other investors are prepared; otherwise he could cause stock market volatility and face unfavourable prices.

In a fully competitive stock market, participants are not able to influence market prices on their own, so it is impossible to manipulate stock prices for profit. "Brokers" profit by buying and selling when prices deviate from rational price fluctuations due to supply and demand imbalances. In reality, institutional investors with huge sums of money can affect stock prices. Therefore, the circle stock market should retain the power to allow traders to explain suspicious operations, or even drive them out of the market (the private transfer of shares is still permissible) (note that the value of the property should be taxed rather than the transaction itself; Levy a transaction tax is not conducive to small companies). In addition, shareholders should fully understand the stock market mechanism, the stock price has already included all expectations of the company, while the propaganda of the investors to buy a stock is illegal, the bewitched institutions will be expelled from the stock market, because if the agency can really say, it should make money, and the shareholders should buy its funds.

Smaller companies are apt to be accurately valued. For example, it is easy to estimate the investment prospects of a restaurant, but it is not easy to estimate the outlook for a restaurant chain. Also, judging whether a new software has a market is more real and interesting than judging the future of a big software company. Therefore, they should be split into small, independent companies, which also encourage competition. On the other hand, a similar number of restaurants or software companies that develop software for the same platform can be combined into an index fund based on the shares traded in the market, which can be listed in the name of "group" and raise funds externally. When the stock price is overvalued externally (ie, the internal share price is lower than the external share price), the insiders can sell the shares to outsiders, which is also a good time to expand the scope of the issue of new shares, and when the share price is undervalued, you can buy back the stock. Note that there is no management right here, and the internal stock price is determined by many investors in the circle, for example, the investment prospects of restaurants in different regions are estimated by investors in the region. This may be the origin of the name of the "mutual Fund" (mutual funds), and the fund can arbitrage on more accurate estimates of profitability, perhaps Warren the name of Buffett (Warren Buffet).

Fund companies are important players in the stock market, they are investors, to the shareholders they are convenient and can reduce the risk of investment vehicles. Since the fund company handles huge assets and earns profits from profits, I think each fund should be operated separately, in addition to the financial statements should be in the circle of shareholders to open the stock portfolio of detailed list. The purchase and redemption of funds is also traded in the stock market, but its price is almost unaffected by the amount of buy and sell. In order to facilitate the calculation, but also to prevent misappropriation of customer assets, in addition to the "rated" operating costs, the fund company can not be used to expand the scale of revenue. Its market capitalisation is strictly equal to the value of its stock portfolio (plus fixed assets), and the bid and ask prices should be limited to a small interest rate difference. Professional funds are targeted to specific geographical sectors, they must be knowledgeable and should be highly competitive, while more complex funds can include more specialized funds in their portfolios. The reputation of fund managers is also important.

Companies can hold stock assets, which are used to accumulate capital for an enlarged scale, and to prepare for a period of austerity. Cyclical fluctuations in the market are unavoidable, and companies may experience periods of prolonged excess, but the long-term outlook may not be bad. If the company is prepared, it will try to avoid layoffs and bankruptcies, and if many companies are prepared, they can prevent market volatility from triggering a global economic avalanche. Companies should invest in industries that have nothing to do with their industry or tend to move in the opposite direction, and it is best to see their stocks rise during their austerity period. Companies holding shares also often represent the affinity between each other. In many cases, institutional investor valuations tend to be bureaucratic (standardized), and the mutual assessment between companies is more professional. Companies holding shares are suitable for non-listed companies in social circles, and listed companies should raise funds by issuing new shares, and it is unnecessary to hold higher stock assets. However, if the professional institutional investors are absent, the company's general mutual holding shares can also play a role in leading the stock market price.

Technically, the company authorizes a bank to manage its shares, and all stock transactions, including hair shares and dividends, are passed through the bank. Stocks are like bank notes issued by the banks, and they do support a paper version (with a ticket to the bank to collect dividends). Shareholders should be able to deposit shares in their own bank account after the purchase, as in a foreign currency account. In the case of bearer shares, the company's banks only need to record the total number of shares held by each bank, and periodically dividends, and if a registered share is used, the company records each shareholder's information. In the case of registered shares, the company is able to send financial statements and promotional materials to shareholders to enhance shareholders ' understanding of the company.

Should be able to use cheques to transfer stocks or foreign currencies, which differs from regular cheques in the need to specify currency/stocks. It is convenient to pay by cheque to transfer shares privately, and to sign on paper cheques more formally, also leave the credentials. The bank should provide an envelope to facilitate the delivery of the cheque to be processed, and the delivery should also be done at the ATM machine. The buyer's private transfer of shares at negotiated prices avoids the loss of the market's bid-ask price. Such OTC transactions should be allowed, and the transaction itself should not be taxed, otherwise it would be unfair to small companies because of the large number of intra-firm transactions. Cheques can also be extended to cover futures by stating the delivery date (which can be processed immediately by the bank, but the payment takes place in the future). Paper cheques make it possible to participate in transactions without relying on computers or mobile phones, and of course banks should support electronic forms of cheque payments.

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The third of Technology and economics: about the stock market