Fund

Do Crash-Escaped Stocks Have Investment Value?

“Hi, fund manger , it’s time to rethink your position!”

9.2%

You have to know ...

the most dangerous market !

Chinese capital market is defined as

U’ll experience a

7%big crash once a day !( )

What a F**king country!

What kind of stock should a fund manager choose?

So,

Pool of all Stocks

1#Divide into two groups

Fall?

yes

>8%?

yes

no

Over-sold

Crash-escaped

2#Expectations

1. The over-sold stocks will rebound, according to “Law of the Mean”.

2. The crash-escaped stocks have investment values, as they didn’t fall with the market.

3#Empirical Test

, , ,( )i t f i i m t f i tr r r rα β ε− = + − +

To kick out the high earnings caused by the high risk,We use α to evaluate the earnings

α stay, β get out

1. The over-sold stocks will rebound, according to “Law of the Mean”.

2. The crash-escaped stocks have investment values, as they didn’t fall with the market.

Remember?“ “

The empirical test shows

1 is correct, 2 is incorrect.

4#Turnover Comes

Divide crash-escaped stocks into three groups

High turnover rateMedium turnover rateLow turnover rate

Surprise!

5#Something about α

α is trustable

6#A real crash-escaped

stock with low turnover

7#Thank you for watching us , wasting your time

to look at our ppt is our pleasure!!!!

Have or not!!!!!