Teaching You to Trade Stocks 8: Investing Is Like Choosing a Gigolo — Center on the G-Spot, Reject ED Men!
2006/11/20 12:00:31
Chinese people love to speak in inversions. Gigolo — the "face" is certainly not the priority. When choosing a gigolo, you look at the face first, but ultimately what matters is the "goods." What are the "goods"? It's "center on the G-spot, reject ED men!" This is also this ID's golden rule of investing. People who use investing to con others always love to spin myths about "faces." Things like fundamental face, technical face, psychological face, capital face — this face and that face — they're all like a gigolo's "face," merely pretexts for getting to the "goods." Without the "goods" of "center on the G-spot, reject ED men!" what's the point of all these faces?
The outcome of investing is simple: just two possibilities — "win" or "lose." All theoretical tricks about investing attempt to eliminate the "lose" outcome by controlling some kind of "input." Therefore, every related theory must be founded on this logical assumption: that input and output are connected by some necessary logical relationship and causal chain. This assumption is equivalent to saying "a gigolo's face and his goods have a necessary logical relationship." If this could hold, then handsome men would always have surging G-spots, and rough-faced guys with big beards would always be non-ED men. Go out and inspect a few gigolos to see how absurd such assumptions are. However, in reality, attempting to skip the "face" and go straight for the "goods" is equally an absurd fantasy. Even though "face" and "goods" have no necessary connection, reality still requires going from "face" to "goods." Those who attempt to negate all "faces" and go directly for the "goods" and the G-spot have simply mistaken some "face" for the "goods." Such people are deceived their whole lives without knowing it, like treating "moaning decibels" as the indicator of climax — equally laughable.
In the investment field, no theory can describe this necessary relationship from "face" input to "goods" output, because such a relationship simply doesn't exist. But as long as people participate in this investment game, their participation must proceed in some manner, and correspondingly, there must be some theoretical or belief foundation behind it. And precisely because nothing is absolutely correct, it paradoxically makes comparison between various theories and belief foundations possible. Any good investment theory ultimately faces only the "goods," just as a good gigolo must ultimately prove his excellence through the vigor of his G-spot. Correspondingly, the most important indicator in investment markets is the degree of climax. A market that has been without climax for a long time is like a eunuch without a G-spot — not worth any attention. Expecting a eunuch to become an excellent gigolo is a priest's job, and the investment market doesn't need priests. For a market to enter the investable horizon, it must first show signs of a G-spot stirring — otherwise, go cool off somewhere else.
The world is never short of men whose G-spots are stirring to serve as gigolos; likewise, in the world's overall market system, there are always markets whose climaxes are stirring. But most retail investors love to hang around eunuchs, thinking eunuchs are safe because they have no aggression, thinking markets that have been without climax for a long time must be safe. How many people have thus watched an empty bedroom, wasting their youth, watching and hearing others climax endlessly, until they finally can't bear the loneliness and swing to the other extreme — throwing themselves at any climax they see, dying like moths to flame. This ID once said: "Play stocks the way you play men, trade stocks the way you make love." Playing men, making love — ultimately it's all about achieving the climax, about extracting yang to nourish oneself. Investing is the same: through the market's climax, you harvest its profits — extracting gains to nourish yourself. Sadly, most people in the market end up being the ones whose yang gets extracted. How laughable, how pitiable. To extract yang without being extracted yourself — this is the first rule of the gigolo game, and the principle in investment markets is exactly the same.
Extracting yang: too ripe won't do, too raw won't do either — you must master the timing. When yang is born, there must be a stirring. You must wait for the stirring before entering. Specifically for stocks, dynamically classify all stocks by whether they're stirring or not: one category is "doable," the other is "not doable." Restrict your participation to stocks within the doable range. Regardless of circumstances, this principle must be followed. Of course, the classification criteria for "doable" can vary from person to person. For example, a breakout above the 250-day moving average and the volume resistance line on the weekly chart; for those with smaller capital and decent short-term skills, you can change the 250-day to 70-day, 35-day, or even the corresponding moving averages on 30-minute charts; for new stocks, you can use the first-day-of-listing high as the standard; additionally, stocks approaching the safety line — for example, in the sixth installment, the safety line standard this ID gave for entering call warrants paired with put warrants; and for those with some skill, identifying various bear traps and entering through bear traps is an excellent method. This approach is somewhat more professional, and we'll discuss it specifically later.
Men come in only two types: doable and not doable. Markets also come in only two types: doable and not doable. What must be insisted upon is that the not-doable must never be touched regardless of circumstances, unless they meet some doable standard and automatically become doable — just like classifying men by ED, where an ED man can only enter the candidate pool for "doable" after his ED is cured. Once your classification criteria for "doable" are established, you must strictly follow the principle of "only do the doable." Sadly, such a simple principle can't be followed by the vast majority of people even when they know it. Human greed gives people an impulse to try to seize every opportunity, like wanting to strip every man on the street naked — such people are called "nymphomaniacs," and a "nymphomaniac's" fate in the investment market is guaranteed to be tragic.
In the investment market, once you've set your standard for "G-spot stirring" to define "doable," the results at least won't be ED men. The next step is to guard against "premature ejaculation." Here's the medical definition of "premature ejaculation": the most common symptom of male sexual dysfunction after impotence, the most common disease among ejaculatory disorders, with an incidence of 35% to 50% in adult males. In investment markets, the percentage of "premature ejaculation" correlates with overall market strength: in bear markets, this ratio is at least 80% or higher, while in bull markets, it's much lower, around 30%. Whether you're selecting a good gigolo or a good stock, filtering out the "premature ejaculators" is the most important and most difficult step. Many so-called experts die precisely at this step. This problem will be discussed in detail in the next installment.
Replies
缠中说禅 2006/11/20 12:09:30
Those who made money on the index but lost money in stocks — be patient. As mentioned earlier, this is only the first phase of the bull market. There will be plenty of opportunities ahead. Better learn the techniques first, otherwise dying without even knowing how you died wouldn't be ideal.
缠中说禅 2006/11/20 12:44:11
Don't substitute your imagination for reality. There are bull players in the stock market every year, and even more dead bull players. The market's first principle is survival. As long as you can still be alive 30 years from now, you'll naturally be the biggest bull player of all.
This ID, from 2001 to 2005, four years, never once looked at stocks. But from June 2005 onward, I look every day. When the day comes that this ID stops looking, you'd all better be careful.
缠中说禅 2006/11/20 12:44:51
Market's open, heading out. See you.
缠中说禅 2006/11/20 15:44:33
Article submitted by：耐心等待
How high does the host think the market can go?
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Making predictions is the job of stock commentators. This ID is only interested in making money. Besides, you can make money even when the market drops — why predict it?
缠中说禅 2006/11/20 15:45:29
[Anonymous] 罗锅
2006-11-20 15:31:06
10,000 points!!!!!!!!!!!!!!!!!! Charge!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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That's just a matter of time.
缠中说禅 2006/11/20 15:49:28
[Anonymous] 太阳没了。
2006-11-20 15:01:46
How come the sun in the blogger's signature is gone?
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It's there. Your computer has a problem.
缠中说禅 2006/11/20 15:56:37
Everyone take your time. Heading out now. See you.
缠中说禅 2006/11/20 16:00:45
If anyone reposts, please credit the source. It would also help lure more people here. This ID is never hypocritical — this ID certainly wouldn't mind if more people come here than go to that Confucius guy's place.
缠中说禅 2006/11/20 16:02:43
This isn't like the "Erta" commentary — I said that would be published as a book, so reprints are declined. But if you do repost, please credit the source to lure more people here. This ID is never hypocritical — this ID certainly wouldn't mind if more people come here than go to that Confucius guy's place.
缠中说禅 2006/11/20 16:03:37
Everyone take your time. Heading out now. See you.
缠中说禅 2006/11/20 20:18:20
[Anonymous] xof_fox
2006-11-20 19:10:44
May I ask the host: "As long as you can still be alive 30 years from now, you'll naturally be the biggest bull player." If someone survives 30 years but was miserable for the first 25 and only thrived in the last 5, does that count as a bull player?
Sorry, my question is a bit nitpicky.
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A bull player generally refers to someone riding the crest of the wave. In the investment market, total failure must never happen even once — once it does, you basically can't recover. Individual failures are permissible, but they can't affect the overall picture.
In the early days, a few tens of millions was enough to be a market maker. Now a few tens of millions doesn't even qualify as a big retail investor. In the investment market, one fall and you'll never catch up in your lifetime — you'll basically just be following along from behind. And following along from behind — that can never be called a bull player.
缠中说禅 2006/11/21 21:59:22
[Anonymous] 傻妞
2006-11-21 21:15:16
"Master Zen," after hearing your stock-Zen wisdom, I really admire you! But I'm still confused. I'm a beginner retail investor and I have a simple question: which line on the K-line chart is the annual moving average? Please don't laugh — I only know the 5, 10, and 20-day lines. Please advise! Also, when will the stock I bought, 东方金钰 (formerly G多佳, 600086), go up? Could you spare a moment to analyze it? Thanks, waiting for your reply!
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This ID is not a stock commentator. Talking about stocks is just one aspect of this blog, purely hoping that people who come here can learn something. Normally your question shouldn't be answered, because this ID is afraid that once I start answering questions, this place will become a consultation desk. But seeing your sincere request, this ID will make an exception this once. The annual moving average generally refers to the 250-day moving average, but it can be applied to charts of various timeframes — for example, minute charts, hourly charts, weekly charts, monthly charts, and so on. For how to set it up specifically, ask someone near you.
As for 600086 that you mentioned, it's already risen a lot — it pulled 8 consecutive months of bullish candles going from a little over 1 yuan to over 7 yuan, so a correction is perfectly normal. The key is your entry price. If you bought recently, you need to be prepared to weather the correction risk ahead. This ID can only tell you its current specific situation: its biggest long-term resistance is the 70-month moving average. In 2003, it touched that line and then fell from 13 yuan all the way to 1 yuan, so that line is the stock's most important long-term barrier, currently at 8.36 yuan, declining by 0.3 yuan per month. The mid-term key level is 5.9 yuan — if that level is effectively broken, the correction could be very deep. Currently, it can be viewed as box consolidation between 5.9 yuan and 7.2 yuan, and you can do short-term operations based on the box pattern — the so-called sell high, buy back low approach. Mid-term, wait for the breakout direction to be chosen.
But I still want to remind everyone: don't casually enter stocks that have already risen significantly. From the very beginning, learn to exchange the smallest possible risk for the greatest possible profit.
缠中说禅 2006/11/21 22:06:50
[Anonymous] 冰火
2006-11-21 22:05:15
But I still want to remind everyone: don't casually enter stocks that have already risen significantly. From the very beginning, learn to exchange the smallest possible risk for the greatest possible profit.
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I always thought experts only play the final parabolic surge. Didn't expect someone as great as the host to also be so risk-averse.
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For long-term success, you must insist on exchanging minimum risk for maximum profit. Risk comes first — there's no distinction between high and low here. Losses are calculated in percentages. Ten billion or one million — lose 100%, and it's all zero.
When others discard, I don't necessarily pick up; when others scramble, I definitely give it away.
缠中说禅 2006/11/20 12:07:13
The index hit 2000 this morning. Abandoning Confucius the Second for a day is only appropriate. Confucius the Second continues tomorrow.