Chapter 156 How to Control the Drawdown
Junshi No. 1's retracement today was not large, while Wan'an Technology suffered the largest intraday loss of 144,000 yuan. The overall retracement of the fund was less than 0.5%.
This is why Xu Jianqing dared to joke about expecting an all-out decline, because the positions are well controlled and the retracement rate is quite small. This also shows everyone's confidence and fearlessness of a decline.
After the end of this week, the total scale of Junshi No. 1 has reached 47.7297 million yuan, with a holding value of 22.4329 million yuan. The fund's yield has reached 19.32% so far, still maintaining a terrifying growth rate.
For every investor who wants to invest in A-shares for the long term, growth and retracement rate are unavoidable topics, and how to maintain stability or outperform the index returns when the general trend is rising.
When the general trend is downward and individual stocks are inevitably affected, the retracement rate can be controlled to a very small extent. This is not as simple as simply adjusting the portfolio and changing stocks.
In his past and present life, what Gu Junhao was most proud of was not his own gains, but his ability to control the drawdown rate very well. Whenever the index fell sharply, Gu Junhao was able to control the losses within the minimum range.
Of course, achievements in this area cannot be achieved in a day or two. At the beginning of stock trading, Gu Junhao also had huge daily and monthly retracements. After some lessons, he gradually learned his lesson.
In order to control the retracement rate, the first thing you must do is to be very familiar with your own holdings. Gu Junhao never buys sectors and stocks that he is not familiar with.
Someone once recommended stocks to Gu Junhao. It was not a misleading recommendation, but a sincere recommendation after everyone got to know each other. The final increase was able to reach a certain level, but because he had never been exposed to a certain market or sector and was not familiar with it.
In this situation, Gu Junhao would not buy in anyway. He might try investing a small position for the sake of face or because of interest, but he would definitely not invest heavily.
No one is perfect, and everyone has their own blind spots in knowledge. Only make money from what you are familiar with and stay away from things beyond your understanding. This is the first principle for everyone to survive in the stock market.
The second point is to maintain the liquidity of your positions. No matter what the situation is, you must have a certain amount of funds available. Even if you are fully invested, do not buy stocks that are starting to rise in the same time period.
Assuming that the position is in a fully invested state, and there is a half-dead stock in the position, when some other stock starts, this fund can also be used.
Taking the existing fund positions as an example, if retail investors are operating, like in the previous few trading days, when Xibu Securities was half-dead, they could sell part of the Xibu Securities to do T in Dafu Technology, and then buy back the Xibu Securities, and they would not lose much.
This is indeed much less than the profit gained from going all in on Dafu Technology, but this approach is safer. Money can never be earned enough, but money can definitely be lost.
On the premise of ensuring the safety rate, there is also a considerable profit margin, which will make you feel at home in this market. So if the funds have reached a certain level and you don’t want to waste your funds, but are afraid of the ups and downs of your positions, then buy some stocks with stable returns, such as the three major bank stocks.
Of course, these stocks can only be held with confidence when they are relatively stable or at a low level. It will not work if they are at a high level. No matter what stock it is, once it reaches a certain position, it will definitely pull back.
This is the third point, the importance of waves. The bear market in A-shares is long and the bull market is short. If you can make good use of the timing of the transition from bull to bear market and reasonably enter into wave operations, the rate of return will still be considerable.
Let’s take bank stocks as an example. Not to mention the three bank stocks with the best growth, let’s take the relatively stable China Construction Bank. At present, its stock price has been maintained in the range of 3 yuan to 5 yuan for a long time. If you can make reasonable use of this range, even if the rate of return on each band is only 5%, and you operate it two or three times within a year, plus its annualized cash dividend rate of about 5%, the annual rate of return is about 20%.
This rate of return has been able to steadily outperform most groups, which is actually very good. Unfortunately, most people cannot stand the loneliness of this small band and cannot really calm down.
"Okay, another week is over, and we can have two more days of rest." Gu Junhao looked at the three people with a smile.
"This is the good thing about being a trader. Although you have to work overtime occasionally, most of the time you have normal weekends off." Liu Tingting said with a smile.
Gu Junhao deeply agreed with what Liu Tingting said. Ningbo is a fast-paced city with a private economy as its main body. For most industries, it is quite difficult to find a job with two days off a week and a decent salary.
"If you ask me, it's better for the stock market to be open every day. It's boring to stay at home. The weather is so hot and there's nowhere to play." Xu Jianqing said indifferently.
"You won't say that when you have a girlfriend. Besides, how hot can it be as hot as your hometown?"
"Okay, you guys go back first." After saying that, Gu Junhao also walked out of the trading room. It was already past half past five. After Gu Junhao took a look around, he returned to his office.
It was past get off work time and it was the weekend again. Apart from the two people from the Finance Department who were still working overtime, only Xu Yan from the Market Intelligence Department was still in the office. Even his assistant Li Xinyu had left.
Not in the mood to work, Gu Junhao took out his personal mobile phone from the drawer of his office. After turning it on, various messages flashed on his WeChat.
The people added to this phone are some friends from before I started my company, as well as the fund's client base. These people also know that they usually don't have time to reply to messages during market opening hours.
Most of the messages sent are similar to leaving messages. In fact, Zhang Yiru sends the most messages. When she is free from work, Zhang Yiru will send messages to Gu Junhao from time to time. Today's message mentioned that she should not forget to go to the furniture store together tomorrow.
"It's so hot, oh." The decoration of the new house has been completed, and we are just waiting to buy furniture. I have been there once before, but because I was too busy and the weather was too hot, Gu Junhao really didn't want to move.
After dealing with some messages on the phone, he replied to all the messages that needed to be replied to, casually flipped through some chat records including those of the fund client group, and then Gu Junhao flipped through his circle of friends.
"When the adjustment begins, should we build a double top to sell, or sell directly? I prefer the former."
Seeing this message, Gu Junhao couldn't help laughing. This nonsensical text on the Moments was posted by Su Mingyu, but Gu Junhao could understand that he must be talking about Dafu Technology.
It seems that it has not been sold yet. This guy is really patient and has made great progress. During the past year or so of contact, Su Mingyu's mentality has been very stable. He used to be limited by expected problems and would feel at a loss after the expectations were met. This problem is no longer there.
The overall situation was slowly opening up. After thinking about it, Gu Junhao gave him a thumbs up. Some things cannot be said too clearly, but private communication is still unavoidable.
…
On the weekend, Gu Junhao still couldn't resist a woman's enthusiasm for shopping, even on a hot day; he accompanied Zhang Yiru to shop in the furniture mall for two whole days, from Beicang to other surrounding areas and the city.
"I think it would be better to wait until the weather is cooler before buying furniture. We haven't rented this house for long anyway, and the smell needs to get out of there. Wouldn't it be a good idea to wait until the end of the year to officially move in?"
"It's correct to move at the end of the year, but it won't affect our furniture shopping. This is only our second time looking."
"Well, nothing can stop you women from shopping. You won't get heatstroke anytime soon." Gu Junhao said with a wry smile. However, he did gain something in the past two days. Some of the furniture he liked had already been ordered, and he was just waiting for a time to deliver it.
This aspect has to be handed over to Zhang Yiru. Her working hours are now much more flexible than before, and she can take leave to go out during normal times, so receiving the furniture is not a problem.
"Don't get heatstroke. I will try to reduce the time I spend in the trading room next week. If you need anything, please remember to contact me in time and let Li Xinyu call the internal phone of the trading room." Looking at his enthusiastic lover, Gu Junhao said patiently.
The weather in Ningbo in July is extremely hot during the day, except for the slight coolness brought by the sea breeze at night. Although it is by the sea, there is little rain in summer. Only when the typhoon season comes will there be rainfall to lower the outdoor temperature.
"Don't worry, it's okay. I don't have to move it myself. I just need to receive instructions. I won't be outside for long. Besides, the workers are not afraid, so why should I be afraid?"
"Can you compare with them? They have been doing outdoor labor for a long time, so their resistance is much stronger than yours. But it's always right to be nice to others. Remember to prepare enough cold drinks to cool down. If you find someone showing signs of heat stroke, remember to send them to the hospital immediately."
"Don't worry, I know this. After all, I am in the service industry. How could I not be aware of these looks?"
"Come on, you are not in the service industry, you are a vulnerable group."
"Go to hell, you're slandering us again, you're just a little black guy, you slander me from time to time."
…
Monday, July 7, 2014, a new week.
After a busy weekend, Master Gu still has to come to the company. Fortunately, there is a comfortable environment here and he doesn’t have to be exposed to the scorching sun outdoors. The employees speak nicely.
Last week, since Monday, June 30th was also included, the overall return of the fund was very good. Judging from the ranking of private equity funds, Junshi No. 1 has now climbed to the second position. The first place is still the one at the end of last month, and it continued to perform well this week.
Excluding some stocks that were liquidated, the fund's holdings performed very well last week. Yinzhijie rose 12.58%, Wan'an Technology rose 5.11%, and even the rookie Xibu Securities rose 0.65% in a week. Only Dongfang Wealth ended with a weekly decline of 3.20%.
Tong Huashun, which is privately held by Gu Junhao and is in the same sector as Dong Fang Wealth, performed much better than Dong Fang Wealth. Tong Huashun finally rose 1.29% for the week.
"Boss, why does your arm feel a lot redder?" Liu Tingting is a girl after all, and she is much more careful than the other two.
"Sunburned." As there were many outdoor activities over the weekend, Gu Junhao couldn't bear to let Zhang Yiru be under the scorching sun, so he went out himself. Her fair and tender skin had not recovered yet after two days of exposure to the sun.
"Sunburn? You're still going out to play in this hot weather, boss?"
"What are you doing? You're shopping for furniture and running all over the city."
"Boss, are you moving to a new house? Will you treat us to a warm-up party?" Xu Jianqing said with a smile.
"No, buy some furniture first. If you are going to have a banquet, you have to bring good gifts. Naturally, you will be indispensable at that time." After all, he didn't have many friends, but he could really invite these three people to warm up the new house.
"Hehe, of course. I'll buy you a good mop so that you can use it more easily in the future."
"You kid, you are really getting braver and braver." Gu Junhao pointed at Xu Jianqing with a wry smile and said, this kid is really brave sometimes.
In the call auction, the Shanghai Composite Index opened lower and the ChiNext Index opened slightly higher, but still failed to pass the five-day line, and there is a risk of the high point moving down.
The performance of the four holdings was different. Wan'an Technology opened flat, Xibu Securities opened one cent higher; Dongfang Wealth and Yinzhijie continued to open low, and the call auction trading volume remained sluggish.
The funds controlled by Dongfang Wealth and Yinzhijie are definitely at a super high level. The fact that these strong stocks in the early stage continue to maintain a state of adjustment also fully demonstrates the attitude of big funds towards the market.
"Don't rush to buy today, let's wait and see." The result of the call auction made Gu Junhao a little alert.
"Okay." Several people responded in unison.
At 9:30, official trading began and individual stocks performed very poorly; the Shanghai Composite Index fluctuated back and forth in a range of less than 10 points, and there was no sign of support for heavyweight stocks.
As for small and medium-sized enterprises, major concept stocks, especially GEM stocks, whether they opened high or low, most of them showed one trend, that is, downward fluctuations.
"Dongfang Wealth's rebound last Friday was really a false one. Today, it didn't even dare to open high and touch the five-day line. It opened low and continued to fall." Xu Jianqing was not concerned about Yin Zhijie's trend, but was concerned about Dongfang Wealth's trend.
Last Friday, Dongfang Fortune was the only stock in the fund's holdings that turned green, allowing the fund to remain in the non-green state throughout the day.
"It turned out that the boss was right not to let me do this last Friday. Otherwise, given the situation today, I would have had no choice but to break even and run away." Wang Ruoyu nodded.
Dongfang Wealth also represents the trend of the ChiNext Index to some extent. Like Dongfang Wealth, the ChiNext Index has continued to fluctuate downward since the beginning of the morning session. The opening point of 1411.99 is the highest point of the day at that time.
In fact, to a certain extent, whether it is an individual stock or an index, the opening position represents the performance of a stock for the whole day. For example, for an individual stock, after half an hour of volatility, the opening price is still the lowest price of the day. At this time, you can actually build a small position in a better position to try to buy at the bottom.
If the opening price is the highest price, and if it can fall quickly, there is still some opportunity to buy at the bottom, but if it fluctuates slowly downward, you have to be especially careful at this time. If you really want to buy at the bottom, you can only wait until the end of the trading day.
