Studies In Chinese Stock Value Investment Strategy

Stock Market is of great significance to resource allocation, investment promotion and enterprise development. At present, value stock portfolio is one of the most wildly-taken strategy, the core of which believes that stock market is not an effective market and can not reflect the complete information of the corporation in time, and therefore buying takes place when the inner value of the corporation is lower than the market value, with a certain proportion of safe margin; and vice versa.Based on the analysis of Stock Market Environment of China, this paper hereby explains the effect that the main factors can produce to the strategy of value stock portfolio. According to the divarication of the stock risk averse and the different comprehension of the growth, the value stock portfolio strategies are classified by finance report, and there are three of them– conservative, general, and positive.The study of this paper is mainly based on the yearly total issuing A Share of Shanghai Security Market from January 2000 to December 2005. Take Profit Rate<30, Flowing rate>2 and Net Profit Rate<1 as the classificatory standard of conservative strategy of value stock portfolio, and Profit Rate<10, Flowing rate>2 and Net Profit Rate<1 as general, and Profit Rate<30, Flowing rate>2 and Net Profit Rate<1 as positive. At last the value stock portfolio strategy, whose profit rate Per Stock >0.6,net capital profit rate>300%,net profit rate<1, is chosen as sample of the positive. From the study on the 6-years performance of value stock portfolio strategies, We can reach the conclusion:In the testing period of 6 years, the average accumulative extra profit of the conservative strategy and the positive strategy are higher than that of the general strategy, at a rate of 0.874405 and 0.93012. And the gaps are universal except for the first year. The average profit rate of the general strategy began to drop in the forth year, which lead to the rise of the risk of holding the same share for long term in China. Due to the immaturity of the stock market of China, there is certain amount of the irrational investment, as well as the frequent adjustment of the policy, The value stock portfolio strategy can not be taken directly into our country.