Optimization Design And Application Of Stock Selection Model Based On Value Investment Theory

Chinese capital market started from 30 years ago,progressing from nothing to the present flourishing,with a rapid developing speed.These 30 years,at the very beginning,Chinese capital market only had a dozen listed companies,but now,it has 3000 and more listed campanies and the total market capitalization has rised to the world second.However,compared with the Western developed mature securities market,althought Chinesesecurities market has a rapid development,there are still a lot of aspects that are not mature or perfect.At the same time,Chinese securities market,which has far more non-professional investors than the professional investors compared tothe developed securities market.These non-progessional investors usually have less resource,energy,experiences,capital,that may cause the difficult to obtain a higher return on investment.How can non-professional investors in China be able to choose more valuable and potential stocks through a more professional and scientific approach in such a capital market which is not fully effective?This article provides them with a set of professional but not complicated stock selection strategy.Based on the theory of value investment from Benjamin Graham and Warren Buffett,this paper first introduces the relevant definitions and main points of value investment,and then points out that value investing is still on a qualitative analysis level in the current Chinese market,or just using the theory to analyze some single stocks,did not form a system of mature value investment strategy.On this basis,this paper designs and optimizes the stock selection model based on the theory of value investment,that is,divides the system into three factors:valuation,financial quality and financial growth,through collecting the data of listed companies in many aspects.The model at first will figure out the market position of listed companies,operating performance,sustainanle development and other aspectsthough a comprehensive analysis.Then the model will distinguish the different indicators and different market environment to get more meticulous and effective results.Integrating the two aspects results,this paper gives the most comprehensive and detailed analysis of the results,digs out a series of most effective and robust factors.Then,the model based on the different level of effectiveness and robustness of every factor,gives them different weight.At last,building the multi-factor model,scoring,choose the underestimated stock.This paper first analyzes the data from the past decade,that is,the data from 2006 to 2015,and then the stock selection strategy will be applied to the investment in 2017 and beyond.Based on the theory of value investment,the active stock selection strategy is more suitable for non-professional investors.On the other hand,it can promote the healthy development of China's securities market and promote the further integration of the real economy and financial market.For me,I really hope the development on the stock market can help realize he meaning of the the financialmarket and accelerate the development of whole social and economic.