Research On The Value Of Investment In The Biomedical Industry

The idea of "Rule No.1"(hereinafter referred to as "Rule No.1")of stock investment was first proposed by Benjamin Graham.This idea was successfully applied to the market by his student Warren Buffett.The American writer Phil Towne and the loyal practitioner of "Rule No.1" condensed it to 4M(meaningful,moat,management,margin of safety).The core principle of "Rule No.1" is not to lose money,and to obtain high returns with low risk.Its practical steps are mainly divided into two steps: one is to find excellent companies,and the other is to buy these excellent companies at low prices and hold them for a long time..This article uses “Rule No.1” as the investment method to study the investment value of the biopharmaceutical industry.The reasons are as follows: First,the domestic stock market often invests in listed companies in the biopharmaceutical industry.It can effectively circumvent this irrational behavior;secondly,the biomedicine industry has grown rapidly in recent years and has good growth;thirdly,it has a long period of patent protection and high returns after the new drug is listed.These constitute R&D "City Trenches" for enterprises;Fourth,R&D companies invest heavily in the drug listing process and have a long cycle,which is suitable for long-term investment by investors.The research of this article is divided into two parts,theory and empirical: the theory part is the introduction of the theory of " Rule No.1",and traces the theory to its main idea.The theoretical traceability is mainly divided into three parts: value investment,growth stock investment and market effectiveness.Among them,meaningful,safe borders,and calculated pricing come from value investment theory;city trenches,business management,and five important financial indicators come from growth stock investment theory;the view that market prices deviate from value but will eventually return can be achieved through market efficiency and behavioral finance To support it.The empirical part first analyzes the biopharmaceutical industry and summarizes the characteristics of the industry,screens the stocks in the biopharmaceutical industry through the "Rule No.1" and constructs a trading strategy,and proposes the investment route of the biomedical industry based on the "Rule No.1" theory: One is the selection of sample data,this article selects the financial data of listed biomedical companies;the second is the selection of excellent companies,through data export,data processing,five financial indicators screening and corporate analysis,etc.;the third is the calculation of security boundaries,Calculate the safety margin of the selected stocks;Fourth,long-term holding,that is,buy when the real stock price of the stock falls below the safety margin;finally calculate the earnings of the "Rule No.1" holding and compare it with the industry benchmark earnings over the same period Compared.The empirical results show that,according to the “Rule No.1” method,stocks are selected from biopharmaceutical companies and held for a long period of time,and their returns are higher than the industry benchmark returns over the same period.At the same time,the return curve shows that individual stocks are greatly affected by market fluctuations in the short term,and the advantages of long-term stocks are prominent Verified that the "Rule No.1" is effective in China's biomedicine market.This article supplements my country's stock market value investment strategy and has certain reference significance for investors.