After reading AppleSimon’s article “利字當頭：給炒股學生的一點建議“, it got me interested enough to read the original article (see posted below). Simon’s discussions re 「集體負責」, Other’s People Money, and Principle-Agent problem are worth thinking about. What Simon and the original article did not talk about was some of the potential “structural problem” with the HKBU investment club‘s design/setup.
– “每股最少持有一個月” Questions: How often do they buy and sell the stocks inside the portfolio? Since they are “learning”, how do they resist the urge to actively do something to show that they are learning?
– “除設有主席、副主席外，另設四名分析員。” Questions: These positions, I presume, are picked/volunteered/elected? And are they changed yearly? Presumably, the chair person is the most senior student in the group? Again, the most fundamental issue I have with this is that many investments may take long time to mature and the lessons “learned” here may create a very short-term mindset, unfortunately, mirroring the many Hong Kong “investors”/gamblers. Again, I am not saying these students day-trade, but then an effective time horizon of “months” and, I am guessing, “around 12 months” is not a great idea.
– “避免學生養成炒賣習慣” Comment: Really? I guess it is all a matter of degree. To me, flipping stocks in the frequency that I suspect (but have no prove) is already “炒賣習慣”!
– “老師會充當顧問，確保每個落盤都緊守投資原則，而非短線投機。” Comment: Again, I am very curious how frequent the stocks are bought and sold in the portfolio? Here is a simple question: How many stocks in the portfolio have been there continuously for more than one, two, or three years? Any one investment that qualify?
– “六年賺22%，年均回報4%” Comment: Finally, and may be the least important of all in terms of learning. Even with the financial crisis, I thought there would be more investments that return more than an average of 4% per year? What is HK government bond’s return during those time periods?
For the record.