“Within five years, there is no hope for the Chinese stock market. Anyone who buys and sells stocks in the secondary market (= securities exchange market) is a fool!”

"Subscription certificates, internal employee shares, bonus shares, these are the real opportunities to make money. In the final analysis, it is speculation on original shares."

“Why are jobs in technology companies so popular? Not only because of the high salaries and benefits, but also because of the equity incentive mechanism.”

"If you buy 100,000 original shares now, and the company goes public in two years, your net worth will be tens of millions!" On the podium, a stock analyst who claimed to be an investment guru gave an impassioned speech.

Then, he solemnly sold the original shares of a biopharmaceutical company to more than 30 investors present. He claimed that the company would be listed in the United States in two years, and the price of the original shares in hand would increase tenfold or eightfold at that time!

Kong Shiyan listened carefully and took notes by taking down key points from time to time.

She came here because she received a phone call, "Are you interested in stocks? This Sunday, our company will have a free stock review meeting. Famous analysts will analyze the situation of individual stocks and the overall market situation for you. You are welcome to come and listen."

Kong Shiyan thought, since it's free anyway, she might as well listen and watch more and broaden her horizons.

In fact, after coming here, she felt that this investment master was quite capable.

Many people know that cashing out equity can make you rich. However, she is unable to get the original shares of a company that is about to go public due to insufficient education, inappropriate major, or lack of opportunities. Now that she has the opportunity, she is very willing to give it a try.

As the saying goes, fortune and honor are achieved through risk.

"Don't be silly, he's a liar." A female voice sounded faintly, "If you believe him, all your savings will be swindled away and you will go bankrupt immediately."

Kong Shiyan was startled and subconsciously looked in the direction of the voice. She saw a man in a suit standing on the table, looking at her seriously.

I glanced around hurriedly, afraid that others would hear me and think I had said it.

But when I glanced at them, I saw that they were still listening attentively, as if they didn't hear anything.

"They can't hear me, nor can they see me." The man in the suit continued, "My name is Yun Luo, and I'm here to help the host overcome the bankruptcy crisis."

"What makes you say they are liars?" Kong Shiyan asked in a low voice.

Yun Luo: "If you can make ten or eight times the profit after going public, why would I give you the original shares? Wouldn't it be better to make money by yourself?"

This made so much sense that she was speechless.

After a long pause, Kong Shiyan asked, "But there are indeed cases where employees received equity rewards, the company went public, and the employees became rich overnight."

Why can others get rich, but when it comes to her, it becomes a trap?

Yun Luo: "You also said you were an employee."

Yun Luo: "Some equity incentives are given for free, while others are sold to employees at a low price. It is up to the employees to decide whether to buy or not."

Yun Luo: "The most important thing is that the employees know whether the company is profitable or not. None of the more than 30 people present here know whether this biopharmaceutical company is making a profit or a loss every year."

"Analysts say that the company will be listed in the United States in two years!" Kong Shiyan retorted subconsciously.

Yun Luo: "Who doesn't know how to brag?"

Yun Luo: "He is a liar, so it is normal for him to lie."

Yun Luo: "If he is not allowed to offer high interest, who would buy his original shares?"

Only if you praise the original shares to the sky will others scramble to buy them.

Kong Shiyan was speechless again.

Yun Luo: "If you don't believe it, search for 'original stock scam'."

Kong Shiyan really searched it.

The search page clearly states, "Original shares are shares issued by a company before it goes public. In the early days of China's stock market, corporate shares were publicly issued to the public at the issue price in the primary stock market."

"For the so-called original stock trading activities, securities industry insiders call it the 'primary half market', which means private trading of stocks and equity certificates that have not yet been listed on the exchange or internal employee shares of listed companies that have not yet been listed for trading."

"According to the law, companies listed domestically or overseas are not allowed to sell original shares to ordinary citizens. Any sale of shares to unspecified members of the public through advertising, announcements, broadcasts, text messages, promotional meetings, briefings, the Internet, or other public solicitations without the approval of the China Securities Regulatory Commission is considered an illegal securities activity."

Such scams may trick investors into buying shares by promising high dividends or claiming that the company will get a tenfold return after going public.

In fact, after buying it, it is no different from holding a pile of waste paper. Some people have waited for more than ten years, but have not received any dividends, nor have they waited for the company to go public, and they don’t even know where the company is.

After reading it, Kong Shiyan, "..."

No wonder most of the people invited to the stock market review meetings are elderly people. This is clearly an attempt to defraud money!

Who doesn't have elderly people in their family? Is it immoral to do such a thing?

Kong Shiyan was furious.

On the podium, the "investment master" finally ended his speech with saliva flying.

The investment consultant who had been standing nearby and had been waiting impatiently rushed towards the customer and boasted about the company's unlimited appreciation potential and how it was very profitable to buy original shares.

Some elderly people were so excited after hearing this that they paid a deposit on the spot.

At this moment, someone shouted loudly, "This is a scam! They say that the original shares will be listed in the United States in the future. This is a lie! What you are paying for is just a pile of waste paper. Be careful, don't be fooled!"

The person who spoke was Kong Shiyan.

She couldn't bear to watch it any longer and couldn't help but remind him.

Kong Shiyan's shout was so sudden that everyone was shocked.

The organizers did not expect that someone would expose the scam in public, and they could not help but panic. Before they could think of a response, the old man accused them, "What's wrong with you, girl? We are a legitimate property brokerage company, how could we cheat people?"

"If you don't want to buy, you don't have to buy, but there's no need to stop us from getting rich."

"My son works in a biopharmaceutical company. He told me that this industry is very profitable. If you miss this opportunity, you may not be able to come across it again in the future!"

Kong Shiyan was stunned.

What she never expected was that the person who stopped her from speaking was not the organizer's staff, but an elderly person who was attending the stock review meeting with her.

Kong Shiyan was very anxious, "What I said is true! This is a scam! Many people have been fooled, you can find out by searching on the Internet!"

What do a bunch of old men and women know about surfing the Internet?

Furthermore, they felt that what they encountered was not the same as the cases on the Internet.

Therefore, no matter what Kong Shiyan said, they remained indifferent.

"Miss, please don't cause trouble to other investors and please get out." Several bodyguards surrounded Kong Shiyan, obviously intending to "send" her out.

Kong Shiyan gritted her teeth and had to give in.

Just as she was about to take a step forward, the police broke in.

Kong Shiyan showed a delighted expression and shouted loudly, "Comrade police, this is where the scam is happening! I'm the one calling the police!"

Hearing this, the staff member's face changed and he couldn't help showing a trace of panic.

**

It was already five o'clock in the afternoon when I finished taking the statement.

Throughout the entire process, the criminal gangs remained silent, and it was the elderly investors who continued to defend them.

Even though police comrades have repeatedly reminded that selling original shares is a classic scam, some people still refuse to believe it.

On the way home, Kong Shiyan walked with heavy steps, exhausted. It was a good weekend, but she was more tired than working. It was really unspeakable.

When she got home, she threw herself on the bed and wailed, "Why is this all a scam? Are ordinary people destined to never get rich?"

"Not really." The man in a suit appeared automatically. "For the vast majority of ordinary people, investing in the stock market is the only way to increase family wealth and improve living standards."

"What's your name, Yun?" Kong Shiyan sat up straight, revealing a trace of embarrassment, "I haven't had the chance to thank you properly yet."

Yunluo: "Yunluo."

Yun Luo: "You're welcome. Not being fooled is the best way to thank me."

There was a previous host who couldn't stop her from falling into a trap and being deceived no matter how hard he tried. In comparison, this host was still very good, at least he was willing to listen to advice.

Kong Shiyan was curious, "Someone I know almost lost all his money after investing in stocks. Increase family wealth? How do you say that?"

Yun Luo: "If there is a company with a value of 10 billion yuan and a net profit of 15% per year, 5% of which is used for dividends, and the remaining 10% of the profit is put into the company's account to expand production scale, would you be willing to invest in it?"

Kong Shiyan's eyes widened, "Of course I do!"

"It's a 5% dividend every year! The annualized rate for buying financial products is only around 4%."

"What's more, there is still 10% of the profit on the books. As the company continues to expand, the dividends will only increase in the future!"

At the end, she hung her head and said dejectedly, "Where can I find such a good business? Besides, why would anyone give me the opportunity to make money for no reason?"

Yun Luo: "Such good opportunities are everywhere in the stock market."

Yun Luo: "I was talking about banks. Fortune 500 companies pay out 5%-6% dividends every year and have stable business."

Yun Luo: "But there are very few people who are willing to buy bank shares at a low price and live off the interest every year."

Yun Luo: "Many people go to the stock market just to follow the hype and make quick money."

Kong Shiyan, "???"

Kong Shiyan, "!!!"

She was so shocked that she couldn't speak for a moment.

After pondering for a while, Kong Shiyan finally cleared her mind. "The bigger the scale, the more money you make and the more dividends you get. Isn't this a very cost-effective deal? Why doesn't everyone buy it?"

Yun Luo: "Because the annual return is only a few percent, others who are good at stock trading can make 30%-50% a year."

"The market value is 10 billion, and the annual profit is 1.5 billion. 500 million of it is distributed as dividends, and 1 billion is used for expansion. The total market value of the company becomes 11 billion."

"If the market is completely rational, the stock price should rise after the dividend, in line with the change in market value."

"But the market is always capricious. When a company's market value is 10 billion, its share price is 7 yuan. When the company's market value is 11 billion, its share price may become 6 yuan."

Kong Shiyan understood a little bit, "So even if there are dividends, you will still lose money if you buy stocks."

Yun Luo: “Yes, so people don’t buy this kind of stocks.”

Yun Luo: "In fact, the wrong pricing is only temporary. When the company's market value reaches 14 billion, it still earns 15% every year, which is 2.1 billion. The dividend ratio remains unchanged, which is 700 million. By then, the price cannot be still low."

"Why?" Kong Shiyan asked subconsciously.

As soon as she asked, she realized it herself. If the price continued to be low, the annual dividend rate would be 8%-10%. Who wouldn't rush to buy it?

If more people buy, won’t the stock price be pushed up?

"I didn't expect there are such good companies in the market. As long as I want, I can buy stocks and become a shareholder of the company at any time." Kong Shiyan was slightly surprised.

Yun Luo: “Buying stocks means buying a company.”

Yun Luo: "It's a serious investment, and the money earned is from the development of the company."

Yun Luo: "Capitalists think that the money is earned too slowly, so they hype up hot spots everywhere. There are many people following the trend, and when it is time to retreat, there is no time to escape, and they often lose a lot of money."

Kong Shiyan suddenly realized.

The author has something to say:

Some of the information comes from Baidu

Primary market: also known as the issuance market, is the market formed when capital demanders sell securities to the public for the first time.

Secondary market: The securities trading market refers to the place where issued securities are bought, sold and circulated, and is the market for the transfer of ownership of securities.

**

Author's popular science:

Just give an example

China Minsheng Bank, ranked 221st in the Fortune Global 500 (2019 data).

The earnings per share in 2018 was 1.14, the closing price yesterday was 5.9, and the dividend on July 5, 2019 [for every ten shares] was 3.45 (= dividend per share 0.345).

If you buy at 5.9, you can earn 1.14 per share per year, so the return on investment = 1.14/5.9 = 19.3%

Dividend rate = 0.345/5.9 = 5.85%

Banks make money mainly through interest rate differentials (2%-3% for deposits, 5%-6% for loans, and the review is quite strict.)

This model is very stable, and how much money is earned depends on how much capital is absorbed. So some people say that banks are very similar to bonds.

[This is just for popular science, not as investment advice]

[In 2013-2014, the annual dividend rate of CCB and ICBC was as high as 6%-7%]

[Don’t rush to start after reading this. Read the whole article before planning. I haven’t had time to write about some of the pitfalls yet. ]

**

To put it simply, someone buys shares in a promising business in the stock market.

[For example, in the Compound Interest Life instance, the cousin has skills, the cooked food store has a good development prospect, and the host invests in it. ]

Some people are speculating in the stock market.

[For example, in the tulip dungeon, you tell stories, drive up the market price, and make a fortune together. When the game is over, you suddenly run away, the stock price plummets, and you end up in a mess.]

**

Someone asked how to get the dividends

Two days after the dividend date, the dividend amount will be automatically credited to your account and can be withdrawn and used directly by transferring it from your securities account to your bank account.

**

#I have tried my best. If you still don’t understand…there is nothing I can do#

#Look at stocks from the perspective of an investment company#

#If it doesn't work, just cut off a few zeros and pretend it's a million dollar business, so it's easier to understand. #