On this day, Ankang's parents went to see the World Expo again, and a classmate of Ankang asked Ankang to have dinner.

This classmate is a high school classmate, and after graduation, he went to Shenzhen, and heard that he first resold mobile phones, and then opened his own factory to make copycat mobile phones. Tens of millions of dollars have been earned in a few years.

Making copycat mobile phones can almost be said to be a profiteering industry second only to drugs and arms. The chip is off-the-shelf, the motherboard is off-the-shelf, and the operating system is off-the-shelf. You only need to spend a little money to make some bells and whistles design, and then open the mold to produce.

When the market is good, dozens of agents from all over the country queue up to get goods at their sales outlets in Huaqiangbei every day.

The mobile phones they make are not very good in quality and workmanship, but they focus on a strong sense of design. Of course, it's a very rustic design. This kind of mobile phone is basically an old phone bought by young people for their parents in big cities, but it is very popular in small cities and rural areas.

There are even people who go around the back door in order to get a mobile phone that glows with colorful lights around them when they are on a call. The situation is no less than the feeling of going to Nokia and Samsung's flagship stores in high-end shopping malls.

"Ankang, what do you think of my idea?" A friend clipped a lobster to Ankang and asked.

"I don't think so."

My friend was stunned for a moment and said, "You are a student of finance, this account should be calculated." You see, I'm making copycat mobile phones now, although the profit margin is relatively high, but the cost is also high. If you lend, do you know how much interest you will earn for a year with us? ”

"Twenty percent?" An Kang asked tentatively.

"Twenty percent? I also came all the way to Shanghai to invite you to dinner? Thirty-five out of three, brother. ”

"Is it that high?"

"Is it that high! It's so much. That's not too high. For those who take out a short-term loan with a term of two or three months, the interest rate for one year is 100%. I'm not that high. You do the math. If I lend out 10 million, 35 percent is 3.5 million, right? But this money is not my own money, my own money may not even be a million, and I borrowed the rest of the money. If I give 15 percent interest to others, I can earn 20 percent myself. Isn't this more profitable than me making a mobile phone? ”

Ankang simply calculated. The principal amount is 1 million, and the net profit is 2 million after deducting 15% of the financing cost. The profit margin is two hundred percent. Of course, the profit margin is higher than that of making mobile phones. It also saves worry and effort.

"Brother," Ankang smiled, "That's not how this account is calculated. Do you know what the biggest risk of investing is? ”

"What?"

"Principal risk. In other words, the point is not how much interest you make, the point is whether you can get back the money you throw in. If the investment money is your own money, then it's okay to say, I'm afraid that you use leverage. The amount of leverage you add increases the risk by a factor of magnification. ”

My friend said, "I know what you mean." I'm lending to people in the industry, friends who know the roots. I'm not afraid that they won't pay it back. Otherwise, you won't even be able to make friends. ”

Ankang said: "Brother, I will tell you as a person who has come over. Friends also have a price tag. What's more, your friends don't like us who have been through the same window together, carried guns together, or that or something together. Most of the friends in the mall are interest-related. I'm not saying that friends are inherently bad, but that people are in trouble sometimes. In case any of your friends can't pay the money, you're at risk. You've got leverage on you. ”

"I know. I know. I'm here to listen to you pour cold water. And you are an insider, I want to hear your opinions on how to operate. ”

When Ankang heard this, he thought that the problem was even bigger. It seems that this classmate is blind and doesn't understand anything. Business lending and personal borrowing are completely different things, and there are many pitfalls that you will step on if you are not careful.

Ankang did not give direct advice to his classmates, but told his classmates the risk-related stories he had encountered over the years and persuaded him to stop.

After listening to this, the classmates expressed their gratitude to Ankang, and then left Shanghai the next day to go back to Shenzhen.

It was half a year later that the classmates came to Ankang again.

"Brother, I really can't stand it." As soon as the classmates met, they said with a look of concern.

"How much does it cost you to borrow?" An Kang asked.

"Twenty percent."

Ankang was surprised: "How can it be so high?" ”

"I borrowed a three-month loan for a year."

Ankang understood. This is because the money released by the students is for a one-year period. And he couldn't finance enough money for one year, so he financed a three-month short-term debt, a total of four installments.

"You're a typical short-term debt long-term investment. Isn't this a big taboo in investment? ”

The classmate said helplessly: "Yes." You warned me before, but you know that the interest rate is really high. ”

"What's the use of giving high interest? Principal risk is the biggest risk. Now that he has gone bankrupt and liquidated, not only will you not be able to recover your investment, but you will also owe a debt to others. It's a big loss. ”

The classmate had a bitter face: "So I'm here to ask you for advice on how to retreat." ”

Ankang was also very helpless. Over the past year or so, the most advice he has given to his colleagues, classmates, friends, and partners is about retreat. And the best way out he gave was not acceptable to the other party.

"Stop the loss."

"How do you stop your loss?"

"If your company can provide enough interest, then expand production and pay off the money you owe little by little. If you can't pay it off, consider selling your house and factory. ”

"Do you really want to sell your house or factory?"

"What else? You are borrowing money in your own name, not in the name of a company. At the beginning, I also advised that the company is a limited entity and bears limited liability. Try to do high-risk things with the company as the main body, otherwise it will pull your personal life into the water. You don't listen. Now you have unlimited responsibility. If you don't do it, you'll be a fool. ”

This was the last piece of advice given by Ankang in 2010 on stop loss. However, even so, his classmates still did not listen to his advice.

The classmate is unable to repay the debt he owes, and although the assets of the person who owes him money are seized, it is necessary to go through a lengthy judicial process to get the money back from the other party. It took half a year to collect the evidence, followed by a preliminary trial. After the first trial, the defendant appealed, and then it took another six months.

Finally, the judgment was won again, but after the money was transferred to the bank account, the money was frozen by the bank. So he sued the bank. After another year of lawsuits, to no avail.

The debt he owed was eventually paid off by selling the factory and the house. After that, the classmate spent three years devoting himself to the case. I don't have a penny of income, and I have to spend money frequently.

"All I have left is my wife, my children, and an old car. Old cars must not be sold, and lawsuits have to run around, and it is not possible to do without means of transportation. The classmate said with a smile.

An Kang really couldn't imagine how this classmate could still laugh.

When he was slightly drunk, his classmates told An Kang: "From this incident, I have not gained anything at all. At least two major gains. The first takeaway is my wife's sincerity to me. It's all so miserable now, and my wife hasn't left me yet. ”

"The second is that my reverse quotient is so high. For three years, I didn't do anything, and I was working on a case every day. Every day, I handle cases, and I think about cases at night. ”

Ankang is embarrassed.

Is it hard to stop loss? It's really hard.

In my classmate's case, the operation of stop loss is more complicated. He is understandably reluctant to go for a stop loss, unwilling to face a stop loss. However, in other scenarios, many people are also reluctant to stop losses and are unwilling to face stop losses. Well-being is incomprehensible.

For example, when it comes to futures, it's actually easy to stop losses. Either an order to sell or an order to do the opposite. It's all done in a few seconds, but how many people know they're wrong, but can't take those few seconds to put down instructions.

Stop-loss is not as simple as placing a stop-loss order, it is a total denial of self, and it is also a test of human nature.

That's why manual trading is never as good as programmatic trading. Programmatic trading is strictly operating according to the rules of trading, while manual trading is breaking the rules almost every time.

The first lesson in learning to invest well is to stop loss, which is to deny yourself completely. If you don't have the courage to deny yourself, you can't do the job of investing. Because, that's the game of the brave.