Speech given by Wushunqi

Good morning everyone,my name is Wushunqi,you can call me Sunny. I'm from Materials Science and Engineering. Today I'll share a common but useful effect on economic analysis,Davis Double Effect.

There are some key words or strange concepts. Please read after me.

So before we start,l want to ask you a question:Have you ever contact withstocks or other financial products? Like fund and insurance.

Let's go from its origin. lt's not from a single person,this effect is created by Davis family. This family may not be as famous as Buffet for investors in China.But in the United States, it has a huge celebrity. Their celebrity come from the legend,they expanded their possession from 50 thousand to 9 billion in 70 years. Three generations had devoted to the fund they created by themselves and make a huge currency empire. The technique they used in investment is Davis Double Play Effect.

So what is Davis Double Effect? It's like butterfly effect in a way.It's about market expectations and double multiplier effect between the fuctuation in prices of quoted companies.There's its fundamental. When an enterprise's prof t kept rising for a period of time,the share's earnings per share ( EPS ) increases.This makes the Market assessment of the company increases, which will pullup the price earning ratio(PE). At last, this makes the share price much higher than usual and investor can earn much more money. On the opposite, if the enterprise's prof t kept reducing because of bad management or news, it's share price will down to a much lower level in a similar way. The main reason is that the rule of calculating price per stock is :P=PExEPS.

Let's have an actual example. This is a fnancial statement of Wangsu Technology Company and the K line chart. I need you to pay attention the part l've marked with red frame. You can see, from 2013 to 2017, the pure proft of the Company had risen from 10 million to 125 million. In that case the share price has risen in this way.lt's extremely a fast increases. But in 2017, it's capital chain cracked. So you can see the share price started reducing in a high speed.

I guess that some of you will make this useful some day. Hope this may help you. That's all my presentation, thank you!