Buffett: The stock price will eventually reflect the intrinsic value of the company.
99% of Buffett's wealth comes from the value of Berkshire shares, a listed company controlled by Buffett, so once the stock market plummets, Buffett's Berkshire shares are likely to be spared. So, what was Buffett's reaction when the US stock market plummeted at 1987?
According to foreign media reports, Buffett may be the only person in the United States who doesn't have a stock market crash from time to time. There is no computer or stock market machine in Buffett's office. He doesn't look at the stock market at all. Throughout the day, he stayed quietly in the office as usual, making phone calls, reading newspapers and reading the annual reports of listed companies. Two days later, a reporter asked Buffett: What does this plunge mean? Buffett's answer is only one sentence: maybe it means that the stock market rose too high in the past.
Buffett didn't panic about the news, nor did he panic about selling stocks. In the face of the plunge, the sharp decline of his wealth, and the sharp decline of his heavy stocks, he was very calm. The reason is simple: I firmly believe that these listed companies have long-term sustainable competitive advantages, good development prospects and high investment value, and I firmly believe that the stock market crash, like natural disasters, is only temporary and will eventually pass and return to normal, and the stock prices of the companies I hold will eventually reflect their intrinsic values.
Peter Lynch: The plunge is a good opportunity to make a lot of money.
1987 The American stock market crashed, and many people went from millionaires to abject poverty, had a nervous breakdown and even committed suicide. At that time, Peter Lynch, the American securities superstar, managed the Magellan Fund with more than $654.38+0 billion. In one day, the net asset value of the fund lost 654.38+08%, and the loss was as high as $2 billion. Lynch, like all open-end fund managers, has only one choice: selling stocks. Lynch had to sell all his shares in order to cope with the huge redemption.
More than a year later, Peter Lynch still felt scared when he recalled this incident. "At that moment, I was really not sure if this was the end of the world, or if we were about to fall into a serious economic depression, or if things were not so bad, but Wall Street was about to die?"
After that, Peter Lynch continued to experience many stock market crashes, but he still achieved very successful results. It puts forward three suggestions: first, don't sell all stocks at low prices because of panic. If you sell stocks in despair in the stock market crash, your selling price will often be very low. 1987 10 is scary, but there is no need to sell stocks on this day or the next. In June of that year, the stock market began to rise steadily. By June of 1988, the market rebounded by more than 400 points, which means that the increase was over 23%. Second, you must have firm courage to hold good company stocks. Third, we should dare to buy good company stocks at low prices. A plunge is the best opportunity to make a lot of money: great wealth is often earned in such a stock market crash.
Soros: Never put all your eggs in one basket.
Soros, founder of Quantum Fund, said that it is instinct to want to live, and it is skill to live. "Nothing in my life is more terrible than death. As long as I don't die, there is a way. " 1987 The stock market plummeted, and Soros's quantum fund lost $650 million to $800 million in this stock market crash, even exceeding the broader market. Instead of sitting still, he admitted to paying the price, sold all his portfolios at a low price, and then used the remaining funds and financing to establish a dollar position. By the end of the year, the growth rate of Quantum Fund had returned to 14%, which was a great reversal.
Soros said, "mistakes are not shameful. Shamefully, the mistakes are already obvious, and they are not corrected. Taking risks is beyond reproach. But at the same time remember not to put all your eggs in one basket. "
Philip Fisher: Don't buy strange stocks too soon.
The timing of investment is difficult to grasp. When investors are uncertain about the timing, they choose to hedge. It is roughly estimated that 65% ~ 68% of Philip Fisher, an American investment guru, will invest in four stocks he really likes, the remaining 20%~25% will be cash or cash equivalents, and the rest will be invested in five promising stocks. Fisher will spend a lot of time researching and is not in a hurry to buy. "In a falling market environment, don't buy unfamiliar stocks too quickly."
Jesse Livermore: There is a floating loss, which means that a mistake is being made.
Jesse Livermore, a legendary figure in the history of American stock market, once pointed out that investors are making mistakes after buying or selling. Generally speaking, if the floating loss does not improve within three days, it should be thrown away immediately. Never share the loss equally, and remember this principle firmly. After the price enters an obvious trend, it will always run automatically along a specific route that runs through the whole trend. When you see a danger signal, don't argue with it and avoid it! If all goes well, come back in a few days. In this case, it will save a lot of trouble and money.
Jim rogers: The value of buying it, the madness of selling it.
Wall Street investment guru jim rogers once pointed out that we should wait patiently for a good opportunity, make money and profit, and then wait for the next opportunity. Only in this way can we defeat others. The market trend is often characterized by a long-term downturn. In order to avoid the stagnation of funds in the market, investors should wait for the catalytic factors that can change the market trend. The value of buying it, the madness of selling it.
Jeremy Grantham: Investors should wait patiently for good cards.
Jeremy Grantham, the best investment strategist in the world, suggested: First, believe in history. History will repeat itself, and it is dangerous to forget this one. All bubbles will burst, and all investment madness will vanish. The task of investors is to survive the market fluctuation.
Second, don't be a borrower or a lender. If investors borrow money to invest, it will interfere with their investment ability. Portfolio that does not use leverage will not be liquidated, and investment that uses leverage will face this risk. Leverage will damage investors' own patience. Although it will temporarily increase the return of investors, it will eventually be suddenly destroyed by it.
Third, don't put all your assets in one boat. Allocating investment to several different fields and as many fields as possible can increase the flexibility of the portfolio and enhance the ability to resist shocks. Obviously, when there are many and different investment targets, investors are more likely to survive in the critical period of the decline of major assets.
The fourth is to be patient and take a long-term view. Investors should wait patiently for good cards. If the waiting time is long enough, the market price may become very cheap, which is the margin of safety for investors.
The fifth is to stay away from the crowd and only pay attention to value. The best way to resist crowd agitation is to * * calculate the intrinsic value of individual stocks or find a reliable source of value measurement (check their calculation results from time to time). Then worship these values like heroes, trying to ignore everything. Remember, those big opportunities that can save investors from grief and make money are very obvious from the figures: compared with the long-term average price-earnings ratio of the US stock market 15 times, the price-earnings ratio of 1929 was 2 1 times at the peak of the market, and the Standard & Poor's 500 was 35 times at the peak of the Internet bubble in 2000! On the contrary, at the low point of 1982, the P/E ratio is 8 times. It's not complicated
Sixth, be true to yourself. As an individual investor, you must know your strengths and weaknesses. If you can wait patiently and ignore the temptation of the group, you are likely to win. Investors must know their tolerance threshold accurately. If investors can't resist the temptation, they will never manage their money.
It is inevitable that the stock market will be hit by the decline across the board, but as an investor, you can't lose your mind and keep a good attitude in order to have a better solution. The valuable suggestions and countermeasures of the above masters are hard to come by. You can learn from the best, hoping to provide some ideas and inspire you.