Look at your subtitles first. You entered the market on 19, and you are still a new shareholder. You haven't experienced much bull-bear span, and you belong to a typical new leek. And you make money when you enter the stock market. Congratulations, you have tasted the sweetness. It is estimated that every stockholder will be happy. It also provides psychological support for you to continue fighting in the stock market.
Secondly, maybe I'll throw cold water on you. That is, in fact, you made money in the stock market, not because of your ability and skills, but because the stock market was ok in the past two years. It was a small bull market and investors could make some money. In other words, you can make money in the stock market, not because you have the ability, but because the country needs a good stock market in the past two years, and you will make money. So is your friend who bought the fund. No matter how much his fund earns, it is because the stock market can still do at this stage, so he earns money, not how talented and capable he is. When the bear market comes, no one can make money, and no one should brag.
Many investors think that they are very powerful and have trading skills, so they can dominate the stock market and then wait for financial freedom. However, are most leeks harvested, especially new leeks and confident leeks? I don't believe you'll get it. When the bear market or the stock market doesn't need a bull market, these people's stock gods can't blow up, and those so-called trading skills and trading levels are all naked swimming.
There are two iron laws in the capital market. One is that it is impossible for everyone to get rich, and most people will not make money. The other is that in this market, human nature determines everything.
In fact, a large proportion of our A-share investors have not studied systematically, or have no operating system of their own. A large number of investors without any investment knowledge enter the stock market with the mentality of playing hundreds of thousands or tens of thousands of dollars. In other words, chasing up and down depends on your dream of buying stocks, and profit and loss depends on luck. Some investors may have made a fortune by their own luck when they first entered the stock market, but they thought it was because of their strong ability, and then they invested more money, resulting in huge losses, which is not uncommon in the capital market.
Influenced by Graham and Buffett, I am also a pure value investor. The first thing we need to find out is whose money we made in the market. For value investors, what we earn is the money for enterprise growth. For example, Xiao Zhang is going to buy a fruit shop. Some tables, shelves and benches on the facade of this fruit shop belong to fixed assets, and then there may be 20 thousand yuan in cash to buy them. All these add up to the company's net assets. Now we assume that the company's net asset value is 654.38+10,000 yuan.
The fruit shop earns 20 thousand yuan a year, and now the owner of the fruit shop offers 200 thousand yuan to Xiao Zhang. If Xiao Zhang invests in this fruit shop, the annual profit will remain unchanged, that is, it will take 10 years to return to the capital. Moreover, it is necessary to deduct here. Some tables, chairs and houses in the store may be renovated in a few years (depreciation and amortization of fixed assets). These costs and annual inflation rate are not calculated here for the time being. If Xiao Zhang spends 200,000 yuan to buy this fruit shop, it will be 10 times PE and 2 times PB (price-to-book ratio). At this time, the company's price is moderate, not expensive but not cheap. At this time, let's estimate that there are many houses near this fruit shop, and there is only one fruit shop around, so I have the right to raise prices. At the same time, I can make some imported fruits and optimize the purchase channels. In the next five years, the annual profit will increase by about 20%, and the profit in the second year will be 2* 1.2=2.4. The fifth year is 4 1400.
At this time, our growth rate may slow down, and we may find new ways of growth, such as opening another fruit shop nearby to expand. This is a management problem that we need to consider. When we buy stocks, we buy companies. This kind of fruit shop is also our common growth stock. Buy this fruit shop when the annual growth rate reaches 20% in five years. It's still a good deal, but it's hard for us to find a company with a compound annual growth rate of 100%. So we should leave ourselves a margin of safety, that is, buy at a good price, so that there will be more room for growth and less room for decline.
What is the margin of safety? For example, this fruit shop, we bought it at 10 times the valuation, and the safety margin is very high. Because the return on our investment in 10-year treasury bonds is only 3. 16%. Ten times the valuation means that if the company's profits remain unchanged at the current price, it will take 10 years to return to the capital, and the annual income will be 10%, so it is still very attractive.
We can also inquire about the overall valuation of the historical A-share market in judging cheapness. Capital is bloodthirsty, capital is profit-seeking, and will eventually flock to assets with high returns and high certainty. This is an aspect of value investment. Look at the growth of the company and judge whether the enterprise is competitive. Is this fruit shop competitive? If you have your own unique purchase channel, which is cheaper than your peers, the scale effect can also become a kind of competitiveness, which can also be called the moat of the bus. As for how to see whether a company is competitive, this is actually a very controversial topic. I'll write an article about this problem in detail next time. In addition to the growth of the company, we also need to judge the company's current valuation, that is, the current price is not cheap. If you buy it, how long will it take to return to the original, and will it bring us a satisfactory rate of return? For value investors, buying stocks is buying companies. The company's profits are increasing year by year. Even if the valuation doesn't improve, we still make money. If the current market sentiment is pessimistic, the valuation is low. You can get Davis' double click, that is, the double promotion of profit valuation, and get a rich rate of return.
Someone asked me, why are we still profitable when the valuation of profit growth remains unchanged? This is a very simple question. The share price is obtained by PE (price-earnings ratio) * earnings per share. We can get positive returns on any one of them, so we invest at a good price and then buy a good company. You can get the ideal income if you hold it patiently. Look at the enterprise, don't touch what you really don't understand. Stick to what you know and truly integrate knowledge with practice. I believe everyone can make a profit in the stock market. Why are so many people losing money? No matter how good the company is, buying at a high point will also lose money. This is why Buffett can earn seven times when he buys PetroChina, and some people lose 50% after holding shares for five years. This is caused by high valuation, and the company's profit growth cannot match the current high valuation. It will take time to consume this high valuation. For example, under the current high valuation of Hengrui Pharma and Aier Ophthalmology, how long can it last? At present, the compound growth rate of Hengrui Pharma's net profit is about 22%, corresponding to a market value of 368.8 billion. My understanding of the valuation is that at least a compound growth rate of 35-38% in 10 can support the current valuation. In other words, Hengrui Pharma needs to achieve a net profit of 9-130 billion in 2029. It's a little expensive, but it's a great leading innovative drug company, but it's too expensive.
Now everyone should have a preliminary understanding that buying stocks is buying companies. Follow the growth of corporate profits, look for low-valued enterprises to wait for valuation repair, hold patiently, do not chase up and down, do not blindly invest, and analyze in all aspects. The future of the industry, the position of the company in the industry, the positioning of the company's products, the operation of competitors, whether it has its own moat, and the personality and ability of the management are all factors we need to consider. Everyone may feel very simple when they come to the stock market, and everyone thinks that investing is a very simple thing. Buffett did say that investing is a simple thing, but it is not easy. But have you ever thought that Buffett, a disciple of the old bus and a master of economics at Columbia University, bought his first stock when he was 1 1? As ordinary retail investors, we should be more modest. In this market, look for investment opportunities with high certainty, don't add leverage, and don't touch companies you don't understand. Just like the two most important things in investing, the first thing is not to lose money, and the second thing is to repeat the first thing.
There are still a group of people in this market who chase up and kill down, buy when the company rises well, and sell when it doesn't rise for a long time or rises worse than other companies. In fact, I don't understand the performance of a company. Generally speaking, there are several principles for me to sell the company. The first is that it has risen to what I think is a high valuation. The second is that companies with low valuations are worth buying, and the third is that the fundamentals of the company have changed. In this case, regardless of profit or loss, it will be sold immediately. The rest of the time, I am in the state of holding shares.
Mr. Market's mood, borrow Mr. Templeton's thought. Quotations always rise in despair, rise in hesitation and always end in madness. Individual rationality determines the irrationality of the group, and market sentiment determines the current valuation level. Current data show that market sentiment is in a pessimistic region. Of course, there are also areas of fear and despair below. At present, the A-share market is generally undervalued, especially in the banking and real estate sectors.
This is my first time to write an article, and the level of articles and investment is still not good. Thank you for reading it carefully. I wish you all a satisfactory return in the market.
You are still excellent. I was introduced to this market by a friend in July of 20. I didn't know anything at that time. Buy when you see it go up, and sell when it goes down. I started to buy some books to study, and also added some stock recommenders on the Internet. But after half a year, I lost more than 10 thousand principal. Then I deleted all the recommended stocks and began to learn K-chart and position management. There is no overall profit and loss this year.