retail investors can't hold good stocks, which is actually caused by poor cognition. To put it bluntly, people can't make money beyond cognition unless they rely on luck. In the stock market, it is even more difficult to make money by luck.

The reason is that stock trading decisions are too frequent, and it is easy to make one's fingers itch and miss the big bull stocks. Retail investors are not clear about the logic of a stock's rise. Even if they have certain cognition, they may get off the bus early because of the fluctuation of the stock price and the inner waves.

Not only can the phenomenon of missing big bull stocks be seen everywhere, but also those who miss the peak of stock price and eventually lose money are not without it. In reality, it is quite difficult to grasp the buying and selling points of individual stocks. First, we should be glad that we once owned them, and then we should find ways to hold them for a long time.

the core of long-term stock ownership is to be able to look at the current stock price in the future and judge its position and potential space. Knowing that a stock will go up to 1 in the future, it will not choose to get off at 3 or 5. Raising awareness and letting yourself see further is the only way to grasp bull stocks and hold them well.

why are bull stocks oversold?

We can't use linear thinking to measure the price of a stock, because behind the stock is the enterprise, and the development of the enterprise is dynamic and unpredictable. Bull stocks have soared, not only because of the nonlinear changes and growth of listed companies, but also because of the irrational speculation of funds. The capital itself is not linear, but has an aggregation effect, which is directly reflected by the accelerated rise of the stock price in the later period. First of all, from the performance point of view, the rise of stock price is not an intuitive embodiment of the performance of listed companies, but an overdraft for the future rising space of listed companies' stocks.

simply put, if the stock price is linked to the future performance expectation and there is a linear growth, 3% this year, 3% next year and 3% later, then the stock price should theoretically rise in the same way. In the eyes of funds, three 3% can be digested in advance within three months, and the stock price will double, and the problem is not big. So, when you are still there to pay attention to the performance of the company, the stock price has begun to fly all over the sky. And when you find that your performance has increased greatly and you are in a hurry to enter the game, you find that your performance growth has begun to decline, or it is less than expected, and the trend is weak.

price comes first, performance comes later, which is the law of stocks, and it is also one of the core logics of bull stocks' overshooting, and another core logic is liquidity premium, that is, the aggregation effect of funds.

The rise of the stock price has also led to the appearance of the money-making effect, attracting more funds to enter the market. It can be said that climbing is also a high probability thing. The reason why funds enter the market is actually not performance or subject matter, but the expectation that there will be a high probability of making money and a low probability of losing money. First of all, the places where funds are piled up are safer, and there is no situation where there is no one to take over. It is easier for funds to flee quickly and will not be shut down.

in this case, even if you want to stop loss, the extent of capital loss will not be too high and the safety factor will be higher. Secondly, the accumulation of funds is the essential reason for the stock price rise, and the turnover rate of stocks is relatively limited. As long as there is enough funds, the stock price will naturally rise. Therefore, when the turnover is large enough and the turnover rate is sufficient, funds will naturally pile up and rush in, and no one wants to miss this opportunity to make money.

whether it is a fund group or a hot money group, it is actually a manifestation of the liquidity premium of funds, and the longer the stock price, the safer it will be until the bubble bursts.

retail investors are relatively afraid of heights, and often get off the bus before the stock price rises excessively, or the stock price has peaked and is still unaware of it. Understanding the logic of capital, understanding the logic of stock price rise, and not getting off the bus easily are the most basic elements to hold bull stocks.

the high valuation of stocks is the high value

many people may not recognize it, but in reality, even Maotai has such a situation. A stock, with good performance and good growth expectation, has been hovering at the bottom for a long time. Is this possible? If it was the era of pure theme hype ten years ago, it would be possible. But now, when the average daily turnover of the market exceeds one trillion yuan and the funds are completely sufficient, this situation does not exist.

Behind the low-valued stocks, there is often a lack of growth expectations, while the high-valued stocks are the ones where funds are piled up and the future can be expected.

originally, the logic of our search for high-quality stocks was low valuation, high margin of safety and good themes. Nowadays, the logic of our search for high-quality stocks is good performance growth, good theme and capital accumulation.

So nowadays, most of the high-quality stocks we can see are highly valued and have a certain premium. The value of stocks is identified by large funds, and it is not the price-earnings ratio that retail investors can determine. There are two misunderstandings in the judgment of stock value by retail investors, and it is difficult to solve them.

1. Think that stocks with high P/E ratio are risky.

the stock price rises by 5%, which is risky. The stock price has doubled, which is risky. The price-earnings ratio of the stock price is 1 times and 2 times, which is risky. It is absolutely true that high valuation is risky. But the valuation is dynamic, and so is the P/E ratio.

before the quarterly report was issued, the P/E ratio was more than 1 times, with a quarterly increase of more than 1%, and the P/E ratio suddenly became more than 5 times. Behind the high valuation of stocks is the recognition of stocks by funds, and it is the performance growth of stocks judged by funds. Retail investors, holding statements that were sent out several months later, certainly missed the best opportunity to get on the bus.

even if you get on the bus, you will get off at the slightest sign of trouble because of your fear of heights. Cognitive mistakes decide to miss big bull stocks.

2. It is considered that stocks with low P/E ratio are easy to rise.

A stock with a low P/E ratio only has a high margin of safety, which has nothing to do with whether it goes up or not.

however, whenever funds are concerned and flood in, there will be no low P/E ratio. Buying a stock with a low P/E ratio is undoubtedly choosing security instead of profitability. Money is much smarter than most retail investors. Don't they understand that the price-earnings ratio of stocks is low? Then why didn't they flock in?

The reason is that these stocks are only safe, and they don't have the momentum to rise in the short term, so they need large-scale funds to promote them. Therefore, hot money chose to evade temporarily until the theme broke out or the plate rotated before intervening. There is another situation, that is, the company's performance is not ideal, and the stock price keeps falling, which leads to a lower P/E ratio.

this kind of enterprises, the investment value is weaker, at least until the performance recovery, will be attracted by funds.

the valuation is only reasonable and unreasonable, and there is no distinction between high and low. The logic that existence is reasonable lies in the expected growth, not in the current performance.

A few cognitions necessary for holding a bull stock

If retail investors want to ride a bull without getting off the bus, they must increase their cognition, and there are several points that must be possessed. Otherwise, there are 1 ways to wash you out of the car and miss the big market.

first, make clear the reasons for the rise and confirm the logic of the rise.

for a bull stock, the rising logic is very important. There is only one logic to support a long-term upward trend of a stock, that is, the continuous increase in performance.

all bull stocks, in the final analysis, are driven by the theme, and making money is the only thing. Therefore, whenever listed companies make more money every year, the logic of rising stock prices will always exist. Because the liquidity premium and valuation trap brought by funds are just a small scenery in the long distance.

second, keep a stable shareholding mentality and ignore short-term fluctuations.

the stock price will fluctuate violently in the short term because of funds. It is possible to double the price and stop it. Those 2-3% declines are even more common.

for retail investors, they should keep a steady attitude when holding shares and try to ignore short-term fluctuations. Floating loss is very uncomfortable, and floating profit is very exciting. These are normal and need to be faced. But don't doubt the quality of your shareholding because of these, you must hold it realistically.

third, pay attention to the capital movement to ensure that the trend is still there.

the rise and fall of stocks are all trending. The ability of capital to judge a company is far stronger than that of ordinary retail investors. On the road of development, enterprises will encounter all kinds of business challenges at any time, and it is very likely that there will be performance problems. However, the performance report often lags behind, and the capital will judge the stock price in advance.

Therefore, as an investor, we must understand the trend power of stock rising and the importance of the rising channel. In the channel, firmly hold it, and after the trend changes, we must make careful decisions. The vast majority of investors meet one or two big bull stocks every year, only to find that the stock price has risen sharply after selling.

Don't feel pity, because you can't control it for the time being, but learn from it, find out the real reason for the rise of big bull stocks, sum up the main points and enhance your cognition.

once retail investors have the thinking of big money, they have the opportunity to make long-term money and seize big bull stocks. In addition, if you find the stock you missed one day and the potential of the big bull stock, don't hesitate to own it again, which is the best choice. In the A-share market, there are many stocks that have soared in the short term, and there are not many stocks worth owning for a long time. If you are in the car, please don't get off easily.