The recent trend of global stock markets has been quite turbulent, with ongoing geopolitical conflicts, sharp rise in energy prices, sharp depreciation of currencies such as the pound and yen to record lows, the Dow Jones Industrial Average falling below 30,000 points, and the Shanghai Stock Exchange Index also falling to around 3,000 points.

As panic spreads, what should investors do?

How to appease the anxious heart?

Major events such as inflation, war, and geopolitical crises that once made the stock market pessimistic gave rational investors the opportunity to buy high-quality companies at cheap prices.

As Buffett said, widespread panic is an investor's friend because it provides cheap assets, but individual panic is your enemy, and it's usually not a good idea to sell your good stocks when you hear bad news.

a wise decision.

In this issue, the brokerage China·Investment Xiaohongshu reviewed some classic investment cases, such as Zhang Yao and Wang Wen’s investment in Shaanxi Coal, Duan Yongping’s investment in Kweichow Moutai, and Buffett’s investment in the Washington Post.

These classic cases all illustrate that fear is the enemy of blind obedience, but it is a good friend of fundamental believers. Excess returns come from the placement of high-quality companies amid the roar of gunfire.

Three classic investment cases: good company + heavy bottom position + long-term holding. In the past four years, the Shanghai Stock Index has not escaped from the 3,000-point box position, but Shaanxi Coal has increased by more than 200%. Zhang Yao, Wang Wen and others have made arrangements in advance.

Investors become big winners.

In the 2022 semi-annual report of Shaanxi Coal Mining, Zhang Yao ranked as the tenth largest shareholder of tradable shares.

In fact, Zhang Yao has held Shaanxi Coal for more than four years. In the 2018 semi-annual report of Shaanxi Coal, Zhang Yao was the eighth largest circulating shareholder of Shaanxi Coal.

Although Zhang Yao's name has withdrawn from the list of the top ten shareholders of tradable shares in the 2019 semi-annual report, people familiar with the matter revealed that Zhang Yao has not reduced his holdings in Shaanxi Coal in the past four years, and has also increased his holdings. Zhang Yao actually

Through block transactions, Shaanxi Coal was transferred to fund products to hold positions, which were used to apply for new stock subscriptions.

As the income from the fund's new stock subscription business has declined, some Shaanxi Coal Mining stocks have been returned to Zhang Yao's personal name through block transactions. Therefore, Zhang Yao's name has surfaced again in the 2022 semi-annual report, which is expected to be released in March 2022.

The number of Shaanxi Coal Mining shares under Zhang Yao's name will increase even more in the quarterly report.

This is a classic investment case. In 2018, Sino-US trade friction escalated, and A-share panic spread. The Shanghai Stock Exchange Index fell as much as 25% that year. The depth of the market decline in 2018 far exceeded that of 2016 in the aftermath of the huge earthquake; in addition, new energy competition

The market is getting hotter day by day, and the traditional energy sector is generally not optimistic.

Zhang Yao, Wang Wen and others began to invest heavily in coal companies such as Shaanxi Coal and Yankuang Energy amid investors' pessimistic expectations about the market and the industry.

A good asset's own rate of return is attractive enough, which is the most important reason why they dare to hold heavy positions in companies such as Shaanxi Coal.

Shaanxi Coal Mining's dividend per share in 2022 will be 1.35 yuan. Shaanxi Coal Mining's stock price in mid-2018 was about 8 yuan. After dividends from 2018 to 2021, Shaanxi Coal Mining's buying cost has dropped to 6 yuan.

This means that this year’s dividend has a dynamic dividend rate of more than 20% relative to the purchase cost in mid-2018.

When talking about the investment in Shaanxi Coal Industry in the past four years, Zhang Yao and Wang Wenxi shared the same view: successful investment is to find good companies, buy more at the bottom, hold on to the middle, and still have enough at the top.

quantity.

Shaanxi Coal Industry has basically realized this process.

A good investor will never abandon the crown jewel because he has held it for too long or because he feels that the target he holds is too boring.

Although Zhang Yao, Wang Wen and others have held Shaanxi Coal for four years, they have not given up their long-term holding philosophy.

Sluggish market conditions coupled with industry pessimism provide opportunities to buy high-quality companies at bargain prices.

The "plasticizer" in November 2012 hit the liquor sector hard and pushed the Shanghai Composite Index, which had been declining for four consecutive years, to 1949 points, commonly known as the "Liberation Bottom."

It was against this background that Duan Yongping began to buy Kweichow Moutai. In February 2013, Duan Yongping began to build a position in Kweichow Moutai at about 180 yuan per share. However, for the entire following year, the stock price of Kweichow Moutai was at around 180 yuan per share.

There was a gradual decline. In January 2014, Kweichow Moutai’s share price fell to as low as 118 yuan per share.

Duan Yongping also continued to increase his position during the decline of Kweichow Moutai, buying from 180 yuan per share to around 120 yuan per share.

Duan Yongping's purchase of Kweichow Moutai is by no means a mere taste, but a heavy holding to this day, with profits exceeding 10 times in the past 10 years.

Buffett's purchase of the Washington Post is also in line with the concept of buying a great business that is "going through the baptism of storms."

In 1973, the total market value of the Washington Post was US$80 million, and Buffett believed that the company was worth at least US$400 million to US$500 million.

Buffett decided that this was a once-in-a-lifetime opportunity, so he made a big purchase. By October 1973, Berkshire Hathaway became the largest external shareholder of the Washington Post, holding about 10% of the shares.