In our daily investment life, we should look for companies whose future value and valuation will increase greatly to invest. The following is how to capture long bull stocks introduced by Xiaobian, hoping to help everyone.
How to capture long bull stocks
The profitability of the enterprise, the algorithm is as follows:
1. Total industry profit: total industry demand multiplied by single product profit.
2. Corporate profits: market share _ total industry profits.
Therefore, if an enterprise wants to have good profitability, it requires three conditions:
1. Being in a promising industry: the greater the total demand of the industry, the better, and the best demand can continue to rise;
2. Being in a high-profit link: the link where the enterprise is located has a higher selling price and profit;
3. It is a leading enterprise in the industry: it has a high market share and enjoys the right to speak.
In addition, the better the industry prospect, the greater the market demand and the better the risk preference of the corresponding market, so the higher the valuation level of the industry.
The market environment is another factor that affects the valuation. In the bull market, because of the high liquidity premium and risk preference, the stock valuation is very high; A bear market is just the opposite, and the valuation of stocks will be lower and lower.
Therefore, the value of a company is determined by its profitability. The stronger its profitability in the future, the greater its value. The valuation is determined by its profit expectation and external market environment factors.
Therefore, a stock that wants to "grow cattle" must meet the following conditions:
1. The company has a bright future in big industries. This will affect the market's judgment on the future profitability of companies in the industry, and then give these companies a higher valuation. At the same time, this is also the premise of the company's growing profitability in the future.
2. The company is in the high-profit link of this industry. This item can ensure that the company's products have a relatively high selling price and profit.
This company is a leading company in market segments. If the company is the leader of this market, it means that it can have a higher market share and achieve higher profits. In addition, if the company is the leader, it can guarantee higher profitability in the future.
A long bull stock must have at least the above conditions. Today's market, brand and quality determine the market position of enterprises. With the promotion of the brand, the concentration of the industry will be higher and higher, and the market share of enterprises will be higher and higher. This is an era of growing desire. The probability of choosing such a long bull stock to turn over the market will be much smaller.
Principles of stock selection for growth stocks
In Fisher's book How to Choose Growth Stocks, the third chapter introduces fifteen principles for finding excellent common stocks, the first of which is:
Does this company have a product or service with good market potential, so that the company's sales will increase substantially in at least a few years?
Why Fisher regards sales growth as the first principle of stock selection? Because sales are the source of profit growth, it is impossible for enterprises to increase profits by reducing costs for a long time, so sales growth is the main source of long-term profit growth for enterprises.
If we look back now, all the big bull stocks must be enterprises with long-term rising sales. For example, in the real estate industry, in the past two decades, taking advantage of the east wind of the golden age of China real estate, the sales have made rapid progress, and the corresponding enterprises have also brought huge investment returns to shareholders.
Another example is the smart phone industry. In the past, the fixed telephone was one for each family, but now the smart phone is one for each person, and the smart phone is constantly being updated. Most people consume mobile phones more frequently than household appliances.
There are also pharmaceutical industry, liquor industry, photovoltaic industry, new energy automobile industry, food and beverage industry. The rise of enterprise stock price is accompanied by the increase of enterprise sales.
Midea Group's operating income has not continued to grow for a period of time, but considering that its home appliance industry is closely related to real estate, as long as it does not fluctuate greatly, its long-term operating income is increasing, and its revenue performance is not bad.
Compared with Midea Group, the revenue rankings of Kweichow Moutai, Hengrui Pharma, Yili and Haitian Ye Wei are perfect. The growth rate of Kweichow Moutai slowed down from 20 12 to 20 15, mainly because of the plasticizer incident and the three public consumption incidents. However, even in the case of external shocks, its revenue did not decline, which is unique in the whole liquor industry and reflects its leading share.
In the short term, even for a year or two, the stock price may deviate from the fundamental development of the enterprise, but in the long term, such as five or ten years, the stock price of the enterprise must be closely related to the fundamental development of the enterprise. The first thing to examine in the development of the enterprise is the change of operating income, that is, sales.
Although it is easy for us to look at history now, the real stock investment is to be able to see the future of the enterprise. We need to know whether the company's future operating income will continue to grow, what is the growth rate and why. What are the advantages and disadvantages inside and outside?
Stock investment still needs a clear idea. Investment means taking risks with our money, and we must not rush headlong into it and attack at will.
Choose only these three stocks.
As for the scope of stock investment, I suggest that we only choose three kinds of stocks in the future: stocks with booming industries, stocks with active institutional positions and studied by analysts, and stocks that have been on the rise for a long time and experienced a period of volatility and decline.
1. Stocks with booming industries
There are usually two reasons why stocks rise, namely, rising valuation and rising performance. The rise of valuation is influenced by many factors, such as capital liquidity, risk preference and market attention. It is difficult to predict directly through causality, but the rise of performance can be predicted.
An industry with growing market scale and increasing demand can benefit all participating enterprises from the development of the industry. Assuming that the scale of the industry increases by 20%, some enterprises may operate better and their income will increase by 30%. Some enterprises almost 10% increase their income, and it is easier for them to increase their profits. Therefore, there will be opportunities for the overall performance growth of the industry and it will be easier to attract the market.
2. Institutional positions and analysts study active stocks.
There are too many industries and stocks, and the main business of each company is ever-changing. It is difficult for ordinary investors to analyze and understand several industries by themselves. Then there is a simple way to do fundamental research, which is to copy the operation of the organization.
There are 0/60 Public Offering of Fund companies and more than 0/000 private fund companies in China. These companies range from a dozen researchers to hundreds of researchers, and hundreds of thousands of researchers in the whole industry, most of whom are professionals with high academic qualifications and high IQ. They work overtime, travel around the world to do research, buy thousands of first-hand data, and study the fundamentals of more than 4,000 listed companies in China. Is there any reason why there is no institutional buying?
In institutional positions, we should pay more attention to the positions of foreign-funded institutions. The funds of foreign-funded institutions need to be exchanged and invested within the scope stipulated by national laws, so it is inconvenient to get in and out, so they are held for a long time. Not far from foreign institutions, Wan Li came to our A-share market with trillions of funds, not to make contributions, but with the determination to make money. They want to make money, so do we. Isn't this a natural good job?
3. The stock is in a long-term upward trend and has experienced a period of shock (not less than three months) or decline (not less than 30%).
Organizational work is not directly copied. Suppose you bought Yili shares at the price of 33 yuan in June 20 18, and you didn't start making profits until July this year. Suppose you bought shares in Bank of China at the same time, and now you lose 20%, then the appropriate buying price is also important.
We often say "good company and good price". Good companies usually have high prices because there are too many funds waiting to buy, but the market is often irrational, and systematic risks or black swan events will occur every once in a while. The stock has fallen, and everyone is afraid to buy it.
Chasing up buying may be buying at a high level, waiting for a decline, or buying halfway up the mountain. what can I do? I think we should wait for the shock (or decline) before buying.
There are three kinds of stock price trends, rising, falling and fluctuating. When one trend ends, it will become another trend. For example, when the upward trend ends, it will turn into a shock or a downward trend. Similarly, when the downward trend ends, it will turn into a rise or a shock, and when the shock ends, it will turn into a rise or a fall. If you buy at the end of the shock or decline, there is a half chance that it will turn into an upward trend, and the winning rate will be higher than this.
A good stock is bound to rise in the weekly and monthly trends, so it is a good time to buy when it fluctuates for a period of time (such as more than three months) or falls for a period of time (such as more than 30%). Of course, you still have to buy quilts in batches, so don't worry too much. As long as the company's long-term trend is upward, losing money is not a problem, just waiting for more time.
As long as the long-term trend is upward and the long-term performance is upward in the foreign heavyweight stocks and institutional heavyweight stocks, and then buy them after shock or adjustment, I believe this simple method can achieve good returns.