If the company's valuation and net profit per share are within the range, it is easy to know at what level, then where the stock price can probably fall, investors The psychology is probably there. In this case, investors can hold on to the stock. The main reason why we can't hold on to stocks and reduce our positions at low prices is because we don't know where they will fall, and it's because of panic.

Who hasn’t been young yet? When they are young, they like excitement, smooth curves, rapid growth, rapid advancement, and new concepts. In the consumer and pharmaceutical industries, products and business models remain unchanged all year round. There is neither stimulating growth nor policy ups and downs. There is no mystery or excitement at all, and it is boring and tasteless. Growth stocks and theme stocks are so exciting. Today, you can learn about the Internet of Things and 5G, and tomorrow you can develop black technologies such as fuel cells and graphene. You can always scale up and achieve 100% or even thousands of percent performance growth, or even more. Can create policy stimulus and national will, and look like an aspiring young man.

Growth stocks and theme stocks are of course very exciting. If you do them for a month or two, they may be 350% or even doubled. However, these stocks are highly volatile, the industry has changed greatly, and the business model has changed greatly. Insufficient determination can easily lead to retracement, and retracement will cause damage to the compound interest effect. If you just want to make long-term and stable money, consumer stocks and pharmaceutical stocks with stable business models and less prone to glitches are the best choices for ordinary investors. Consumer stocks and pharmaceutical stocks have solid business models and continued profit growth. Therefore, even if we encounter a bear market, we will only kill the valuation once and for all. After killing the valuation, profits will continue to grow. The profit growth will fill the pit of falling valuations. And this declining valuation has come back again in the bull market. Therefore, a bear market is actually a good time to open and increase positions. The situation where people died after adding positions on the left was basically in cyclical stocks and growth stocks. Because the business was highly uncertain, they found that there was something wrong with the fundamentals after adding positions. If you have enough positions at a low level, rely on the stability of the business model and the continued growth of profits to resist short-term valuation fluctuations, and avoid blindly cutting meat to avoid permanent loss of principal. Eventually, more stable compound interest is achieved.

In fact, investment does not need to be thrilling. As long as you have a strong degree of certainty, just watch it grow patiently and slowly, gathering sand into a tower.