Recently, I have been thinking about China's trading mode, especially after entering this big bull market. Why is it still falling when the valuation has become reasonable? Is there a problem with the valuation or the market? When the expectation is uncertain, how should we trade? This made me rethink the left trading rule and the right trading rule.

the left-hand trading rule is the main principle for the survival of value investors. That is, before the stock market has reached the bottom, it began to intervene. The basis of its investment is that the stock market has entered a safe marginal area, and it can be safely bought and held for a long time. Right-side trading, which is the favorite mode adopted by trend investors, waits until the stock market completely sees the bottom before it starts to intervene. And China's stock market is suitable for the value investment type of left-hand trading or the trend investment type of right-hand trading.

in the past three years, left-hand trading often made us feel very confused. For example, according to the thinking logic of value investment, there is already a bubble when the index exceeds 3 points. Based on the logic of the left-hand trading thought, we sell the index at a profit before it sees the top, and then the stock index rises from 3 points to 4 points, 5 points and 6 points. The most typical case is Zhao Danyang, the originator of private equity fund, who stepped out of the 3-point market, which was led by the thinking logic of left-hand trading? A mistake? . Because, the China stock market often goes up and down, that is, it goes up too much when it goes up, and it goes down too much when it goes down. Of course, when we fall, we still have such confusion. From the perspective of value investment, it has been pointed out that the stock market has investment value at 35. If we enter the stock market at 35, I think we will lose at least 3%. Moreover, we still have no sufficient reason to determine whether the bottom is really coming. If the stock market continues to fall, we may continue to lose money. Because, in a bear market, the stock market tends to exaggerate risks and cause panic, especially in China stock market.

So, can the value investment logic of the left trading idea be used? Yes, but several conditions must be met, and this is something that no one can violate.

the funds we use must be spare funds, that is, funds that are unlikely to be used forever, or funds other than those that meet all our consumption needs and business needs. Borrowing funds, pension funds and living funds are not suitable for left-hand transactions. Of course, I personally think that such funds are not suitable for entering the stock market at all, even if they are traded on the right.

can bear the ups and downs. The margin of safety is a range, not a very accurate point. Therefore, after buying, the stock market inertia will fall. Of course, if you are lucky, you may buy the lowest point, but such a low point is definitely not predicted or calculated. This is what you encounter. We can adopt the method of building positions step by step. In fact, the left-hand trading is not in form, but in logic. As long as you don't see that the stock market is turning, you buy it on the left, because the logic of the left-hand trading is that the stock price becomes attractive and the value you buy is worth it.

hold it for a long time and don't stop loss easily. The logic here is based on the fact that you bought a bargain, and the law of market value determines that a cheap and unreasonable price cannot exist for a long time. Of course, we can buy stocks that have potential in the future but are cheap now, and naturally there is more room for appreciation in the future. As for the long-term holding time, there are two factors to consider. The market countries we invest in are in recession or growth, and how long is the growth or recession. If the market we invest in is in the growth stage, the time we hold it must be that the stock we buy is profitable, and the stock price after profit is beyond our understanding. Otherwise, long-term holding will be very dangerous. Therefore, when judging whether the stock price is attractive or not, we should consider the future of the enterprise, not the current valuation level.

Some people use the price-earnings ratio to simply judge the valuation level. For example, a company's earnings per share in 27 is .5 yuan, and its share price is 1 yuan, and its P/E ratio is 2 times. If its share price falls to 8 yuan, its P/E ratio in 27 is 16 times. But what if its earnings per share in 28 falls to .1 yuan? Instead, the price-earnings ratio has reached 8 times. The lower the stock price, the higher the P/E ratio. That's the truth. In high growth, the higher the stock price, the higher the P/E ratio. When the enterprise accelerates to decline, the lower the stock price, the higher the P/E ratio may be. Therefore, the factor that determines whether the stock market is attractive enough is the future. Just like the market now. The dynamic P/E ratio in 27 is less than 2 times, but what about the dynamic P/E ratio in 28? According to the agency's forecast, it is 17 times, but we also find that all the agency's forecasts are positive deviations, that is to say, they are optimistic. As for the performance in 28, perhaps only listed companies themselves know. Some people say that it is reasonable to judge the performance of enterprises by the willingness to reduce their holdings. Good enterprises, growing enterprises, at such a low price, if they are still willing to reduce their holdings, in addition to the problem of funds, the enterprises are deteriorating.

It can be seen that the thought of value investment under the left-hand trading logic is not a static valuation, but a dynamic thinking. In 28, 29 or even more, how can we judge if we are not business owners? Feel with the bits and pieces of our life, communicate with the staff in the industry and so on. That's because all the data we get from listed companies may be false and processed. The macro data published by the state may also have some moisture.

It is also said that the authenticity of the data is not important, but the number of people who believe in the data, especially whether the institutions with strong financial strength believe in the authenticity of the data. I think, what is false is false, and sooner or later it can't cover up the facts. This is why many investors like to trade on the right. When a fake is believed by most people, there will be a market. Therefore, in China, right-hand trading and left-hand trading have half the world. No matter what kind of logic, you must have your own investment logic and discipline.