Three Thoughts On Stock Selection

There are three ways of thinking in stock selection: forward-looking, positivist and risky.

Forward-looking thinking focuses on the changes in the political and economic environment. From the change of the political and economic environment and social pformation, we can see the opportunity for the rise of the new sector.

Focus on empirical thinking

In the short market, the forward-looking thinking school is useless, because the forward thinking conclusion may have to wait until long.

If the damage to the bear market is not very urgent and very strong, twenty percent of the stocks will still go against the trend, but these stocks are able to stand up for empirical research.

In other words, stocks that can go against the trend tend to be very profitable stocks. But because the short market is too long, many stocks have fallen to a reasonable price. As long as their profitability is very stable or their growth is relatively high, there will be an upward trend in the counter trend.

However, this rarely occurs in the first half of the bear market, most of which appear in the latter half.

If the short time is not long enough, there will be relatively little chance of an upward trend.

Therefore, empirical thinking often finds many stocks that are against the trend in the latter half of the long bear market, so that they can still make profits in bear market.

Risk thinking is the biggest feature of virtual economy.

The general risk thinking is to discuss how to avoid risks, but some risk thinking is to discuss how to use risks, and the two are the scope of risk thinking.

Avoiding risks is mainly achieved through stopping or stopping profits. However, the real stop loss is mainly based on the condition of stop loss, and the price stops and losses as a supplement. When the rising conditions remain unchanged, after a sharp fall, it often pulls up quickly. Only when the rising conditions change, the price stops to become more important. It is more urgent.

As for making money by using risk, it belongs to another realm.

Using risk to make big money is a special situation. It does not make use of time to make big money, but uses time to make big money.

The timing is quite secretive, but once it starts its speculative effect, it rises quickly and fiercely.

If it is not a big opportunity, it is more difficult to make use of risk to make big money.

So hedge funds' primary task is to keep looking for opportunities, and then once they catch the opportunity, they will get a big vote.