Retail Must See! Six Laws For Smart Investors

- buy

Maybe every ordinary investor has the experience of making money, but the result of the final profit is not ideal. Many people can not realize the continuous increment of wealth through the stock market.

The key problem is that ordinary investors like to invest in stocks in a booming bull market.

Many people do not consider investing in stocks as an investment, nor can they be regarded as a business.

In the eyes of many investors, stock trading is like playing mahjong. They are also willing to try their luck in the market.

Therefore, even if the share price has risen 3-5 times, as long as they believe that there will be a daily limit (maybe this is the last trading limit), they will have the courage to hold another night.

Wait until the second day of opening, the result is not the daily limit, but continue to fall, or even down.

At this time, these investors often do not give up. They are very annoyed that the pies that they should have been snatched away by the market, so they must wait until the stocks in the stock market go up again until a limit plate is sold, but Mr. market is not so good.

In the end, market investors leave most investors with regrets and regrets.

Investment income is a function of buying price. You buy high and yield is low; no matter how careful, you can not make mistakes, you can only abide by the margin of safety.

That is to say, no matter how hard the stock is, you can't control the consequences of making mistakes.

If you want to get long-term high returns, you must ensure that the price is cheap enough.

For example, I know that many venture capitalists or equity investors buy shares of potential companies at a price of 3-5 times earnings or even lower.

But when equity flows to the primary market, it is 30-50 times or even higher to sell to ordinary investors.

If you wait for the two tier market to buy, then the average investor can spend as much as 80-100 times.

Obviously, in contrast, the first institutional investors who get the shares get more benefits.

And if investors in the two tier market still want to buy, he is fooling around.

Obviously, from a general perspective, yield is the reciprocal of P / E ratio.

The higher the P / E ratio is, the lower the yield.

Unless you think the company price is seriously undervalued, you need not use the higher P / E ratio to buy shares in the secondary market.

Of course, we do not deny investment opportunities in the two tier market, but this investment opportunity often comes from the bear market stage.

Therefore, Graham believes that the bull market is the main reason for ordinary investors to lose money.

Since a prosperous bull market looks the most attractive, stock prices are often several times the bear market. Therefore, investors in the bull market need to take greater risks.

To be careful about stock prices, shop like supermarkets, not to buy cosmetics; the real loss is always after investors forget to ask how much money is, and high growth is not equal to high profit.

The risk of rising stocks increases rather than decreases, and the risk of falling stocks decreases rather than increases.

Calculating the stock price does not mean that the stock price should be delayed when the share price is undervalued.

More precisely, when we know the intrinsic value of the company, we should learn to compare with three stores, and try our best to buy a good and inexpensive company instead of buying and selling stocks arbitrarily.

Therefore, the best way to buy the most cost-effective stocks is often to counter the trend.

When most people withdraw from the market, when a lot of people shut down the stock, it is a better time to buy.

But the most difficult part of investment is to stop blindly following the mentality and maintain independent judgement and personal courage.

The courage and determination to buy a favorite stock is not something that ordinary people can afford to take on the world. The best investors often have extraordinary courage and calm mentality.

It is very difficult to beat the market average. If you still want to try, first, you need to have an internal rational strategy; second, this strategy is not popular in the market.

It is possible to beat the average earnings level of the market, but it is hard for ordinary investors to pursue this.

It is a dream to conquer the market, though it is hard for many people to achieve it, but it does not mean that there is no opportunity.

In fact, it is not important to defeat the market, especially for ordinary investors, as long as they can win the inflation level.

In terms of long-term returns, an investor can achieve a compound interest rate of 6%, which is relative to that he bought assets at a price earnings ratio of 16 times.

If you want to pursue higher returns, you can only lower the P / E ratio.

{page_break}

Gold is not a natural anti inflation tool. Gold prices were not as good as deposits in 1935 to 1970.

Gold is not a tool against inflation.

Historical data show that in the US and in China, the long-term benefits of gold can not even win inflation.

Some people have illustrated that in the early days of the country, 5 two gold could buy a set of quadrangles, but now 5 or two gold can buy a set of imported composite sofa at most.

Now some people advocate investing in gold, but it is also a behavior of excessive secretion of adrenal glands after the rise of gold, and there is no rational analysis and evaluation of intrinsic value.

In the view of value investors, any commodity has intrinsic value.

Even for an ordinary white-collar worker, we can calculate its intrinsic value based on his future career life and the discount of future cash flow from his existing assets.

Speculation is not a bad thing, but the fatal threat is speculation, but we believe in investment.

When it comes to speculation, it is like a gambler who is sensible. He takes only 100 dollars to the casino and locks the coffin in his home safe.

Speculation is gambling, gambling must not bring all the property, otherwise it is gambling.

We do not advocate speculation and gambling, but we can not prevent some people from being enthusiastic about it.

So it's okay to make a small bet, but don't bet on all your life.

Of course, in some people's eyes, investment may also be speculative, as in the face of value investors, it is an investment behavior to dare to bear in the bear market. But for most people in the market, buying in the bear market when everyone is ready to withdraw is a kind of foolish behavior.

There is no denying the fact that the prevailing profit models in the market are so strange that ordinary people can not distinguish them. Value investment, portfolio management and technology analysis may also have opportunities for making profits.

However, from historical data, it seems that only value investors have long-term unbeaten performance.

In the eyes of value investors, equity investment is not a stock market. Instead of hitting the keyboard every day, it does not need to pay attention to the flow of the main capital in and out, not to mention the risk of portfolio with variance.

Value investors believe that the key to all investments stems from the relationship between the intrinsic value and the price of the company.