Stock Selection Method: Some Assumptions About Stock Selection

Investors in the two tier market are busy choosing.

Investors' wrong investment view

For example, I see an investor always thinking: are we buying or selling stocks?

Why is it going up?

Why did it fall?

I think this involves some of the most basic thinking.

We should also consider whether some assumptions are reasonable.

For example, many investors believe that as long as rising stocks are good.

In fact, many stocks are not like this. If you understand the reason for this increase, you may still be stuck.

For example, investors should always understand what they are doing, for example, I am

For example, I have mentioned the concept of competitive advantage and how to quantify measurement in a few articles before selecting stocks.

For a stock that can be invested, or a stock that can be held for a long time, it is essential to have this basic feature.

Recently, many stocks, such as price increases, do not have a competitive advantage, but because the fundamentals have changed, you have to admit that this is a speculative and staged hype.

For example, an investor asked me how to give a specific value center of a stock. I think he did not understand the basic assumption of stock selection.

Why the stock price always changes is that the stock is different from the real enterprise. If the exact number of the value center of the stock can be determined, the stock market will not exist.

It can be determined that the stock is divided into types to determine whether the company has competitive advantage.

We have to do what we can do.

It is impossible to determine the specific value center, but you can judge the stock.

For example, domestic investors like to play the game, that is, guess the main operation to determine their investment direction, while other countries' investors will also consider it, but do not take this as the most important consideration.

I think this is mainly due to the problems caused by China's educational philosophy, thus affecting our thinking. For example, the education in the United States is that we are all ordinary people, so under this premise, how to do the best with the idea of ordinary people.

China's education assumes that we are all elites, and we will be able to overcome others and the main force.

When selecting stocks, think about yourself first, then think about stocks, and finally judge the "main force" may be better.

For example, in the past two years, a lot of courageous investors have made a lot of money, so they will analogy the two years' stock selection method, and think that this way can beat the market forever and make money forever.

But what is known is that the bull market in the past two years has only appeared for many years.

If the stock market is chosen in the past two years, I am afraid that many bold investors will lose their profits.

For example, some investors think that stock selection does not need any method at all. Now buying stocks will go up. The more bad stocks in China go up, the more courage they will be able to make big money.

If I want to survive and gain profits in the stock market for a long time, I am skeptical about this view.

The reason why domestic shareholders lose money is the lack of proper methods.

For example, investors think that the level of institutional investors' stock selection is better than that of retail investors, but what I see is that overseas retail investors' stock picking is even better.

This is supported by research and overseas scholars have the following explanations: institutional investors are mostly homeopathic investors.

When a stock rises and develops upward or downward momentum, they will buy or sell, because they worry that their performance will be worse than their peers, and a stock will become a driving force, which means that their peers are collecting. In order not to compare with their peers, their sheep will attack and follow suit.

As a result, investment is not satisfactory.

In addition, institutional investors are more difficult to win over the market than retail investors. Another important reason is that the scale of institutional investors is too large, which affects the stock selection ability of institutions, while ordinary investors do not have such a bottleneck.

Institutional investors mostly learn expertise and are absorbed in data collection and analysis, thus producing knowledge hallucinations, thinking that they have grasped the know-how of macro-economic direction, stock price and market fluctuation. Although knowledge is power, complex knowledge may not be more useful than ordinary investors using basic stock selection methods.

In addition, institutional investors draw commission fees and management fees, so they have to do more pactions to bear the burden of investors. As a result, they make more mistakes than they do, and retail investors do not have such pressure. They will not trade for pactions, so they will make more profits.

Finally, institutional investors manage other people's wealth and earn money is not their task. They think about how to compare with their peers. Even if the market value is greatly reduced, they will feel secure if there is anything worse.

And ordinary investors are investing in their own hard-earned money, and do everything they can to make money.

If ordinary investors in the country see the above analysis, they will be surprised to see that their eyeballs will fall. Ordinary investors are better than institutional investors.

It is true that maybe it is just because the stock investors in China are too lack of proper guidance methods, so they lose money by taking the stock market as a casino.