Stocks are a kind of financing mode for enterprises. Some high-quality companies need to develop but are not rich enough. They issue stocks to the market and use the investor’s money to further expand the company’s business. The profits obtained are shared with investors.
Generally, when new shares are listed, they are first listed in the primary market, that is, the issuance market. Raising funds is what we often say is to play new shares and buy original shares.
The new shares are listed, and after the raised funds are completed, they are traded on the secondary market. This is the market we often trade.
When we buy stocks, there is another person in the market who is selling stocks, and at this time if your transaction price is appropriate, you can close the deal. When we sell, it is the same principle.
The secondary market creates liquidity for stocks, and investors can quickly divest themselves for present value.
The primary market and the secondary market are the markets we often contact when investing in stocks. We will not introduce other markets if we do n’t have much contact.
Let’s talk about stock selection
There are some short-term bulls around who have achieved their financial freedom in chasing hot spots and frequent transactions. This group of people can’t imitate them. Generally speaking, they have ample time. With mature technical analysis, this type of cattle people cannot learn for a long time without studying and studying for two or three years.
Qiqi is also not an investor in this category, mainly because it has no time.
I belong to the value group, looking for a good company with potential, and then buying and holding it when the company’s valuation is low.
First talk about how to choose a good company
Generally, they are promoted from large to small, starting with macroeconomic analysis, then researching the development of the industry, and finally selecting the appropriate company.
First of all, you must have a certain understanding of the current economy, judge the overall future trend, and then proceed to the second step after having a certain understanding.
Next, we selected the industries that benefited, and then carried out industry analysis to find out which sub-sectors are about to take off and which ones are recovering from the inflection point.
Finally, we need to find undervalued companies in the segmented industries for long-term holdings.
To be more specific:
Macro level: first analyze the overall monetary and fiscal policies. Generally speaking, loose monetary policy is beneficial to the stock market, investors have more money to invest, and the company also has more funds for development and further increase value.
Tight fiscal policy will control the overheated economy and the stock market will weaken, while loose fiscal policy will stimulate economic development and the stock market will strengthen.
And if the policy intentionally favors certain industries, such as which industry’s tax relief, we can also know from it what industry the country is strongly supporting, will this industry be the next prospective industry?
Industry analysis: Each industry generally has four stages, the start-up period, development period, mature period, and recession period.
Among them, the return on investment is the highest in the initial stage and the development stage, but it is also relatively large due to unstable fluctuations. However, if you can pick good stocks in this part, the long-term benefits will be considerable.
The current traditional industries, such as coal, building materials, industrial machinery, petroleum, and shipbuilding, are mostly in maturity and recession, and these are not much room for growth.
What we want to choose is the emerging industry, which is in the first two stages. Correcting one point here is not to say that traditional industries are useless, as long as you can choose the industry that is being reformed and innovative, you can also make money, but the emerging industry will be relatively large in the future.
The industries that are generally more optimistic are: smart medical, new energy vehicles, military industry, drones, virtual reality, lithium batteries, information security, big data, Internet medical care, life bioengineering, etc.
Company analysis: Then select the appropriate company from the subdivided industries. Generally, you can start with leading companies, companies that will have inflection points, the most profitable companies, or companies with special moats. In addition, everyone can look at this company. Financial statements, to judge his profitability, the higher the profit, the greater the stock value.
Talk about the method of finding leading stocks: Click on the industry sector on the trading software, and then click on individual stocks in the sector. When the MACD line appears, it will show whether it is an industry leader. For example, the industry leader of the colored sector is northern rare earth. (Today there is a problem with the software and there is no way to take a screenshot. Qiqi has cried in the toilet.)
You can pay attention to the announcements made by the Securities and Futures Commission. In some favorable announcements, companies that disclose their inflection points will be disclosed. Or in the company’s financial report, look at the profit situation.
Besides, how to judge the valuation.
As mentioned earlier, because of China ’s national conditions, the two indicators of P / E and P / B are more common. For asset-heavy companies (such as traditional manufacturing), the P / B ratio is more common. ; Asset-light enterprises (such as service industry and new energy industry) are valued at price-earnings ratios.
And these data can be seen on the interface of the trading software. In general, our P / B ratio and P / E ratio are compared with historical data.
If it is lower than the historical data, it means that the investment value is high, and it may be a good buying point.
On the contrary, if it is higher than the historical data, it means that the current price is overestimated, it may be a selling point, not a good buying point.
Selecting stocks according to the value method, and adding new ones regularly, this way takes more time in the early stage and saves you in the later stage.
So you don’t need to ask me if a certain stock is okay, I have to study for a long time before I dare to answer your question. Don’t ask me which stock I bought, it’s not necessarily a buying point now.
Regarding account opening, in fact, it is sufficient to choose a large securities company with a relatively low commission. This problem has little impact.