Recently, with the boost of the US stock market, A shares, including the world’s stock markets, have bottomed out. As of press time, Dow Jones shares rose 2.3%. After experiencing a sharp drop a few days ago, it seems that it is beginning to blossom again. In the previous rapid decline, everyone’s performance was different. One is a panic of falling, pretending to die after an extreme decline; one is adding a position to a fall, although there is a panic, but constantly adding positions, buying and selling continuously, and longing China; one is a fall to cover a position, selling on rallies , Falling and adding positions, combined with macro analysis, to judge the buying point of falling. These three performances basically summarize the current state of the chives in the market. However, investors in these three states have not made any money, and they are constantly staring at the k-line in the market and working hard.
So what kind of investment is a stable and profitable investment?
The investment of Buffett’s founder, Graham, is an example of value investing. The cigarette butt investment strategy advocated has never been admired by the world. But in real life, there are several investors who can achieve the integration of knowledge and action, and several investors are really willing to work hard to study the value behind the stock. Human nature is lazy and at the same time self-deceiving. They would rather believe in others, respect experts, than believe in themselves. Personally, value investing is not a superb technique, but it is because he has the courage to hold and wait for the value to return when the stock plummets or even drops below the purchase price or value center.
Treat investment stocks as an industry or a business. Not simply buy low and sell high. As a business, should you go and see which products are popular in this market, where you can buy cheap goods, and where you can sell good prices, should you first do a market survey, market analysis and Business planning, etc. Regarding investment selection, he mentioned several principles that are worthy of reference. First, choose a monopoly industry; second, choose the industry leader; again, buy as cheap as possible; and finally sell it at a high price. Choosing an industry means choosing an elevator, which determines the lower limit. And people have to buy me, people buy me.
This reminds me of a report I saw earlier that when it comes to investment, the so-called expert said that choosing a company must be a company that can make money without effort, but it is actually a monopoly. And this business, this company can repeat, or call replication. Our most important job is to find such a company and buy at a low price.
We have to ask again. Since you said that he is a monopoly and simply making money, is he sure he will be welcomed and the price is high. But yes, but there is not. For example, everyone thinks that medicine is good and profitable, so his valuation is very high. But in the context of this plunge, isn’t medicine the same killer valuation? This returns to Mr. Graham, who said that he is quoting every day, tempting you to buy and sell. The quotes given by Mr. Market are constantly changing and always right, at least most of the time. But he was a little neurotic and had a temper. This is what we need to use him to make money.
Mergers and Acquisitions
All of the talk above is about the Tao. Now talk about the art. The final point of investment is still valuation and then buying. Valuation is about to talk about analysis. I personally highly value the valuation modeling of M & A. From the company’s history to the macro, the foothold to the discounted cash flow valuation. Of course, these cannot be done overnight, nor can they be completed by one person. Sublimation requires continuous time accumulation.
But I think there is one thing missing from his valuation, which is financial analysis. He can see the company’s future prospects, but he may not see the details in the financial statements. These details need to be analyzed from a more micro perspective, which I will mention in subsequent articles. Because this is my specialty and also something I am good at