A hundred times the value of investment [Reading Notes]

Value investment rather than speculation ). Instead of making a profit using the price-to-earnings ratio produced by the differences in valuation in different periods of the market, the company is taking the company's growth as the starting point, buying assets at bargain prices, paying attention to the margin of security, and adhering to long-term investment, let outstanding companies make money for shareholders.
Expressed as: Value Investment = (margin of security + Growth) × time, margin of security, growth and shareholding time are three elements of value investment; centered on perseverance, taking reasonable margin of security and high growth as two basic points, we must always grasp the margin of security with one hand, growth with one hand, and hard work with both hands.
The difference between value investment and other investment genres lies in the following starting points:
(1) investors are irrational, and they are often affected by the fear that stocks may fall and the greedy desire to rise stock prices.
(2) The market is not efficient. Investors who are willing to study can beat the market.
(3) The risk is not caused by price fluctuations, but determined by the internal value of the enterprise.
(4) the best investment strategy is to place funds on the value portfolio with the highest profit prospects.

Value investment goal: not to buy for reasons that can only increase by a little bit in the future, but to increase by 50% or 100% in the next two years, 15 years can increase 10 times or 20 times to buy stocks. In his "How to Choose growth stocks", Fei Xue wrote: "finding really outstanding companies, holding their stocks, and moving through the fluctuating market, it is also much more profitable than buying low-selling models. "
Value investment requirements: value investment requires a belief or even a belief. We need to endure loneliness and loneliness to suppress temptation. "There are stocks in our hands, no stocks in our hearts, and enterprises in our hearts" is the highest level. No technical analysis, no band operation skills, and no short-term speculation.
Six rules of value investment (from the Internet ):
Rule 1: Competitive Advantage Principle
Good companies have good stocks: large companies with clear and easy-to-understand business, outstanding performance, and a group of exceptional management-level companies capable of operating for the benefit of shareholders are good companies.
The most accurate company analysis perspective-if you are the only owner of the company.
The most critical investment analysis-the competitive advantages and sustainability of enterprises.
Best competitive advantage-traveling through the crocodile's wide moat to protect the company's economic Castle.
Measure of the best competitive advantage-shareholder equity return rate that exceeds the industry average.
Economic concessions-the source of super profits for Super Star Enterprises.
Stock selection is like choosing a wife-the price is better than the company.
Stock selection is like choosing a husband: mystery is not as secure
Law 2: cash flow principle
Comparison between creating a new pharmaceutical factory and acquiring a pharmaceutical factory.
Value Evaluation is both artistic and scientific.
Valuation is to estimate the value of the husband: the more profitable the more valuable
Valuation is to estimate the wife: the more conservative, the more reliable
Buffett mainly uses shareholder return on equity and the growth rate of book value to analyze the future sustainable profitability.
Valuation is love estimation: The simpler the more accurate
Law 3: "Mr. market" Principle
Greedy when others fear, fear when others greedy
Law of value in the market: the short-term is often ineffective, but the long-term tends to be effective.
Law 4: margin of security principle
The margin of security is "buy insurance": the more insurance, the less likely the loss.
The margin of security is "fierce price cutting": the lower the price, the higher the possibility of profit.
The margin of safety is "catch a big fish": the fewer people, the higher the possibility of catch a big fish.
Law 5: Principle of centralized investment
Centralized investment is the one-wife mechanism: the best, the most knowledgeable, and the least risky.
Centralized investment is family planning: the fewer stocks, the better the combination performance.
Concentrated investment is gambling: When the probability of winning is high, a big bet is made.
Law 6: Long-term Holding Principle
Long-term possession is the race against the tortoise and the rabbit: compound interest in the long term can defeat everything.
Long-term holding is the promise of the League: With your favorite company for life.
Long-term persistence is the old age: 10000 times more emotional than passionate happiness.
Stock selection principles:
(1) Industrial principles. The company's business needs to be simple and easy to understand. It has a continuous growth operation record and long-term development potential.
(2) operating principles. The operator's philosophy should be reasonable and honest to shareholders.
(3) financial principles. Focusing on shareholder return rather than earnings per share; high gross margin, determining the company's one-dollar reserve surplus should at least create a one-dollar market value.
Value Investment Operation: after buying a stock, it is not easy to buy it. If the stocks remain unchanged, the fundamentals of the stocks remain unchanged, so the stock ownership remains unchanged. The impact of economic problems on individual stocks is not the reason for selling stocks. Once the economy gets better, the stock will become more powerful, and the economic crisis will only bring down mediocre enterprises.
Value investment means: buy 3-10 outstanding stocks with long-term profits higher than the market level, small-disk growth stocks, and then patiently hold them for 5, 10, or even 20 years.
Value Investment motto:
Less money can be spent, and no money can be invested;
Life is like a snowball. The most important thing is to find wet snow and long slopes.
Today's practice determines how you can survive ten years later!