If the majority of investors in the stock market are in stocks, then Mr. Buffett could be a real investor dismissive of the market. Buffett inherited his teacher Graham's "cigarette butts" theory and carried it forward. The so-called "cigarette butts" is a kind of stock which is worthless in the eyes of the average person, but still can smoke a few mouths.
This involves how we understand "value". For example, Internet entrepreneurship, different entrepreneurs pay attention to different "value". Some people think that traffic is value, even if the flow of garbage, through a variety of alliances, can be realizable. So the core is not the flow, can become the value of the present is. Li Yinan, a former CTO at Baidu, said to Forbes: "Technology has to be able to be ' realizable ' to be of value. "I think he has put Baidu to the same height as the garbage station."
Of course, all entrepreneurial activities, the final is about to be changed, but what the entrepreneur is concerned about what, the pursuit of what, or there is a big difference. It should be a result, not a value itself. This is like a person can not pursue the goal of living, live a trip, can not be like a zombie. So we pursue the value of being alive, not living itself.
Value should be what you provide for the user, for the society. To meet the needs of a user is to provide value. A higher level of value is to guide and create user needs. Like the ipad, a lot of people think, what's the use of something that's stuck between a phone and a laptop? You feel useless now, because this value has not yet been created.
Back to Buffett's theory of value investment. Buffett believes that there is a lot of value in the market, but has never been a concern. And those that are overly concerned about are likely to be overvalued values. So, in Buffett's view, value is related to time. Today bargain Buy, tomorrow every high sell, is speculative. The real value, need to pass through time sharpen, only then can glow. Buffett will put some of Berkshire's stock as a birthday gift to his children, but not allow them to sell, this is Buffett in his values forcibly exported to his children.
Two years ago, I used to do a mock investment, which is to choose some technology and new media stocks, assuming that I buy one share for each stock and hold it for a long time. Because I am optimistic about the long-term economic impact of science and technology. My selected stock and two-year transcripts are shown in the following illustration:
A total of 13 stocks, each buy one share, the total investment of 1130 U.S. dollars. As of today, among them, 8 stocks were higher than two years ago (according to the increase in order, Tencent, Baidu, Amazon, Apple, perfect time and space, Google, Sohu, Microsoft), 5 stocks fell (sorted by decline, followed by the audience, Yahoo, Alibaba, Sina, EBay). But now the book value of these shares is 1821 dollars, I two years net profit 691 dollars, return to 61%.
Two-year rate of return of 61%, does not look much, but compared to the same period of market conditions, you can see the difference in value. The Dow Jones industrial average rose only 37% in the same period, the Nasdaq rose only 7%, and the standard and poor 500 index fell by 14%.
Investment and entrepreneurship, in principle should be the same, pay attention to value, in order to get long-term returns.
