How did I fry from 200,000 to tens of millions of? (The essence of deep secret investment)

Function Introduction quantification and hedging--quantitative investment and hedge fund information platform.

Let's PK. BYD and Vanke at the end of February 2014: BYD's closing price of 56.91 yuan in the month, total equity 2.35 billion, the total market value of 133.7 billion, Vanke February close price of 6.72 yuan, total equity 11 billion, the total market value of 74 billion yuan. BYD's market capitalisation is almost twice times that of Vanke.

Then look at the profit of the two companies in 2013: BYD earned only 550 million yuan last year, PE is 243 times times, Vanke last year made 15.1 billion yuan, PE less than 5 times times. Vanke earns almost 30 times times as much money as BYD.

If the investment by PE, the choice of who, at a glance.

But oddly enough, Mr. Buffett has a lot of expensive BYD, rather than buying cheap Vanke B. It's too easy for Warren Buffett to buy Vanke B. And in the Hong Kong market, PE is 3--5 times the real estate company shares a lot, Buffett is not because of illiquidity, can't buy enough not to buy.

Obviously, PE is not the essence of investment.

Then take a look, Pb, Vanke PB less than 1, BYD's PB more than 6.

Obviously, PB is not the essence of investment. The difference between 1 and 6 is so great that it can be said to have reached a qualitative difference.

If we say that BYD and Vanke are still in different industries, valuations are not very good comparisons, then let's take a look at Maotai. The company is still the original company, PK Maotai 2007 and 2013.

January 8, 2007, Guizhou Maotai closed 84.86 yuan, last year's performance of 1.64 Yuan, pe=52 times, very high, but the stock price on this basis, the year rose to the highest of 230 yuan, the rise nearly 200%, amazing.

January 8, 2013, Guizhou Maotai closed 210.84 yuan, last year's performance of 12.82 Yuan, pe=16 times, Medium, but on this basis, the year fell to a minimum of 122 yuan, the decline of nearly 50%, equally amazing.

This is strange, the same stock code, the original 52 times times the high PE, the share price can rise 200% in a year, and seven years later, PE reduced to 16 times times, the share price fell nearly 50% in the year!

Moreover, the seven-year earnings per share increased from 1.64 yuan to 14.58 yuan, almost 10 times times higher! What about the stock price? From 2007 end-of-year closing price of 230 yuan, down to 2013 end-of-year closing price of 128 yuan, almost halved half!

Obviously, for Guizhou Maotai such a stock, PE,PB is not the essence of investment.

Is China's stock market immature? Let's take a look at the U.S. stock market.

Tesla electric vehicles: 2012 losses per share, the 2013 stock price rose from $33.87 to a maximum of $265, within a year, the rise is nearly 7 times times. The company has so far lost.

Take a look at Warren Buffett's Wells Fargo: about $3.89 a share in 2012, the closing price of Bitesla electric cars at the end of 2012, but only up from $34.18 in 2013 from $49.29 to the present, a mere 45% per cent in the context of U.S. stock great bull market. Compared to 7 times times Tesla electric cars, what is the situation?

Tesla is losing money, unable to calculate PE; Wells Fargo is 12 times times more profitable than PE, and is managed by star managers.

It seems that in the US stock market, PE and PB are not the essence of investment.

Let's see what the gurus say. Aunaire: Evaluation of low PE stocks: "... It is thought that the income stock is more secure, so as long as the stock is held securely, the dividend will be paid. Illinois Continental's shares plunged from $25 to $2 in 1984, while BofA fell from $55 to $5 in early 2009. ”

For high PE stock evaluation: "... The above analysis shows that if you do not want to buy growth stocks at a price higher than 25--50, then you automatically eliminate most of the best investment opportunities to choose! (Miss the vast majority of stocks in U.S. stock history, such as Microsoft, Cisco, Apple, Facebook, Amazon, Google, etc.)

Soros: "It won't work if you take every move of the financial market as part of a mathematical formula." Mathematics cannot control financial markets, and psychological factors are the key to controlling the market. ”

　　The essence of investment is gambling, not gambling

First of all, the so-called investment, refers to the stock level two market investment.

I tend to regard the essence of "investment" as "gambling".

Although the word "gambling" is not very pleasant, and perhaps investment is not entirely equal to gambling, I think the word gambling is very close to the nature of investment. Moreover, the ability to restore investment to the gambling people, more easy to make money, more rare losses.

In addition, I think of a nice elegant word, instead of "gambling", that is, "game." But I prefer to use the word gambling.

The essence of "stock" is a code; the essence of "the market" is a casino; "Company", that is, can not eat, nor drink.

In fact, the company makes money, what can investors get? If the company loses money, what will investors lose? If the market to the company's profit and loss does not reflect, do not rise and fall, investors do not get anything, nothing goes without losing.

The company itself does not bring us any benefits, even dividends. Cash dividends and bonus shares are the same game, because eventually they have to force the right to remove. What happens to cash dividends if the market does not fill the right?

As a result, investors ' profits come entirely from the market, not from the company.

The company is a special dice, dice More, the number is compiled, is the stock code; Every day a lot of dice in a big plate in a sprinkle, everyone to guess its red and green, red is up, green is falling.

Is it red? Is it green? It doesn't matter. The key is to guess. Long, guessed the "red", on the profit, short, guessed the "green", still earn. Therefore, in a mature market with short mechanism, the company itself is indifferent. Companies to make money, shareholders may lose money, the company's losses, shareholders may instead make a profit.

The stock market is a casino, any investment, unless it is a fully deterministic arbitrage, otherwise it is outright gambling. "The stock market is usually unreliable, so if you follow others in the Wall Street area, your stock business is doomed to be very bleak." The implication of Soros's remark is that the stock market is a casino and only a few can make a profit.

"The Chinese stock market is not even as good as a standard casino. Mr. Wu, a famous economist, made the above-mentioned assertions when he was interviewed by CCTV. Unfortunately, Wu old only see the Chinese stock market is a casino, but do not know that the U.S. stock market is also a casino, the world's stock market is a casino just. (because I have investments in the Shanghai-Shenzhen stock market, Hong Kong stocks and U.S. stocks, I basically have the right to speak.) )

If only see investment is gambling, is not enough. It must also be seen that investment is not entirely gambling.

Gambling, the dice face up or down, are 1/2 of the opportunity, from the old "Day" to the fair decision.

But the company is a special dice. Its direction, at different times, upward or downward opportunity is uneven, and overall on the opportunity is greater than the opportunity, from the "human" psychological factors.

The psychological factors of human being are determined by a series of external objective factors and self-subjective factors.

The essence of investment, what exactly is. Gambling? I'm sure, and negative, wavering. In fact, the kernel of things, itself can only be gradually approached, and can not be determined.

The essence of investment, whether this: what is the homophonic of the stock market? is a "story". Is the stock market a place where economic stories are told?

"Economic history is a drama based on fiction and lies, and economic history is never based on a real script, but it paves the way for huge wealth." The practice is to recognize the illusion, put into it, before the illusion of public awareness before exiting the game. ”

Soros's assertion makes me feel that I have been infinitely close to the true meaning of the stock market, close to the essence of investment.

From 1000 to 6,124, the stock market tells a story of urbanization, a story that kills or sells;

From 6,124 to 1664, the stock market tells the story of a subprime crisis, is a death can not buy the story;

From 1664 to 3,478, the stock market told a 4 trillion story;

From 3,478 to 1949, the stock market is telling the story of who will pay for 4 trillion. As a result, none of them want to buy. Banks, and do not want to pay, desperately publish bright performance, even at the expense of cash dividends to prove that performance is true. As a result, the market froze.

The above mentioned Vanke, in the story of urbanization is the protagonist, so 3 years rose 30 times times. 2007 Vanke's earnings per share of 0.45 yuan, the price of up to 40.78 Yuan, p/E can reach 91 times times! --This is the main character of a epoch-making great story. The story is finished, but "it paves the way for a huge amount of wealth."

Now, Vanke's PE is less than 6 times times. Why? Because Vanke is a national real estate company, the main process of urbanization in the country has passed, Vanke's story has not been popular. Is there a story of urbanisation? Some. That is post-urbanization, or regional urbanization. For example, the story of Hainan real estate, such as the Shanghai Free Zones story, and now the story of Baoding and so on. These stories are no less violent than Vanke. Waigaoqiao, from 6 to more than 60 pieces, only spent nine months!

Vanke temporarily pressed the table. What about BYD? What is the problem after urbanization? More people, cars will be more, car exhaust is bound to be more, the city's air will be what? Real estate companies in China are not missing, but there are not many electric car companies that can solve automobile exhaust. So, BYD became the protagonist of the new story, the new film staged. So, you have to admire Warren Buffett, who in the years before the layout of the high-PE BYD, told a new story.

BYD, in the end, must have been a chicken feather, never mind-"it paved the way for the accumulation of huge wealth."

The new story will come again.

In fact, PE is part of the story or a version, a style. The person who told the story said: "I do nothing, long-term hold on the line, then by dividends on the cost recovery." "Maybe it will." So, to talk about PE, but also to tell stories. It's just that there are few successful cases in history.

　　Medium: What should I do?

　　First, what to buy?

You can buy anything, as long as you can make money, and never restricting. For example, only buy PE low, for example, only buy consumer goods, for example, only buy Internet shares, for example, only to invest in the gem, for example, only buy small stocks, for example, only buy blue chips, for example, only buy high growth ... It's all in the restricting.

The key is to guess the price direction and the corresponding time of a certain subject. You guessed the rise of a stock, you can make a profit by buying; you guessed the fall of a stock that can be sold by a coupon, so you can make a profit.

I used to focus on the real estate Unit (Vanke), later focused on consumer stocks (Maotai), and then later focused on the pharmaceutical unit (Fudan Zhangjiang), and now let itself unswervingly look for a small company that can become a great company. I feel that this is all in restricting. Investment, it should be the sea of rivers.

The ability Circle is a pseudo concept ... As for specific industries, types of companies, markets (A-shares, B-Shares or H-shares) should not be the limits of building capacity, where you think there is a potential chance of reversal can be invested in that field. ”

But Soros also said: "The market is stupid, you don't need to be too smart." You don't know everything, but you have to know more than others in one respect. ”

In general, I think: first, the investment should be satisfied hundred rivers, second, some industries, some phenomena, you are more easy to grasp, you can pay more attention. In the breadth and depth of investment, should be enough.

　　Second, when to buy?

This is the key. and different factions have different criteria for judging.

Graham: "I boldly refined the secret of successful investing into a four-word motto: The margin of security." "His method is to calculate the reasonable value of the company first, and then wait until there is a 4-60 percent margin of security to consider." The old method is very good, but there are shortcomings, that is, the old only considered the value of the time, but did not consider.

Buffett: "Would rather buy a good company at a reasonable price than buy an ordinary company at a cheap price." This sentence, how many people lose money!? Because there is no standard, good company has no standard. Instead, it makes people careless in buying. Resolutely not adopted.

On the question of when the level two market buys, I think the old point of view, can learn, Buffett's point of view, must resolutely give up. On the question of when to buy, Soros, Liver Moore, Aunaire, have given me the most wonderful answer. Their approach not only solves the problem of what to buy, but also solves the problem of when to buy, big old more outmanoeuvred.

Soros: "The financial world is turbulent, chaotic, disorderly, and can only be drawbacks by discerning the affairs." It would not work if the movements of the financial markets were taken as part of a mathematical formula. Mathematics cannot control financial markets, and psychological factors are the key to controlling the market. Rather, only the instinct of the masses can control the market, that is, it is necessary to understand when and how the masses will be gathered around a certain stock, currency or commodity, and investors have the possibility of success. ”

Soros's programmatic words emphasize the importance of timing-"when and how to get around a certain stock". But he donuts, after principled words, did not provide specific reference indicators.

Liver Moore, the most brilliant star in the two-class market in the US, has answered the question very well, and he has given an important indicator of buying: "Every time the market comes to the key point, he can always make money." "As to how this key point is calculated, Liver Moore has a set of methods for recording stock prices, which is easy to grasp.

Aunaire to Liver Moore as a teacher, supplemented by a series of buy signals: the signal system called "Canslim". This can be explained in principle:

c--Annual Report: Companies in the past 2--3 years of slow growth, such as 7%, 8%, 9%;

a--Quarterly: The company recently 2--3 Quarterly performance accelerated growth, such as 15%, 25%, 50%;

n--News: The company has new events, such as new management, new products, new acquisitions and so on;

s--market Capitalization: The stock market value is not large, reflected in the deal on the increase in volume, while the decrease in volume, break the daily turnover of at least 50%, enlarge 100% better;

l--Faucet: The industry is best in the current market leading industry, a stock trend is best the leading trend of the industry;

i--institutions: In the past there is no institutional concern, and now began to have 1--2 institutions began to pay attention;

m--trend: The market is best to stabilize the match, or the unit in the industry index stability or rise. Of course, the total number of stocks that fit the system is very small, and the majority of them will be good.

These western theories are in fact consistent with the ancient Chinese thought.

The Book of Zhouyi has: one, the dragon do not use. Even if you find out what Graham says is a security marginal value unit, don't buy it. Because, the valuable stock, has the margin of security more, if the time is not, what do you take in hand?

Two, the Dragon is in the field. This is Liver Moore's key price, which is what Aunaire called the Canslim moment, which is what Soros said the market money began at some point, in some way gathered around a share. Buy!

Three, Xi tiglate if Li. This is the normal adjustment after buying, do not be afraid, continue to hold, do not be shocked to dismount, or perhaps a good opportunity to do so.

Four, or leap in the abyss. The dragon had jumped out of the abyss and stood on the hill, as the stock price had been adjusted and stood on the resistance level.

Five, the Dragon in the sky. The rise in the share price is much more than people's imagination, the dragon flying freely in the sky, the share price in the sky How to rise on how to come, really so-called infinite scenery in Xianfeng. No longer suppress the stock price of things, any bad is interpreted as good, the price has no solution to the plate, everyone is profitable, the market only a small number of chips to take profit, funds such as the flood of the general influx of its chips a grab and empty, sell people regret unceasingly, wringing. At this time, the market was also driven by its rise, and the company also issued a variety of good news, performance also greatly exceeded expectations.

Six, Prince have regrets. But stock prices have begun to seriously overdraft future performance, as the leading industry, leading enterprises, PE or nearly 100 times times, people to the company's imagination more and more full. This time, the new era may come quietly, the old story let the foresight already bored, they began to cash chips.

No wonder Confucius said: "50 to Learn" Yi ", can be no greater than also. "The thought of ancient Chinese sages, you have to serve!"

Now, again, what is the essence of investment?

My point of view: The essence of investment is gambling, not entirely gambling. Soros's view: The stock market is a place where economic stories are told. In fact, Liver Moore a good answer to the question, his view: "There is only speculation in the stock market, no investment." "It turns out that we're talking about something that doesn't exist at all. Liver Moore further said: "Speculation is a cause, not a gamble." ”

Here's an example of an image that illustrates the difference between investment and speculation: suppose there is a huge mountain, denoted by a huge letter "a". So speculation is on the left side of the mountain, in the mountain stage to buy, and investment is on the right side of the mountain, in the downhill stage to buy. Speculation = "Cast" + "machine", cast is shot, machine is the Secret (Heaven's Hint). God has given orders, shouldn't it be shot? and investment = "Invest" + "capital", "investment" is input, "capital" is the funds, with their own funds to fund others.

Why is it that investment is gambling, but speculation is not? The biggest feature of speculation is: the timely discovery of the secret, when the sky hinted at the time of the shot, and the most important feature of investment is: the more you buy, the essence is gambling. Logic is simple: in the knowledge of the wrong judgment, speculators will promptly correct, and investors will refuse to admit the mistake and the wrong, who gambling at a glance! If a person thinks he is making money by investing, it must be wrong, he is actually coincidence to make money. Speculators not only earn more than investors, but more importantly speculators lose less than investors. The following sentence precisely explains why investment is gambling, and speculation is not? Liver Moore: "Pure speculation in the stock market to allow the loss of money, and pretentious investors in the wave of investment with the huge losses caused by the big loss is only a paltry." "Because" speculators make a mistake, the market will tell them right away because they are losing money. Once you find that you have made a mistake, you must immediately clear it, take the loss, do not let emotional control, but research records to find out the cause of the error, wait for the next shot opportunity. ”

Summary: There is only speculation and no investment in the stock market. If hard to say investment, then the essence of investment is gambling. Speculation is a cause, not a gamble, the nature of speculation is when the sky signaled when the timely shot.

Figuring out the nature of the investment, a series of problems will be solved.

　　Who is holding it?

A: "Unless the stock is on the rising channel, it is held because it can make a profit." Otherwise, resolutely does not hold stock because it is in gambling. "The reason is simple, who do we hold the stock for?" We are not holding for a listed company, not for Warren Buffett, we are holding it for ourselves; why do we hold stock? We do not hold for honor, not to be a shareholder, if holding a stock will cause loss, why do not choose to sell early?

　　When to sell?

Once the stock starts to bring us a loss, it should be sold immediately, otherwise it is gambling. Liver Moore: "There's a kind of intuition that you know you're wrong without a market notice, and that it creates a tipping-off subconscious that comes from the inner signal of the market's past performance." "When stocks fall, do not be lucky and fancy:" Everyone has the basic human characteristics, is the general investors face the number one enemy-the hopeful idea must be expelled. ”

　How to prevent?

Speculators always put the principal in the first place, so: 1, the layout must be scattered, 2, the position must be controlled, 3, the mentality must be serious, 4, the action must be diligent, 5, the mind must be focused; 5, the operation must wait; 6, must follow the trend and 8, do not contrarian and 9, speculation must respect market. "Taking risks is beyond reproach, but remember not to gamble," Soros said. Liver Moore points out: "The fatal mistake of speculators is to get rich overnight." They abandoned the opportunity to accumulate 500% of their wealth in the 2--3 year, instead pursuing a 2-3-month sitting in Jinshan. Even if you do, you can't keep. ”

　　Next: We must correct those very harmful ideas?

　　mistake one: "The more you fall, the more you buy, because the more you fall, the more valuable." " as said before, even if there is a value of security margin of the stock, there is no need to buy immediately, to wait until the market reached a consensus, the stock price no longer fall, and with the good news of the decryption, the stock price out of the bottom, go to the key price when the buy. Because the stock market is not a sensible place, no one can predict where the bottom is? Mr. Market sometimes really scary, fall and will fall, underestimated will again underestimate, under the floor there are underground layer, we only have to wait patiently. How many people died in the bottom of the road. We have to buy not only "value", but also "opportunity". It is not the time to report. Therefore, the correct approach is: buy the observation bin, always follow, waiting for the opportunity, not to see the rabbit not to spread the eagle. There's a lot of security margins, and you're not able to privatize all of them.

　　error Two: "Investment is to buy a core competitiveness, a moat of the company." "There is no" moat "in the world, and there is no" core competence ". Qin Shihuang, in order to create a moat, the construction of the Great Wall, the result was destroyed by the people. The so-called "core value" is a concept of old decay-the disadvantage of which is that he makes people look at higher places because they have "core values", and he lets people look at the low, because there is no "core value". The so-called "core competencies" is a trick that bluffing is the wrong thing to do. When people say that a share has a core value--it's a reason to force you to pay a high price when the dealer sells it to you, there's no core value--it's the reason the dealer wants you to sell your chips. That's all.

　　error Three: "Value investment without risk" or "value investment". "If you compare the stock market to a casino, there are people who defy it and divide the risk into four levels: the first level is the knowledge of the stock market, the stock market as a casino, and think this is the smallest risk in the stock market." The second level, the smattering of the stock market, "I always think that the smattering of the stock market is more risky than the knowledge of the stock market, they are the main body of the stock market because of various scams and traps." "The third level, the stock market originally only smattering but" self-thought "already all know the whole solution. The fourth level, but also the most extreme risk, is within the risk of the surrounding but the risk itself lacks "consciousness".

　　error Four: "Such a company cannot buy." " I did make a lot of money in Hong Kong stocks, many of them doubling in a year, some up 50% a week, and some up 30% a day. Basically no loss. But I can actually make more money. I found a lot of stocks, and some of the old investors in Hong Kong exchanges, the results by these old shareholders a "such a company can not buy" to the negative. After hindsight, these can't buy the company, instead I bought a better, one of which was elected last March and Fudan Zhangjiang, the result is higher than the Fudan University, Fudan Rose 200%, and this "can't buy" the company Rose 500%. I really understand a word: "In the stock market, only a few people can make money." "If someone tells you:" Such a company can not buy. "may be one of the reasons why you should be serious about it. From then on, I learned the lesson, the snowball focus on the friend control in 5 people. I don't care what they think now, the key is what they think in the future.

(Source: Volcanic wealth)

How did I fry from 200,000 to tens of millions of? (The essence of deep secret investment)