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Is Stock Trading A Test Of Your Patience?

2011/4/14 14:09:00 60

Buffett A Listed Company On The Stock Market

equity market

Unlike the casinos, the stocks exchanged in the stock market represent the ownership of enterprises, which is the division and pfer of the ownership of enterprises.

Under the background of a thriving and thriving economy, the scale of operation of most enterprises will continue to expand, and profitability will continue to increase, and the value of enterprises will continue to increase.

As a result, the value of stock as a corporate ownership certificate is increasing, reflecting the rising stock price in the stock market. At this time, all participants in the market are sharing the development of the enterprise, whether the former seller or the later buyer is making money.

On the contrary, the casino is always a zero sum game, any time people make money, and some people will lose money.

Therefore, we talk about the fundamental changes of the enterprise.

Listed company

The change of their value determines the direction of the change of stock price. The change of stock price is driven by the fundamental factors of enterprises. This is the so-called value investment concept.

After understanding the importance of fundamentals, the next thing to do is to find out companies with investment value and find out those listed companies with increasing value. This highlights the importance of research.

The task of investment is through in-depth research, forward-looking, independent and creative to find companies with investment value. Good corporate governance structure, standardized information disclosure, excellent management, unique business models, high entry barriers, pricing power, good past records, and good integrity are all factors to be considered.

After identifying excellent listed companies, you should also consider the price you need to pay.

Under normal circumstances, a good company's stock also has a good price. In many cases, the price of these stocks will have a very high growth expectation, and the price will overdraw the future growth to a certain extent. At this time, we need to have a good and basic judgement on the value of the enterprise.

If you pay too high a price, even if you correctly judge the enterprise, it will take time to keep up with the value of the business you buy, and you will not have a reasonable return on the process. That is to say, a good company is not necessarily a good stock.

Price fluctuating around value is economic law, and stock market is more like this. Human greed and fear nature and the blind obedience of group behavior aggravate this kind of fluctuation.

Buffett

Tutor

Graham

It has been said that the market is a voting machine in the short term, and it is a weighing machine in the long run.

That is to say, in the short run, the stock price is determined by the opinions of the majority and the majority of the funds. A large amount of funds chasing part of the stock will inevitably lead to the rise of the stock price. But in the long run, the stock price is determined by the intrinsic value of the company, that is, the stock market is a weighing machine weighing the stock price of the company.

The sharp fluctuation of stock prices will have a huge impact on people's psychology and behavior. In order to avoid or reduce the harm caused by this huge price change, Graham put forward the concept of margin of safety, that is to say, investors should try to find those companies whose shares are far below their value, so that the possibility of a sharp fall in share prices will be relatively small, even if the stock price falls is also temporary. The law of value and market mechanism will soon return the stock price to a relatively reasonable level.