When investing, an important principle for investors is to treat themselves as the owner of the company and make decisions from this perspective.
Treat yourself as the owner of a listed company
Graham once concluded that there are three key points that need to do a good job of investment: First, don’t think that what you buy and sell is only stocks, but really hold the shares of the company behind it; second, leave enough safety margins for investment; third, understand the various behaviors of "Mr. Market" and grasp the investment opportunities brought by the irrational behavior of "Mr. Market". If investors really regard themselves as the owner of listed companies, they will not often participate in short-term transactions and will consider them longer-term.
It is not easy to become a value investor. It requires overcoming the original weakness of human nature and investing a lot of time and energy to research.
First of all, value investing is an investment that is against human nature, and value investors are often lonely. Most of the time during the evolution process, humans survive by following the group. Group nature is a characteristic rooted in the deep mind of human psychology. As a minority in investment, value investors require that information and investment judgments are not affected by others' opinions, but mainly based on their own analysis and logic to think independently.
Secondly, value investors must invest a lot of energy and time to carry out in-depth and professional research. Value investors may wish to benchmark academic researchers for their research in industries and listed companies, maintain interest and curiosity in things, and be able to research and track them. When investors accumulate professional knowledge to a considerable degree, they are likely to be able to accurately grasp the investment opportunities.
Be a long-term and cautious investor
Management and entrepreneurs are the elements that value investors attach special importance to when studying listed companies. The founders of listed companies generally have a strong personality. Some past information and history will tell investors what kind of person they are. Investors should pay attention to collecting and researching them. In addition, investors can also observe from some details and conduct field investigations to understand the characteristics of the entrepreneur from the company's employees, upstream and downstream partners, and their peers, and their true character, ability and vision.
In the process of conducting research, value investors need to have sufficient ability to obtain accurate and complete information, which is the first step to doing a good job of analysis. In order to obtain accurate and complete information, value investors need to put in a lot of energy and time. After research, they must have enough confidence in their conclusions and analysis. In this way, when the company's stock price fluctuates greatly and is significantly lower than the intrinsic value, they can be bravely bet and buy.
Step 2, value investors need to have their own core concepts. There may not be many good investment opportunities that investors can truly grasp in their lives, there are only a few, and there may be only a few core concepts they can rely on. This key core concept comes from one's own long-term learning and accumulation, and one's lifelong learning with curiosity and curiosity, so that one can discover investment opportunities that the general public cannot find and successfully grasp them.
seeking a margin of safety is also an important difference between value investors and other investors. Value investors should regard themselves as the holders of the company, have a long-term vision, and be a long-term and cautious investor. But at the same time, since value investors cannot control the company's management and cannot truly control the company's operations, they need to provide enough safety margins for their investments and protect their assets. Most investors in the market are not value investors. They are keen on trading and it is difficult to overcome human weaknesses. It is precisely because of frequent trading driven by human nature that causes market fluctuations. When the stock price is significantly lower than the value, it provides value investors with opportunities to intervene.
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