"Today is the 949th day of Muzi reading with you"
The difference between investment and speculation, Graham has the following description in the book " Smart Investor ": "The most realistic difference between investors and speculators lies in their attitude towards changes in the stock market. The main interest of speculators is their attitude towards changes in the stock market. The interest is to predict market fluctuations and make profits from them; investors' main interest is to buy and hold the right securities at the right price. When the market is undervalued, investors will make purchasing decisions rationally; when the market is overvalued, investors will sell stocks with prices exceeding their intrinsic value to make profits. "
In actual operations, investment and speculation are silently affecting everyone engaged in stock trading. Investment and speculation are two different beliefs, and your behavior is guided by these two beliefs. When you are guided by rational investment philosophy, you will not be dominated by speculative emotions. Only when you are facing market fluctuations can you act calmly and remain calm in the face of changes.
So, real investment is fundamentally about cultivating one's inner self and growing through continuous trials.
stocks have five characteristics:
① Non-repayment stocks are securities with no repayment period. After subscribing to the stock, they cannot ask for a withdrawal of the stock unless they are sold through the market.
② Participatory Shareholders have the right to attend the shareholders' meeting, elect the company's board of directors, and participate in major decisions of the company. The power they have is proportional to the share of the shares they hold.
③Reputable Shareholders can receive dividends or dividends from the company based on the shares they hold. The size of the dividends or dividends depends on the company's profit level and profit distribution policy.
④Liquidity Stocks are traded through trading platforms to realize circulation among different investors. The more shares outstanding, the greater the trading volume, the better the liquidity of the stock.
⑤Risk Stocks, like ordinary commodities, have their own market conditions and market prices. Stock prices are highly volatile due to various factors such as the company's operating conditions, supply and demand relationships, bank interest rates, and market sentiment.
Whether it is the bursting of the bubble or the crisis caused by fraud, it will lead to market sentiment reactions, resulting in stock price fluctuations. People are inevitably affected by this fluctuation. This impact will make you give up the investment system and eventually chase ups and sell downs under the guidance of unreasonable guidance, and become a speculator unconsciously.
A fact that Muzi has always repeatedly emphasized is: If you want to succeed in the capital market, the most important thing is the tempering of human nature. Although human nature is not the only factor in the success of investment, the weakness of human nature is indeed one of the most important reasons for investment failure. The fear and greed caused by market fluctuations can make you deviate from reason and ultimately fail in investment under the trend of herd effect .
When the economy is in a trough, we must firmly believe and have hope; when the economy is in full swing, we must remain rational and be respectful.
"The Smartest Things to Invest" - Ras Tweed
Value investment concept is to measure the stocks to be purchased using intrinsic value as the yardstick. If such a value concept is deeply rooted, you need to continue to learn and adjust your thinking model.
Corporate thinking is to regard stocks as part of the ownership of the company, pay attention to the business and sustainability of profits of the company, rather than being confused by the rise and fall of the stock price.
Reverse thinking requires you to base yourself on independent thinking and independent judgment, not blindly follow the crowd, and pay attention to those assets that have been discarded. When everyone rushes to buy assets, it often means a higher premium.
Value thinking is to estimate the intrinsic value of the assets you are purchasing, rather than staring at the market price of the assets. Many people buy stocks for cheap price, which invisibly falls into the trap of speculation.It is not about buying cheap ones, but about investing in stock prices below intrinsic value.
Risk thinking is actually considered from the perspective of probability. Only investments with high probability wins are good investments. If you want to make a profit in investment, you must first consider how to avoid losses.
From a psychological point of view, behavior is the projection of the brain acting in the real world by human cognition, thinking, psychology and risks. When your behavior runs under the framework of rational thinking that develops cognition, rather than under the intuition of instinctive cognition, it will help improve your investment win rate.
Speaking of this, some people will say, "Everyone understands the truth, but when the market continues to decline, you still cannot overcome your own fear." What Muzi wants to tell you is that overcoming the fear in investment is an important sign of an investor's maturity, and this ability requires continuous trials in practice.
So how should we try? You can focus on practicing from these three aspects:
① When fear appears, you need to change the way of thinking that you want to escape when the market declines. You should know that this is probably a once-in-a-lifetime opportunity. Especially when the market plummets and people are extremely afraid, it is often a great opportunity to enter.
② When facing fear, you must have the ability to analyze the causes of fear. Is it because the market is making a fuss or the bursting of the market bubble, and use fundamentals and data as support to overcome fear.
③After analyzing the real cause of fear, you must force yourself to make rational judgments. The market has been falling continuously, and the market valuation is very low. You can buy in batches to sow seeds for spring.
Experience in reality can help you improve your ability to resist fear. When you experience several major market fluctuations and taste the investment opportunities hidden in the crisis, you can face fear more at ease.
No matter when it reaches its peak, please remember: Your investment ability is the best way to control risks. volatility is the cost of investment. Although volatility management may reduce short-term returns, it will not affect long-term returns. The essence of risk is weak investment ability and inability to recognize one's own mistakes.
The law of wealth redistribution is always that wealth gradually flows from short-sighted people to those with vision; from restless people to quiet people; from those who take risks to safe and stable people.
Those who believe in it have the opportunity, those who are serious can change themselves, while those who persist can eventually change their destiny.
