In the process of stock market investment, it is a common phenomenon that most retail investors pay attention to too many investment targets, and it is also one of the reasons why their investment returns are very poor. Why? I don’t need to explain this principle, but investors should think clearly. This is the fact that most retail investors have not thought about some of the most basic investment issues clearly.
An important investment idea I learned from Warren. Buffett and Charlie Munger is that smart investors only focus on a few stocks that they can understand (the circle of competence). Investors should not be a market analyst (mainly referring to paying attention to stock prices and their fluctuations), but should learn to become a corporate value analyst.
In fact, as an ordinary investor (retail investor), there must be very few good companies that you can truly understand in depth. Therefore, a smart retail investor should devote his main energy to these aspects within his ability. The problem is that there are very few retail investors who truly realize this, and there are even fewer retail investors who can consciously practice it.
In recent years, I have begun to consciously use the investment methods advocated by Buffett and Munger . My investment return rate has increased a lot compared to the past, and it has also saved my own time and energy, and has given me a deeper understanding of some good companies that I can understand.
