Hong Kong stock Tencent plummeted 4.75%, and its stock price hit a new low in five years. Can buy the bottom ?
text/Jinlicheng
(Note: This article is about 1,800 words, it takes about 3 minutes to read. This is the 471st original article of "Licheng Talk about Investment")
Last night, the US stock performed sluggishly, and most of the Chinese stocks listed in ended with a plunge. After the Hong Kong stock opened today, Tencent's stock price plummeted rapidly, closing down as high as 4.75%, trading volume reached 11.559 billion, closing at 232.4 Hong Kong dollars, and the stock price hit a new low in five years. It is not bad! If calculated based on the highest stock price recorded by Tencent in February 2021 at HK$775.5, the share price of has fallen by more than 70% as of today.
If an investor starts to buy at the bottom of Tencent at a price of around HK$387.75 (halved price, 50%), he has lost more than 40% so far without increasing his position. The cold floating loss figures show that even if you buy at a low price, you cannot change the fate of huge losses. This is a tragic fact that most investors who like to buy at the bottom have to accept. Buying at the bottom is a professional technical job. If you are not good at skill, it is easy to copy on the hillside.
There is an investment proverb that goes well: an experienced player dies at the bottom of the game, while a newbies dies at the pursuit of highs. It can be seen that whether investors try to buy at the bottom or chase highs, they are not easy to succeed in the investment field. This is because "bottom" and "high" have always been relative concepts. The "bottom" and "high" in investors' minds are often inconsistent with the objective trend of the market.
Many ordinary investors buy Tencent at the bottom, mainly because some investment big Vs and financial big Vs are optimistic about Tencent. These big Vs are basically all "value investors". They advocate buying excellent companies and are willing to take the initiative to buy condoms, with the purpose of realizing a beautiful investment wish: "win on your own"!
is brainwashed because of "letting on the win" that many investors are very obsessed with "value investment". Unfortunately, they often ignore a very cruel fact: can help investors achieve "letting on the win" investment targets, which often have extremely strong scarcity and can travel through time, space and cycles. They are survivor deviations from , which is not a common phenomenon.
It is true that judging from the investment history of the past 10 years, buying Tencent’s stocks has indeed helped many investors achieve “winning in vain”, and the cases of investing in Tencent becoming rich are often exaggerated by the media. Will a stock that can make investors "win" through history definitely make investors realize their wish again in the future? Obviously, this answer is no, because history cannot represent the future.
Generally speaking, companies that were "three good students" in the past are still "high-quality students" in the future are relatively high, but this probability is not 100%. After all, shopping malls are like battlefields, fierce competition and unpredictable market environment. Judging from 10 years as a cycle, many former kings have become passing clouds.
Therefore, the companies that can truly enable investors to "win" must be those with extremely strong monopoly, and this monopoly cannot be easily subverted, and can travel through time, space and cycles . In the eyes of value investment master Buffett , they are "consumption monopoly" companies, not Internet high-tech companies that are easily subverted.
If an investment cannot have the high certainty to help investors achieve "winning in a lie", the more they fall, the more they buy, and want to get a return on investment by continuously buying at the bottom, this is a very risky approach. This is because buying at the bottom is a speculative act. Investors always wishfully think that the current stock price is the bottom, and it is normal to be slapped in the face by reality.
What does this mean when a company's stock price falls far exceeds investors' expectations, or when an investor's investment experiences huge book losses? This shows that the "safety margin" is not kept enough and sufficient, and the valuation logic is likely to be wrong. At this time, investors should stop and reflect, instead of continuing to increase their positions and buy without thinking, and always stubbornly believe that the market must be wrong and they will never be wrong. If invests on the basis of no "safety margin", is it still a value investment?
Let’s look back at Tencent. Will Tencent be the current one “return of the king”? Almost no one can give a definite answer to this question. Tencent is facing many problems: , such as the problem of traffic peaking, major shareholders' share reduction, policy anti-monopoly, strong competitors' moats , etc.
However, according to the author's point of view, we have a more pessimistic attitude. When things are strong, they are old. This is a natural law and investors must accept it! Here, we can dare to predict that time has changed, and it is difficult for Tencent to return to its peak moments in the past, and its most glorious days have become history. Of course, this does not mean that investors who invest in Tencent will definitely face investment failure.
From a macro perspective, there are three main reasons for the current continuous plunge in Hong Kong stocks: (1) The liquidity of Hong Kong stocks is already relatively poor, and liquidity will be further deteriorated within the interest rate hike cycle ; (2) The Federal Reserve continues to hike rate hike rate hike , causing international capital to return to the US mainland, which has a blood draw effect on global capital and cannot be reversed in the short term; (3) When the market enters a plunge mode, it is easy to fall into a vicious cycle and finally fall into a tragic situation of "more kills more", until the new cycle begins to arrive.
At the end, regarding the bottom-buying issue, what I want to say is:
(1) If you are a "real" value investor, you must be able to judge whether Tencent can make you "win in lieu" and whether there is extremely high certainty. If these answers are no, the current bottom-buying must be wrong. The more you fall, the more you buy, it is undoubtedly a self-digging grave.
(2) If you are a smart speculator who is good at hunting human nature, you should know that under a crazy decline and when various technical indicators are completely deteriorating, you cannot hope that something like a short-term rebound will appear. If there is an unexpected floating loss on the books of the speculative position , you should decisively stop loss of , rather than treating speculation as a "investment" that covers the ears.
