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From GDP, CPI, interest rates to presidential election, from technology, labor, raw materials to industrial policies, the financial market seems to be filled with endless variables, each of which is enough to cause earth-shaking changes in the market. Are there any rules to follow for successful investment in
? Which one should you pay attention to for seemingly endless variables? Investment masters class, an investment training institution, recently compiled the stock investment experience of 18 legendary investors. They have different legendary experiences, outstanding war stories, and their own specialties. However, they seem to have a common sense in how to successfully invest in stocks - Less is more, grasp the key!
"A key rule of investment is that you may not know everything at all times, but you must understand what is really important." - Dan Loeb (Head of the top hedge fund Third Point, worth nearly $20 billion)
"If you are an investment analyst or investment manager, you will be able to succeed or excel. Most importantly, in the largest number of companies, the results are usually determined by three or four factors, because they are enough to affect 80% of the results, and most entrepreneurs are also focused on polishing these three or four factors. They understand these factors and focus on these factors. If the factors you are concerned about and the factors your company managers are concerned about, you will not be able to understand the company, and there will be problems." - Mohnish Pabrai ( Buffett disciple, hedge fund manager, compound return of up to 29% from 1999 to 2007)
(Dan Loeb)
"I fundamentally believe that having the ability to extract two to three topics from an investment and hit the key points is definitely an 'art'." - Seth Klarman (value investment giant, founder of Baupost Group, a top hedge fund in history, can be ranked in the top five)
"In terms of my personal experience (whether it has been seen as an investor in recent years or as an expert in the early years), it is really important not to have more than 3 or 4 variables (focused on). Because the rest are noise." - Marty Whitman (Value investment giant, often compared with Buffett)
(Seth Klarman)
"Many people spend an hour with the CEO and ask about many industry terms. However, unless you know everything, these terms should be the ones you most care about. Most of the time, there are always two or three things that are really important, and it is reasonable to devote your research to these areas." - Daniel Krueger (famous hedge fund manager)
"Our failure once again highlights the importance of a principle, that is, don't make things too complicated and try to simplify things. This principle is widely used in our investment and business operations. If a decision has only one variable and this variable has a 90% chance of success, then it is obvious that you will have a 90% chance of winning, but if you have to overcome ten variables to achieve your goal, the final chance of success will be only 35%. In this cooperation case for zinc metal recycling (a major investment project of Buffett's Sino-US Energy Company at the end of the last century), we have overcome almost all the problems, but an unsolvable problem is enough to make us unable to finish it. For example, using the rhetoric of contradictions, you should seek a chain with only one link."— Warren Buffett (How to introduce, people better than the other seventeen?)
(Warren Buffett)
"In my early years, I spent too much time on the details, and I had to know everything about a company and its industry. But since then, I began to understand that it doesn't matter if you know less, as long as you can find one or three factors that drive the company. We think precision can hardly bring anything, so we are more willing to create conditions for a range of potential results. We would rather be directed than precise mistakes.”—— Steven Romick (famous hedge fund manager, the fifth best American investment manager in the first decade of this century)
“To make a lot of money in investment, you don’t need to find some answers for every possible investment you may consider. But it is necessary that among the few investments that really put into practice, you need to find the right answer for most of them. ”—Phil Fisher (a classic investment master, Buffett absorbed the essence of him and Graham )
"For a company, you just need to figure out a few things, it is enough to make it a successful investment. In our opinion, if you can figure out 85% of the things by answering a few big questions, you don’t have to waste time on the remaining 15% because its marginal utility is no longer worth it. "——Steve Morrow (Research Director of Arga Investment Management, formerly a fund manager at Vanguard)
(Larry Robbins)
"It's normal to drown in details or be obsessed with complex sides. But for me, the most important thing is to figure out the four or five characteristics that really matter to this company. In my opinion, my job is mainly to ask the right questions and then focus on analyzing the answers for decision-making. ”——James Montier (famous fund manager and author of the must-read financial book " behavioral investment manual ")
"We gradually discovered that those truly great investments ultimately only have one or two driving forces, but they are enough to tell an unexpected story. ”—Ed Bosek (famous hedge fund manager)
”One of the difficulties of being a good fundamental investor is that you always want to start with mastering all the information, but then you want to combine them into several important factors. It is not easy to avoid shortsightedness, and you need to make sure you are always thinking about the latest information and reacting accordingly, rather than chasing your own tail. So you'd better focus on what really matters. "—Larry Robbins (founder of well-known hedge fund Glenview Capital Management, worth $2.3 billion)
"I don't think it's necessary to know all the details, but you need to know three, four or five factors that will affect the company. ”—Charles De Vaulx (famous hedge fund manager)
“Our method emphasizes the importance of subtraction as a kind of wisdom. We strive to ignore irrelevant details and the often deafening noises. We hope to find the "elements" of each company, for example, how can Mastercard achieve an after-tax profit margin of nearly 40%? Why are the Reels brothers (referring to Steven Rales and Mitchell Rales, leveraged acquisition tycoons, and have successively created two listed companies, Danaher and Colfax, through acquisitions and mergers. The former has a market value of more than US$50 billion) so good at acquiring and improving operations? How did Markel (financial company, mainly engaged in insurance underwriting) achieve a 15% compounded book value per share growth over the past two decades, although interest rates are falling over the same period and competition for insurance underwriting is also fierce? ”—Chris Cerrone (Partner, Akre Capital Management)
“If there is any problem, it is that there is too much information available today. Compared to distinguishing information that is not related to basic facts from (too much information) and judging what these facts actually mean, how to discover information is no longer a problem today. What is needed more than ever is reasonable judgment. ”——Bernard Baruch (Wall Street "genius" and speculative tycoon)
(Bernard Baruch)
" (We need to put important data on a piece of paper,) What we need to do is qualitative things, that is, judge the industry, which has a lot to do with determining the company's three, four or five main characteristics. Here I want to give Buffett an example. In the early 1970s, Wall Street believed that the rapid growth period of the newspaper industry had passed and was not worth investing. Buffett analyzed that the biggest feature of this industry is its monopoly nature.”—Jean Marie-Eveillard (First Eagle Global Fund Manager, managed $50 billion in assets, with an average return of 15.8% from 1979 to 2004, Morningstar Lifetime Achievement Award in 2003)
"If I can get the truth, I will think of three questions to ask before meeting with the company's management. I see many analysts taking five pages of questions, but doing so is not very helpful. You need to find the key questions that drive this investment and then ask the CEO. ”—Glenn Greenberg (founder of Chieftain Capital, now head of Brave Worrior Capital)
"Investors must remember that your investment results are not rated like the Olympic diving competition, and the difficulty does not matter. The rewards you get from investing in a simple and easy-to-understand and sustainable competitive company are comparable to those of you who have worked hard to analyze a company with constant variables and complexity. ”—Warren Buffett
” My analysis focuses on finding out factors that are strongly related to stock price movements, rather than focusing on all fundamental factors. Honestly, even today, many analysts still don't understand what exactly is driving the rise and fall of a stock. ”——Stanley Druckenmiller (Top Hedge Fund Manager, 24-year average annual return rate exceeds 30%, was once Soros' deputy)
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Chart Research Graphics will be prosecuted, data sources: Wande, Bloomberg.
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