A recent tragic story about investors brushed the screen. At the beginning of the year, 10 million yuan went in, and now there are only 3 million yuan left. Regardless of the authenticity of this post, the resonance of investors is that the fluctuation of the stock market is too fierce. How can we adhere to the belief of long-term investment.
looking back on the road of stock market investment since the year of the ox, the biggest problem that all investors must face is how to have confidence in long-term investment under severe fluctuations. Small fluctuations in the stock market are the norm in investment, and large fluctuations often occur once a few years. Investors often cannot avoid fluctuations in the stock market, but their attitude towards market fluctuations determines whether the investment road can go far.
This issue of China investment red book, a securities firm, shares the views of an investment boss who has “cut his back” four times in his 30-year investment career on fluctuations. He used his own experience of 30 years to say, “In my 30 year investment career of A-Shares and Hong Kong stocks, I have experienced 4 more than 50% retreats, namely the 1998 financial crisis, the 2001” 9 11 “terrorist attack, the 2003 SARS shock and the 2008 subprime mortgage crisis. But it is also worth the trouble even if we eat ten more times, because the long-term returns from investing in the stock market are too great, all the hardships are worth it.
Like Duan Yongping, the above investment leaders are also full warehouse doctrine. In the past 30 years, he has obtained rich returns through heavy positions China Merchants Bank Co.Ltd(600036) , Kweichow Moutai Co.Ltd(600519) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) and other companies; He believes in the compound interest of good companies and time. Even in the face of more than 50% fluctuations, good companies will eventually rise back. At that time, even the earth shaking fluctuations were only a small wave in the historical K-line chart.
Listed companies represent the best group in an economy, and the long-term probability of the stock market is spiraling. This is what Peter Lynch said: of the 40 stock market crashes in the past 70 years, even if I predicted 39 of them in advance and sold all the stocks before the crash, I will regret it in the end. Because even in the stock market crash with the largest decline, the stock price finally rose back and rose higher.
large fluctuations distinguish capable and incompetent investors
Despite the experience of “cutting half” four times, the above investment leaders have obtained tens of thousands of times of income in their investment career in the past 30 years. “All the hardships are worth it. I’m willing to suffer like this ten times.” He said with emotion that the long-term return of the stock market is too huge.
“the real value investment is to insist and endure at the critical moment.” He said, “When the investment strategy is not dominant for a short time, whether we can stick to it and endure it is the key to the success or failure of investment ability. The understanding of volatility is a key point to distinguish the investment ability of investors. Value investors recognize that volatility is a normal phenomenon of the stock market, so they will accept it calmly, and the so-called pullback control is a deviation from value investment Capital. ”
In his opinion, a real value investor should have borne a decline of more than 50% at least once. This is what Munger said. If you are not willing to bear more than 50% fluctuations, you should not enter the stock market. “Only through the test of the darkest hour can you understand whether your investment system is reliable, so you have theoretical confidence and road confidence. The attitude towards the fluctuation of the stock market can also test whether a person is a true believer in value investment.”
The boss believes that in his investment career of more than 30 years, the market in 2021 and 2018, which many investors can’t endure, are actually small waves. Investment can’t think of making money all the time. Even Buffett and Munger will not make money for four or five years, but Buffett and Munger finally won without hurry.
In his investment system, the fate of investors is determined by the fate of the company they choose, not “Mr. market”. Mr. market will be restless in the short term, but the final stock price will reflect the value of listed companies. Truly mature investors will have a correct attitude in the face of market fluctuations. They will never abandon their chips because of the tragic market trend. Holding on to high-quality companies is the key to getting rich slowly.
believes that the key to investment is to find good stocks and insist on full coffers, even if the crest of the market bubble does not evade. “The rule of adequate investment is to enjoy the long-term rise of stocks. If the stock has risen 12 times, even if the bubble has been cut off, the investment income will still be 6 times, and it is also very impressive. In other words, the early stage is to get enough large profits to prepare for a substantial withdrawal.”
real value investors have dark moments
Just like the aforementioned investment leaders, real investors have the experience of carrying the market to the dark moment and are ready for a possible decline of more than 40% in the market at any time.
In the past ten years, Duan Yongping has earned about ten times the income from holding apple, and has also experienced four sharp declines in the past ten years: after buying Apple in 2011, there was a 55% decline from 2012 to 2013; There was a 36% decline from 2015 to 2016; There was a 40% decline in 2018; There will be a 36% decline in 2020.
Duan Yongping holds almost one stock in U.S. stocks – Apple, but he thinks no one is happier than him to see Apple’s share price fall. “Investors can only imagine the company as an unlisted company without the change of stock price. However, most people can’t do this. Objectively speaking, if there is no way to regard a company as an unlisted company, most investors will lose money in the end.” Duan Yongping once said so.
in the 12 years when Wang Fuji held Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , he also experienced two retreats close to cutting his back, but this did not prevent him from earning 60 times the income on Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) individual stock. From June 2013 to July 2014, Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) withdrawal range was 46%; From June 2015 to February 2016, Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) retreated 55% again. The two large withdrawals of Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) did not change Wang Fuji’s confidence in holding shares.
Between 1973 and 1974, Buffett also suffered a net worth cut. But Buffett did not have any depression and uneasiness. Instead, he said happily, “I think I’m like a very lecherous young man. It’s time to invest in my daughter’s country.” Buffett also said that the reason why some people can become successful investors is because they firmly grasp the successful enterprises. Sooner or later, the market will reflect the value of enterprises.
The core asset stocks in A-Shares have been a bull market in the past six years, Kweichow Moutai Co.Ltd(600519) has increased by more than ten times, but it also requires extreme patience and firm determination to harvest these ten times. In the past six years, Kweichow Moutai Co.Ltd(600519) has experienced two sharp declines, the largest 37% in 2018 and the largest 42% this year.
There is no stock market that only rises but not falls. Almost all big bull stocks have experienced a halving. For good companies, even the deepest decline will eventually rise back. For example, Fuyao Glass Industry Group Co.Ltd(600660) has increased by nearly 30 times since it was listed in 1993, but it fell by nearly 80% in 2008; Wanhua Chemical Group Co.Ltd(600309) has increased 80 times since its listing in 2001, and also experienced a decline of more than 70% in 2008.
the long-term average yield of the stock market is not inferior to that of the housing market
the fluctuation of the stock market can not be avoided. If you avoid the risk, you must avoid the income at the same time. As the best group in an economy, listed companies are destined to become the best carrier of wealth.
Although the Shanghai index is jokingly called “forever young”, it has hovered around 3500 points in the past 15 years. However, investors who do not know much about investment can still catch the train of China’s economic rise through diversified and low-cost ways. Statistics show that the income of Huaxia market selected hybrid a since its establishment in August 2004 is 40 times, and the annualized income is 23.92%; The cumulative income of several funds established in early 2000 also exceeded 20 times.
Over the past 20 years, the yield of the stock market has not lost that of the housing market. Although A-Shares have experienced the impact of the subprime mortgage crisis in 2008, the huge earthquake in the second half of 2015, the sharp decline caused by the Sino US trade friction in 2018 and the decline of conglomerates in 2021, investors who have long held the funds issued in early 2000 are still profitable. Houses in Shenzhen have increased 20 times in the past 20 years, with an annualized income of 16.5%, and it is difficult for house prices to increase in the previous 20 years.
How to deal with big fluctuations is an important factor in the division of wealth. Due to the active trading in the stock market, the transaction can be made at a click. Investors in the stock market often can not stand the test of large fluctuations. They lose their chips and the opportunity of substantial growth of wealth under panic. The house transaction is slow and the transfer procedures are complex. It is often easier for real estate investors to hold the house, thus enjoying the long-term rise of house prices.
outstanding investors can get long-term returns far beyond the index by embracing great companies.
Professor Jeremy J. Siegel’s statistics show that Buffett started his investment partnership in 1957, and the S & P 500 index was founded in the same year. The investment input of US $1000 is assumed to be a cost-free S & P 500 index fund, which will accumulate more than US $130700 by the end of 2003, with an annual yield of 11.18%; If $1000 is invested with Warren Buffett, it will exceed $51356000 by the end of 2003, with an annual yield of 26.95%.
Professor Jeremy J. Siegel’s statistics also show that in the two centuries from 1801 to 2001, the long-term average yield of stocks excluding inflation was 6.5% ~ 7%, which means that, if measured by purchasing power, the wealth of investors in the stock market doubled every 10 years in the past two centuries, far outperforming bonds The purchasing power of gold and cash.
in the history of a shares, due to the scarcity of listing resources and high valuation, the Shanghai Stock Index digests the valuation in the form of long-term non rise, and the stagnancy of the market masks the long-term profitability of a shares. In fact, the Shenwan blue chip stock index has increased by 11.2 times since January 4, 2000, and the compound annualized rate of return is 11.5%. After deducting the inflation rate of 2% ~ 3%, the annualized actual rate of return of Shenwan blue chip stock index is about more than 8%.
(brokerage China)
