Essence Edition Are you suitable for buying stocks?

Chapter 4 Are you suitable for buying stocks? (4)
"Why do you say that! If you don't give me a convincing explanation, I will smash your brand!"

"In that case, why don't you sit down, have a cup of tea, and let me explain the mystery slowly. It is said that Guo Jing, the most admired hero in the world, has seven teachers with outstanding martial arts. He is known as Jiangnan Seven monsters, at the age when Guo Daxia started to practice martial arts, you are still bullying the little girl next to you in kindergarten. These seven teachers all wanted to pass on their unique knowledge to Guo Jing, but they did something bad with good intentions."

"how do I say this?"

"These seven people are all very powerful in martial arts, and they all hope that Guo Jing can learn it quickly, but they neglect to lay the foundation for Guo Jing. Although Guo Jing is a very hard-working student, he gets up early and goes to bed late every day. After many years of learning, he has not made any progress. Until one day Guo Jing met a Taoist priest of the Quanzhen Sect. The Taoist priest did not teach Guo Jing any powerful moves, but only asked him to cultivate his inner strength and lay a solid foundation. As a result, something miraculous happened, and Guo Jing laid the foundation well. After that, if you learn the various moves of the seven teachers with the help of gods, you can progress by leaps and bounds."

"Is it really so amazing? But what does Guo Daxia's growth experience have to do with me?"

"Haven't you understood yet? It seems that you do have similarities with Guo Daxia."

"Is that so? Is it because I have the same potential as him to become a generation of heroes?"

What exactly are the so-called basic skills?
"No, I mean you are just as talented and dull as him! Now you are like Guo Daxia back then. No one taught you to lay a good foundation in the stock market. What's worse is that you have learned some moves before. , but without basic support, these moves of yours will not only fail to help you earn money, but will bring side effects. Although you have not learned any candlestick charts, waves, etc., and have not blindly listened to gossip in the rivers and lakes, but I ask You, although you know that value investing is to buy discounted stocks, but do you know when a company is discounting? Even if you know that the company is discounting, do you know how much it is discounting? Even if it is a discounted company, But do you know if it's a good company or a bad company that might be going bankrupt soon?"

"This... this... I don't know."

"Then let me ask you a few more questions. Although you said that you are familiar with the historical brands of many companies, do you know the real profitability of these companies? Do you know how much money Moutai makes in a year? This is not talk Moutai has a long history and a unique taste, as long as national leaders love to drink it. If these indicators are not quantitatively analyzed, how can we compare different companies? How do we know which one is more profitable, Wal-Mart or Carrefour? These are not so-called stories can be clearly distinguished.”

"It turns out that there is another mystery in this."

"More importantly, do you know how companies in different industries make money? Why are some Heifeng villages more profitable than others? Why are some Heifeng villages more profitable than others? The company's performance fluctuates as much as a pirate ship, and some companies' performance can continue to grow steadily for decades? Do you know why?"

"do not know."

The only way to help you get through the two veins of Ren and Du
"The so-called knowing what but not knowing why is just talking about you young man. Value investing has a long way to go. Although there are many heroes in front of us as guiding lights, the first thing we need to do is to lay a solid foundation. The elementary and advanced courses are just for everyone to put aside the moves they have learned before, concentrate on practicing internal skills, learn basic accounting knowledge, analyze a company in a quantitative way, and at the same time provide insights into the company's business logic. Analysis, so that after graduating from elementary and advanced courses, all college students can understand reports, analyze business logic, know how a company makes money, what is its ability to make money, and whether it has a competitive advantage compared with companies in the same industry , whether the assets are safe enough, whether the management is dedicated to serving the company, and finally judge whether the company is a good company, how much it is worth, and whether it is very cheap compared with the current market value.”

"It does sound like there's a lot to learn."

"After finishing the elementary and advanced courses, all the students will not be confused by the appearance of the rivers and lakes, but can see the essence of each company. If this is the case, you don't have to stare at the market every day to see the ups and downs. How about it? Do you understand this time?"

"Understood, since this is the case, then I will go to the elementary class and leave."

"Wait, boy, wait!"

"What's the matter, I said I understood."

"Registration for the elementary class is on the left, and the advanced class is on the right. Let's go to the elementary class first."

The third section of martial arts moves is indispensable for long-term advanced courses

Advanced courses with added power
Five months later, Changtou Academy.

"Young man, congratulations that you have stood out from the crowd of college students and completed the elementary and advanced courses. It seems that although you are dull in talent, you have good perseverance. It is really rare to persevere. Now you must be able to analyze a company clearly and logically." .”

"Yes, I got up early and went to bed late in the past few months, and I was calculating financial data even in my dreams. God paid off, I passed all the checkpoints, passed all the way, and finally graduated from the advanced class. Look, my name has been engraved It’s on the wall of honor. Now that any listed company is placed in front of me, I can systematically analyze it and evaluate its value. I’m ready to use what I’ve learned to show my talents in the arena.”

"If you want to show your talents in the arena, I am afraid that the young man is still a little too late. Although you have passed the elementary and advanced courses, the advanced courses are still waiting for you."

"Advanced class?"

"Yes, you still remember that I told you five months ago that value investing has a long way to go, and the most important thing is to develop a strong internal skill, so as to keep you on the right track. But if you want to get a higher return In order to benefit, you must also be familiar with the important martial arts moves, with the cooperation of these martial arts moves, you will be able to add wings to a tiger and achieve twice the result with half the effort."

"Is there such a good thing? Isn't the essence of value investing to find good companies that are undervalued? Now that I can do this, what else can the advanced course teach me?"

With a strong backing, advanced classes are just the icing on the cake

"The so-called learning is boundless, boy, what you have learned is just a drop in the ocean. Investment is a profound and profound knowledge. Taking stocks as an example, in addition to buying and selling company stocks, there are also stock-based financial derivative options. It not only The investment is small and the return is high.”

"In this case, why waste five months of my time and just teach me options?"

"Just wait for me to finish. This option refers to giving you the right to buy or sell a company's stock at a certain price after a certain period of time. Take Huayi Company, which is well-known in the world, as an example. Suppose now The stock price of Huayi is 10 yuan, and now there is such an option in front of you: one year later today, you can buy Huayi stock at a price of 15 yuan, so should you buy it or not?"

"This... I have to analyze Huayi first. If its stock price is overvalued, I will definitely not buy it. If its stock price is seriously undervalued, then maybe I will consider buying part of it."

"Well said, if we don't have the foundation laid before, when we face such an investment product, we can easily deviate from the old way of making judgments based on feeling. Only with the internal strength you have cultivated before can we Use tools like options for your own use to get higher returns."

"It makes sense."

Various martial arts moves for you to challenge

"The stock market lasts forever, and bears and bulls cycle forever. The stock market continues to cycle in a bear market and a bull market. Value investors seize the opportunity to buy cheap stocks during a bear market and sell them during a bull market. What happens after the sale? Is there any other investment method with higher returns besides depositing the vain money in the bank?"

"do not know."

"Of course, choosing cheap and good stocks is the ultimate goal of every value investor's life, but is there any other way to earn income?"

"do not know."

"The heroine Guo Furong has a saying: People are floating in the rivers and lakes, who can not be knifed. Everyone knows that the rivers and lakes are dangerous, and investing in this rivers and lakes is even more bloody. I have seen bloody BMWs turned into little donkeys. Gold and silver treasures have been turned into broken copper and iron, and mansions have been turned into thatched shacks. Is there any risk-free or low-risk way to make money?"

"do not know."

"Do you know that you said three times that you didn't know?"

"do not know."

"Enough! Don't you understand that if you have these martial arts moves, you can distinguish the timing, adopt different moves at different times, and control the risk while ensuring the profit. It's like you are facing an almighty Type opponents, then first of all you have to turn yourself into an all-around type in order to be able to see through every move. It is not enough to have deep internal strength. To use the most popular saying in the world, our investment must also be Multi-field development to truly maximize input and output.”

"Then will these martial arts moves be taught to us in advanced classes?"

"Of course, not only that, we also know that martial arts in the world have a long history, and there are constantly newer and better martial arts moves. With an inclusive mentality, we will continue to introduce more newer and better martial arts moves."

"Wouldn't it be that I have never been able to learn to come out of the mountain?"

"Oh, it's true to say that you are stupid. You just need to come back to study regularly. You are really dead wood. If you want to learn advanced courses, you can go to the end of this road, but don't go the wrong way again Already."

"Know it!"

(End of this chapter)