The content shared and sorted out today is of great value and deserves to be read over and over again by everyone who regards value investment as a lifelong career. If you have missed the past, are you willing to grasp the future from now on?

1

The two ends of the investment are analysis and trading, while the two ends are connected by waiting. The core of investment analysis is business understanding and probability thinking, the core of investment transaction is odds and reverse thinking, and the core of waiting is to keep the circle of ability and respect common sense. In the long run, good trading cannot save bad analysis, but good analysis can be ruined by bad trading. By contrast, the hardest thing is to learn to wait, whether it's holding shares or holding money.

2

Investment performance is a posteriori, but the medium-and long-term probability and odds of each investment can be determined in advance. Excellent performance is only the result, and the reason leading to this result is the essence. Hard work, talent and luck may be the three most important reasons: working in the right direction will give you a lower limit of success, talent determines the efficiency and time cost of growth, and luck will always surprise those who stick to the right.

3

Successful investors are not so much good at calculation and choice as they are better at giving up and persistence; it is not so much that they are able to listen to all kinds of eyes and eyes, but rather to stay focused all the time; it is not so much that they have extraordinary talents and insights. It is better to have a deeper understanding of their own limitations and a clear understanding of what can be done and what cannot be done in the market. it is better to say that they are more aware of their own limitations and know clearly what can be done and what cannot be done in the market. The so-called investment gods are not that they have obtained the mysterious apocalypse, but that they are loyal to compound interest and practice it forever.

4

Anyone who understands compound interest understands that the sustainability of compound interest is contradictory to profitability (similar to ROE), high compound interest and long-term can not be both, of which Buffett's 50 years of nearly 25% as the current human limit (those who only look at high compound interest without looking at time to beat Buffett, have not yet touched the gross of investment). It is inevitable to return to the mean value after high compound interest, in which there are both objective and subjective factors. The best scenario in an investment career is high compound interest at the beginning, followed by robust but highly persistent.

5

Investment is particularly easy to indulge in "building a perfect system" at some stage, but this is not much different from a lifelong commitment to building a perpetual motion machine. The more complicated the system is and the more you indulge in details, the farther away you are from the nature of investment. The longer the investment is done, the more you can realize that the most important thing to rely on is a simple but essential methodology, and the most important thing is the overall pattern and strategic success.

6

One of the more dangerous situations for an investor is to have an early sense of "truth in hand". If you are more boring or competitive at the same time, and criticize those who are slightly different, it basically means that there is no room for progress. Of course, there is an unshakable basic principle of investment, but there is no "sacred model" in the weight of different elements of investment. Of course, this does not mean to change your mind, but to keep your mind open, which is actually a kind of ability.

7

Is it better to concentrate or disperse? If you think about it from a specific stage point of view, it depends on which is more important to you, the fish (elasticity) or the bear's paw (safety). In terms of long-term normality, concentration seems to represent a high degree of confidence in the company's mining and analysis. But on second thought, if you are so confident, you should be able to find more excellent targets and be moderately dispersed. Of course, this is essentially a degree problem, and the final emphasis is on the matching of research depth and position benefits, and the moderation of investment flexibility and risk diversification.

8

There are many elements involved in investment decision-making, but if you refine and summarize, there may be three key points:

1) overall vision: it means to know where you are in the whole market cycle, whether you should be scared, greedy or numb.

2) value judgment: the bet should be aimed at the object of the future advantage category and be friends with time.

3) expectation difference: clarify the assumptions of value judgment and the expectations contained in the valuation, and maintain sensitivity when there is a high expectation difference.

9

The investment myth is full of winning stories, but the reality is so bony that even Buffett admits to making mistakes all the time. However, why do some people kill when they make mistakes, and why do they not cause serious losses when they make mistakes?

The difference is:

1) do you subjectively admit that you are mortal who can make mistakes?

2) objectively, are you good at protecting yourself with the margin of safety?

3) do you spread the risk and make up for it with good odds? So the loss depends on the wrong preprocessing.

10

According to the formula of PB=PE*ROE, when ROE=8%, even though PE is 35 times, PB is only 2.8 times. If the company can continue to grow, the ROE will increase to 25%, then when the PE is 25, the PB will increase to 6.25 times. Thus, PE reflects the expected premium, while PB reflects the asset premium. Usually the expected response is much earlier than the actual changes in ROE, while PB is relatively synchronized or lagging behind the changes in ROE.

11

It can also be understood that the changing trend of ROE itself is the core element of valuation, and the biggest mystery of valuation is not the simple addition, subtraction, multiplication and division of indicators, but the forward-looking judgment of the future profitability of the enterprise and the quasi-certainty of the operating stage of the company. The so-called fuzzy correctness, in fact, is that the specific PE and PB can be relatively vague (or can be targeted analysis), but the trend judgment of ROE must be correct.

12

High ROE is the embodiment of the company's profitability, and high and sustainable ROE is the embodiment of the company's strong competitive advantage. Then for such a good corporate market, in most cases, there is bound to be a capital premium, that is, a higher PB. If a high ROE company has a very low PB, you have to think about why? Maybe: 1, the market is stupid; 2, the nature of the company is strong cycle and is currently at the inflection point of the profit peak. This contradiction occurs occasionally, but in frequent scenarios, high ROE and low PB are inherently contradictory.

13

In the field of investment, "dancing in chains" may not be a restriction but a protective mechanism. The most typical, such as Lao Ba said, "only 20 holes in a lifetime", such as the most common fixed investment index fund. It seems that these behaviors are highly restricted, but after a long time, it is often found that the "shackles" have turned into gold bracelets. In fact, this is also the reason why most people's "free action" can not outrun their own virtual disk.

14

Companies that can constantly bring new expectations are often favored by the market. But there are two situations here: one is that the new expectations are all around the enhancement of the main industry or the upgrading of the industrial chain, and the main expectations continue to be confirmed, which is a good sign of excellent or even great companies; the other kind of new expectations have a large span and like to follow the wind, and always cover up the unfulfilled old expectations with new expectations, which is the seed of unreliable or even cheating companies.

15

In terms of the relative relationship between the company and the price, buying the company with a static high price is not the best policy, but it is not the most frightening. In particular, if the company continues to become cheaper in the future, it can turn into a good investment. The biggest fear is that it is cheap to buy, but it is getting more and more expensive, which shows that the logic of buying is wrong from the root. In this case, the most important thing is the ability to correct mistakes quickly, otherwise the time cost of waiting for mistakes is so high that people want to cry.

16

At first glance, it is difficult for companies with efficient operations to have obvious barriers, but such efficient operations may change quantitatively to qualitative changes, resulting in real high barriers based on scale or technology and customer stickiness. But by the time all this is confirmed, it is often close to maturity. For this kind of company, the most important thing in the early and middle stage should be to grasp three points: 1, long-term demand expansion; 2, focused and strong industrial ambition team; 3, continuous "do what you say" execution.

17

The deterioration of the balance sheet is not a good thing qualitatively, but the cause of its deterioration needs to be divided into two. One is accompanied by a significant decline in income growth, as well as abnormal accounts receivable and inventory in the same period; the other is rapid income growth, but the need for upfront capital or lack of economies of scale leads to a substantial increase in debt ratio and the deterioration of cash flow. The former often indicates that the relaxation of credit to the income end will face worse results, while the latter is due to the fact that demand breaks out too quickly to digest current capital.

18

Today I saw a sentence: "what is limitation?" The limitation is that the firewood choppers think that emperors carry gold poles. "it's really in place!

19

Master Fan has a famous saying: how much slander you can stand, how much praise you can stand. In the stock market, this can be changed to: as much suffering as you can endure, you can enjoy as much success. People who suffer in the face of the K-line every day are typical people who have the heart to earn money for selling flour; if they can increase their endurance to suffering, of course they will gain more, but in fact they will be equally painful; and the people who really understand it is that they can no longer feel the suffering even if they are indifferent to this inevitable process.

20

If you want to learn the value of successful investment, do not recite Buffett's formula every day; if you want to start a business, do not look at all kinds of success every day, what you need most is how everyone fails! It is impossible for a person who has not studied all kinds of failure cases to succeed. Those who just tell you every day, "so-and-so is good, if you do so-and-so, you will be a new and successful person." they are either nerds or liars.

21

Everyone in the bull market is talking about high elasticity, and after several rounds of stock market crashes, they began to pay attention to "how to avoid net worth fluctuations". In fact, the retracement of net worth itself is an accessory to market fluctuations, and the complete refusal to withdraw is tantamount to being an enemy of investment. But the same volatility means very different things in different contexts: the tendency to reject volatility in a bubble environment, to embrace volatility in an undervalued environment, and to tolerate volatility calmly in most unknowable environments.

22

A book wrote: "mediocre generals, in the face of complex circumstances, will give themselves a list of problems and question marks, so worried that they can not find the north." Real generals, then quickly cut the mess, from the seemingly ordinary state of affairs at a glance to see through the essence and key points, and bold action. In fact, this is similar to investment decision-making. excellent investors are good at grasping the main contradiction both to the market and to the company, and can see the whole from the details and finally form the "logical fulcrum" of decision-making.

23

The same company has different weights under different odds. At very low prices, the key point is to understand what the main concerns of the market are and what will happen in the worst case, and the core is whether the odds are in place; when the prices are reasonable, the short-and medium-term information is already highly effective, and the focus is on who can see farther. The core is the continuity of growth; when prices are extremely high, any small probability events can not be ignored. In other words, the extreme state is compared to the angle, and the normal state depends on the thickness.

24

From the perspective of valuation, my first fear is not expensive, but the value is difficult to measure. The core that is difficult to measure is either too many variables or too far away from the boundary of capacity; the second fear is not expensive, but the trap of cheapness. It looks cheap and easy to get hit, but once it turns out to be a trap, it's a big loss. If other elements are more certain, then "expensive" is actually a very simple problem, at least easy to measure. But it is fatal that the important assumptions of valuation are unclear or overturned.

25

There are two ways to lose money: 1, you really lost money; 2, although your income has increased, the average growth rate of social wealth is much higher than your income growth rate.

There are also two ways to make money: 1, you really made money; 2, although your income has not increased, the main assets of most people have depreciated significantly. In the past, the promotion of the wealth class mainly depended on the latter's 1 and to avoid the former's 2, but there will always be a moment in the future when the latter's 2 will be unforgettable.

26

Many things as long as you work hard to pay, there is no hard work, diligence will have a basic income guarantee. But the cruelty and simplicity of investing is that you never ask how much you give, but whether you are right or not. In this type of work, hard work comes second, and the first is the correct values and methodology. Otherwise, the direction is wrong, the more diligent, the more bumpy, the more obsessed, the crazier.

27

As the saying goes, men are afraid of entering the wrong industry, so what is a good industry? In fact, there is a most intuitive observation point, if you can see a lot of middle-aged and elderly people in this industry, and these old guys happen to be at the peak of their career, generally speaking, it is an industry that can be entrusted for life. On the contrary, despite the lively and bright industry, but basically all young rice, more than 35 is either rare or retreated to the edge of the position, then change careers as soon as possible.

28

Non-investment is a risk that becomes more and more harmful over time, major permanent loss of capital is the most terrible risk, and volatility is the most common and necessary risk. The first kind of risk comes from lack of consciousness, the second kind of risk comes from recklessness and arrogance, and the third kind of risk comes from objective law. For professional investors, the first and second types of risks need to be completely avoided. The third type of risk must be accepted calmly, but it needs to be compensated with sufficient odds and anti-fragile system.

29

The learning progress of investment is actually very difficult, from seeing to understanding, from understanding to understanding, from understanding to hesitation, from hesitation to comprehension, every node problems will get you stuck halfway. In 11 years, I realized that the essence of investment is the three elements of "object, timing and strength". However, it took me another 3-4 years to reach a certain state of reasonable trade-off and balance of internal contradictions and conflicts among these three elements. Over time, you will understand that this business is really a career of talent, hard work and occasional luck.

30

On the way to the advancement of investment, it is better to reason than to learn a lesson, it is better to think hard, and a good master must cooperate with a good character. In fact, a good character also needs a little good luck. So where do you think you're stuck? Most people think that they have not met a good master, and few people feel that their character needs to be improved. This in itself has revealed the answer to the question.

31

In the world of investment, the results of one big opportunity far outweigh thousands of small twists and turns. In the same era, everyone actually faces the same opportunities, the only difference lies in the degree of control. If you seize a really big opportunity, once is enough to change the situation; two will start a new life; three times the whole family will be different. From the historical law of a-share, in fact, every 3-5 years will encounter a good opportunity, but most people have long been abandoned in a variety of small twists and turns.

However, the ability to seize big opportunities requires a sufficient amount of advance. To put it bluntly, if you don't study today, you won't have a big chance in 2 years' time. If he hasn't made progress for 5 years, he can only watch the winners rise several steps in their lives and sigh in 10 years. It seems that life is very long, but the golden period of real learning and feedback to the results of investment is actually more than ten years. It's too late to miss the golden window of wealth.