Investment is really a "look at the mountain is the mountain, look at the water is the water;".Look at the mountains are not mountains, look at the water is not water;Look at the mountains are still mountains, and see the water is still water". For example, what do you look at when you look at the company over the years?Is it to look at a company's business model and corporate culture?Of course, these things are important, but I don't think that's the focus and the foothold;Is it through qualitative analysis to analyze a company's low-cost advantage, scale advantage, switching cost, network effect, economic goodwill, economic concession and other moat barriers, and through quantitative analysis of financial reports, can it be confirmed?These things are important, but I don't think it's the focus and the foothold;Is it through long-term observation to see if the management is virtuous and friendly to our minority shareholders?These things are important, but I don't think it's the focus and the foothold;
So, as an external investor of an enterprise, we analyze the focus and foothold of a company
The answer is mainly to see whether its products and services can be long-term, firmly encroach on the minds of consumers (target customers), if investment requires more common sense, I think this point is, just because we are in the analysis and research of enterprises, sometimes the "road" goes too far, but it is easy to forget this common sense!
Moutai has always been given the status of national liquor in the minds of the Chinese people, is it because it only has red genes?I think it is related to this factor, but this is by no means the fundamental factor for Moutai to become the national liquor, its fundamental factor lies in its unparalleled quality, and it is precisely because of this unparalleled quality that it has become a good wine in the minds of drinkers and people who understand wine, and then add some other factors to become the national liquor in people's minds.
People who are familiar with the history of Moutai's development know that Moutai's brewing process is in the fifties of the last century, Moutai's first meritorious figure **Xing dedicated the brewing process inherited by his family for six generations. Since Moutai has always implemented the system of "master and apprentice to help and lead", Li Xingfa, the apprentice of ** Xing (who is also a meritorious figure in the history of Moutai's development), passed on the traditional craftsmanship he mastered to his apprentice Ji Keliang. The biggest difference between Ji Keliang and his master and his master's master is that he has a university education, that is, the "cultural person" of Moutai's people's heart, of course, he also lived up to expectations, and finally realized the leap from a craftsman to a master, and constantly organized and theorized the traditional brewing process of Moutai, so that the quality of Moutai can be "solidified" and can be expanded and reproduced, so that we have Moutai in our minds today.
For example, when the young Ji Kelian graduated from university and was assigned to the Moutai factory, after learning that the ancestral craftsmanship of Moutai was very different from the knowledge in his books, he exclaimed to his lover, "We have no say in ten years"!It is precisely because Mr. Ji Keliang has known humility and reverence since he was young, so that he has also become a "god-like" figure in the minds of Moutai people. It can be imagined that if Moutai does not have the quality factor in the minds of drinkers and people who understand wine, even if it has red genes, will it still become the national liquor in the minds of the Chinese people?I think the answer must be no. Similarly, if it does not have this quality factor, its so-called collection attributes, financial attributes, non-replicable attributes, etc., will no longer exist
Just as great writers and artists spend their lives pursuing the creation of classic works, the excellence or greatness of a company must also come from the fact that it creates good products and services in the eyes of consumers (target customers). Isn't it?Apple is great because it creates Apple products that change the way people live;The reason why Tencent has today's network effect (customer switching cost) is because Xiaolong Zhang's team has developed "WeChat", a product and service that almost everyone can't live without. This truth should be said to be very simple, so this provides us with a "focus" for researching and investing in a company, that is, we must first ask before investing in a company: does it provide good products and services to our consumers (target customers)?If so, then we can drill down and analyze qualitatively and quantitatively its business model, its corporate culture, the quality of its management, and what exactly it has in its moat, how much free cash flow it will generate in the future, and so on. When the research of these things is "complete" (including the study of industry data, competitors and other materials), its "foothold" is still to implement whether the products and services it provides can be long-term and firmly occupy the minds of consumers (target customers), if the answer is still yes, then congratulations, you have probably found your favorite long-term bid. I think this is the closed loop, or the right path, for us investors to study a company, and nothing else, such as using their dazzling financial skills and various valuation data models from the beginning. According to my observation, the so-called research of the latter is easy to see only the trees and not the forest, and it is easy to fall into various traps of investment.
In the early stage, I said that the ultimate test of investment is the investor's two abilities, that is, the right choice and the hold. It should be said that it is not easy to choose correctly, and it is even more difficult to hold, which may be the difficulty of investment. Regarding these two abilities, many friends commented that the key is to improve their awareness of the enterprise, which is true. Yes, the improvement of these two capabilities, the core, the key, the key point, is to improve their own investment in the above cognition of the company (whether to occupy the minds of consumers for a long time and firmly), because this cognition is in place, the so-called "hold" is no longer a problem, especially in the market storm, this kind of cognition, but also easy to help us block out all kinds of noise and toxic remarks in the market.
For example, in the face of Moutai's stock price recently, some remarks about Moutai have suddenly emerged in the market, such as young people drinking less and less liquor, Moutai is not only because of the word "Moutai", how many years ago the "boss" of liquor or Wuliangye Yunyun, for this kind of remarks, I always laugh and say nothing, because they are not Moutai's target customers, at least he is not a person who understands wine.
Similarly, in the face of the stock price of Gree Electric Appliances in recent years, there are always some remarks of Hegli Electric Appliances in the market from time to time, and even the spearhead and focus are on Dong Zong. What's even more ridiculous is that some people say that I don't like Gree's Dong Zong, but I still buy Gree when I buy air conditioners. Haha, I also laughed at these remarks, because I think the fans of Gree Electric Appliances, when they are ** Gree products, the vast majority of them must go to its products, and they will not consider whether the chairman is surnamed Dong or Li. For example, when I was recently decorating my "investment studio", I specially designated three air conditioners to buy Gree, otherwise, when I read and Xi in my studio, and when I looked up and saw other brands of air conditioners, as a shareholder, I would definitely be in good spirits (now my daughter's account holds Gree Electric)!
For the same reason, when Dong'e Ejiao "fell" in 2019, not only did I not give up, but I continued to accumulate its shares in recent years, why did I not give up?It is very important to know that the quality of Dong'e Ejiao's products is the purest, and its health care effect has also been tested by thousands of years of history. With this point, I don't believe that the spring breeze can't be returned!Of course, judging from the financial report of the first three quarters of this year, it has come out of a temporary predicament, and its stock price seems to have a bit of a "sunny day" flavor in the weak market!
Yes, why can a company endure, or become excellent and great?Without it, it is because its products and services can firmly encroach on the minds of consumers (target customers) for a long time, no matter what kind of liquor you deal in, or what high-tech products you research and create, without exception. Here, note my modifiers, i.e., "long-term" and "firmly" (with these two points, this is probably what Buffett calls consumption exclusivity). I think as long as a company can do this, it will definitely maintain its long-term vigorous vitality. Why?Because those who win the hearts of the people win the world, and those who win the hearts of consumers (target customers) win the world, this is an unbreakable truth, and I think this is also the specific application of the people's historical concept in business. If there is a "golden key" for us to research and invest in companies, I think this is the case. We have seized this "golden key", and we have also grasped the "bull's nose" of holding and observing this enterprise for a long time.