Warren Buffett has always advocated value investing, and he once said that "I am greedy when others are afraid", which means that when there is a panic in the market, Buffett will use the opportunity to buy low and layout. However, over the past three years, many have chased higher value core stocks, and as a result, most have suffered significant declines. This actually reflects the problem that there are two prerequisites for value investing: margin of safety and certainty. At the beginning of 2021, when most people chased high, they were not in a state of fear, but in a state of greed, which cannot be called true value investing. Therefore, to be a successful investor, you need to shift from passive to active left-hand investing, choosing to buy low in the market bottom area rather than chasing high when the market is excited.
The core idea of value investing is to look for undervalued ** and hold it for a long time for capital gains. The margin of safety refers to the difference between the value of the property and its intrinsic value, and a larger margin of safety means a greater benefit to the investor. Certainty means the stability and availability of the company's performance. Investing on the basis of these two prerequisites can help investors reduce risk and achieve better returns.
Unlike chasing higher, the bottom area offers more investment opportunities. In the bottom zone, many ** valuations have returned to the bottom, but the market is gradually becoming less optimistic about them. In fact, most of those investors who chase the price limit are just to make short-term profits, and do not intend to hold these for a long time, but in the end, they are fixed. In contrast, those investors who can hold it stably for three years or even longer will not be able to survive when the ** falls to the lowest point, which is the cyclical nature of the market. Theme stocks may only need to stay up for three months to cut the flesh and get out, while for value stocks, it may take up to three years to cut the meat. However, the valuation of these ** has fallen to the bottom area, which is also ready for the arrival of the next ** cycle. After a sharp decline, it will take a while to sort out its chips, and it is expected to usher in a major upward wave by 2025.
The bottom area refers to the stage where *** begins to show signs after a long period of **. In the bottom zone, valuations are relatively low and market sentiment is generally subdued, which presents a good opportunity for investors. At this time, holders, after a long wait and believing that the value of the company will not last, will gradually start to ** and open positions.
Whether it's chasing at the bottom, halfway up the mountain**, or buying low at the bottom, the end result is to leave the market before the main upswing. History tends to repeat itself, so expect a round of *** in the first quarter but continue to adjust thereafter. This means that the market has bottomed out, the space has become smaller, and the next will be a wide range, allowing investors to chase the rise and fall. However, the time to really launch is still early, and it's just the beginning. For those who like it, they should stay away from all the high-performing white horse stocks, as these don't need hype, they need to be held. Speculation should be involved in the capital, themes, hot spots and concepts, etc., according to different trading strategies to choose different **. Many people say they like to keep innovating, trial and error and looking for different investment opportunities, but this often leads to losses and puts the blame on others, the market, and the rules.
History tends to repeat itself in cycles, and it's no exception. There will be cyclical ups and downs in the market, and investors can grasp the trend of the market through the study and observation of history. In the short term, the market may appear, but in the long term, the real launch will have to wait. Therefore, you should be patient in your investment, do not blindly chase the rise and fall, but make reasonable operations according to the market trend and your own investment strategy.
Although there are certain rules in the market, there is no guarantee that all times will be successful. In the investment process, investors need to make informed investment decisions after in-depth research and analysis, combined with their own investment experience and risk tolerance. At the same time, it is necessary to adhere to the concept of long-term investment and not be swayed by short-term fluctuations. Investing is a long-term discipline that requires continuous learning and practice in order to achieve good returns. Finally, there are risks in the investment market, which should be treated with caution and avoid blindly following the trend and speculative behavior to avoid excessive losses.