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Last week, A-shares were another week of acceleration. With the ** of the index, many ** straight down. "I don't dare to look at my account these days, I really don't know when it's going to be a head. This year's one-month losses have exceeded the losses of last year's whole of life, and this market is truly heartbreaking......Mr. Wang, a shareholder, was worried. On Friday, the Shanghai Composite Index fell nearly 4% in the afternoon, falling below 2,700 points and falling to 2,666After 33 points, it stopped falling and rebounded; The Shenzhen Component Index and the ChiNext Index fell nearly 5%, and then bottomed out and narrowed. High-dividend heavyweights began to rally in the afternoon, and the three major indices all showed a V-shaped trend. **Showing a general downward trend, there were nearly 5,000 stocks in Shanghai, Shenzhen and Beijing, with a turnover of 805.7 billion yuan on the same day, and a net foreign capital of 23600 million yuan.
Data shows that since the beginning of the year, the average share price of A-shares has fallen by nearly 26%. The A** market often falls out of risk at the end of the **, which is due to the fact that some panic orders are killed, which leads to the acceleration of the market downward, triggering the passive liquidation of snowballs and financing orders. On February 2, Yang Delong, chief economist of Qianhai Open Source, said that at this time, relevant departments must take decisive measures to reverse the downward trend of the market, boost market confidence, and resolve systemic risks. According to the experience of overseas mature markets, the establishment of large-scale leveling in the market downturn can not only play a role in resolving financial risks, but also obtain certain benefits in the later market. According to the current trading scale of the A-share market, there is a capital volume of about 2 trillion yuan, which should be able to successfully achieve the bottom and completely reverse the decline of the market, which is undoubtedly an important measure to promote the strength of the capital market and build a financial power. He believes that at present, many high-quality companies have been wrongly killed, and there is only two or three folds of the high point, and the market has been significantly mispriced, at this time, investors can obtain a sufficient margin of safety by being far below the intrinsic value.
The margin of safety is an important risk management strategy in investment, which was proposed by Warren Buffett's teacher Graham. The core idea of this concept is to reduce the potential risk of loss and improve the return on investment by estimating a company's intrinsic value conservatively and buying when it is lower than this estimate. From the perspective of risk buffering, the margin of safety provides a means of risk control. The margin of safety is the core of the value investment strategy, and value investors are looking for investment opportunities with low valuation and high growth, and the market ** is **below the intrinsic value**, that is, there is a margin of safety. The concept of margin of safety argues that market volatility is the norm and that investors can use the irrationality of the market to buy quality, and encourages investors to take a long-term perspective and focus on the company's fundamentals and long-term value, rather than short-term market volatility. It also helps investors maintain a sense of psychological safety, avoid panic selling, and make investment decisions calmly and rationally in the face of market volatility and uncertainty, both to protect capital and seek reasonable returns.
Although the margin of safety is a financial investment concept, the rationale behind it is prudence, prevention, and risk management, which is universally applicable in our daily lives. For example, in personal financial management, maintaining a certain amount of savings and emergency funds is a margin of safety, which can help deal with unexpected events such as job loss, illness, or other unforeseen expenses. Constantly learning new skills, broadening your professional field or building a wide network of contacts are all ways to create a margin of safety in your career planning, which allows for more options and opportunities in the event of a change in industry or a challenging career path. In terms of health, taking measures such as eating a healthy diet, exercising, and having regular check-ups to prevent diseases is also a way to create a margin of safety. When it comes to time management, scheduling your schedule to allow extra time can help you cope with unforeseen delays or issues, reduce stress and relieve anxiety. Mental preparation and flexibility are also a margin of safety when faced with major decisions or life changes, which means being prepared for a variety of different outcomes and being able to be more prepared for challenges.
The market has been in a row for three consecutive years, and the trend of the market is already a process of bottoming downward, so it is inevitable that there will be repeated ** at the bottom and the divergence between long and short will increase. Finding the bottom of the market is a process of repeated beatings, and investors should have enough confidence and patience. One of the principles of Warren Buffett's investment is the margin of safety, that is, the company he buys is much lower than the intrinsic value of the company, which is the key to his success. Only by having a deep understanding of a company's fundamentals and industry outlook can we accurately assess its intrinsic value and when it is below intrinsic value. Many people always regard ** as a string of ** or changing numbers from time to time, so it is difficult to hold on to them when ** is in a downturn. In fact, most listed companies do not have reflexivity, the stock price does not affect the operation of the enterprise, once the economic cycle is up, the performance of these good companies will improve, and the stock price may also hit a new high. Through long-term investment and value investment, we can truly obtain good returns by sharing the growth of enterprises with sustainable competitive advantages and good management.
Shanxi Economic Reporter Zhang Rong