The bull market overestimates the selling, and may earn less in the short term, but it avoids the risk of long-term big losses. Bear market underestimates buying, which may be locked in in the short term, but will make big profits in the long term] Buffett has said many times that investment is actually very simple: "Investment is actually very simple-buy a good stock, don't throw it out easily, you just have to wait for the stock price to rise! Don't panic too much when the market falls. When the stock market rises too greedily, it has already achieved quite high returns. " "Investing in stocks is very simple. What you need to do is to buy the stock of a large enterprise at a price lower than its intrinsic value, and at the same time, make sure that this enterprise has the most honest and capable management. Then, you can hold these stocks forever. " I have studied Buffett for fourteen years, talked about 10 issue of Learn Buffett on CCTV, wrote eight books about Buffett, and delivered many speeches to spread Buffett all over the country. But I found that although Buffett's investment performance is extremely successful, his investment strategy is easy to understand, easy to learn and easy to do. Only a few people really learn from Buffett and become Buffett. To tell the truth, I have studied Buffett for so many years, but I can't do it in many aspects, just like a priest who reads and tells the Bible every day: I can't do one tenth of what God says! Just like a Confucian scholar who reads and talks about sage books every day, he sighs: I did one tenth of what sage said. Why can't we do it when we know it? It's as if we are determined to lose weight and never eat meat again, but our hands have put chopsticks in our mouths. This question has been bothering me for a long time. Only after reading some books on psychology recently did I realize a little: it turns out that what we do is not the driving force, not the rationality, but the sensibility. Emotional power is the key to profound change. Only when you really accept it emotionally can you slowly change and get used to it. First, the human brain is divided into perceptual and rational systems, just like elephants and people riding elephants. In the past few decades, psychologists have found that our brain is not a completely unified system, but divided into two independent systems: one is what we call the emotional surface, which is a part of human instinct and can perceive pain and stress; The other is the rational side, also known as the reflection system or consciousness system, which is used to consider, analyze and look forward to the future components. Psychologist jonathan heit's metaphor in the Happiness Hypothesis is the most vivid: the emotional system is like an elephant, and the rational system is the rider of the elephant. The man riding an elephant sits on the back of the elephant, enjoys sovereignty and looks like the owner of the elephant. But in fact, the control of this elephant rider is not stable at all. The heaviest animal on land, the elephant, weighs 6000 kilograms, which is equivalent to 75 people riding elephants weighing 80 kilograms. Whenever the 6-ton elephant is unwilling to follow the direction he pointed out, the elephant rider will completely lose control and be completely defeated by the elephant. For most of us, it has long been a habit for elephants to beat the people who ride elephants in life. We know the exam is coming, but we still watch TV, surf the Internet and play games. We know we need to lose weight, but we still eat and drink. Not much, you know. Second, short-term speculation conforms to the human nature of seeking quick gratification, and elephants have the final say. Maybe you haven't seriously thought about it, and neither do we invest. The bull market is crazy and the valuation is seriously overvalued, but we still rush in-it's not too late to make a quick profit and run again. The bear market crash is seriously underestimated, and there are bargains everywhere, but we are still reluctant to buy it-what if it falls again? This reflects our perceptual and instinctive side, that is, the weakness of elephants: laziness and instability, and often only see the immediate gains and losses (the possibility of short-term rise or fall is high), while ignoring the long-term interests (overestimating long-term risks or underestimating long-term interests). It is usually the elephant's responsibility to change his failure from short-term investment to long-term investment, because what we want to change is often to sacrifice short-term stock price fluctuation in order to obtain long-term value growth. The bull market overestimates the selling, and may earn less in the short term, but it avoids the risk of long-term big losses. Bear market underestimates buying, which may get stuck in the short term, but it will make a lot of money in the long term. Although the elephant rider saw the benefits of long-term investment, he didn't really persuade the elephant to give up short-term gains and losses. He was really willing to pursue long-term returns and stick to the road of investment for long enough to reach his destination. The power of elephants is to seek immediate satisfaction, as Buffett said: "People would rather get a lottery ticket that may win the grand prize next week than seize a good opportunity to get rich slowly." Graham, the father of Buffett's mentor securities analysis, bluntly said that investment psychology is the most important: "We will pay great attention to the psychological level of investors. In fact, the main problem of investors-or their biggest enemy-is probably themselves (dear investors, the problem is not our fate-nor our stock-but ourselves). " Buffett also told us that IQ is not important when investing, but EQ is more important: "If your IQ exceeds 125, then the success of your investment has little to do with your IQ level. If your IQ is average, then you need to have considerable self-control over your desires, and a strong desire to invest may make you lose your blood. " Third, we should accept long-term investment both rationally and emotionally-with love, we can stick to our habits for a long time and become natural. On the contrary, the power of elephant riders can transcend the immediate ups and downs, think about long-term interests and plan long-term returns. However, people who ride elephants have a fatal weakness. He will only talk but not do it. He can watch for a long time, but he can't walk a step. Elephants have strong mobility. In any case, elephants are the power to make things finally come true. Moving towards a goal, whether short-term speculation or long-term investment, requires the action of this elephant. And this is also the biggest shortcoming of the elephant rider: he can only stand still. Elephant riders tend to over-analyze, think too much and do nothing. Some people think about a girl for several years, but dare not say a word; Some people went shopping or searched online for hours, but they didn't order anything. And elephants are not always "bad boys". The strength of an elephant is that some emotions and instincts are extremely important. For example, we are full of love, pity, sympathy and loyalty to our relatives and children. We can always transcend short-term gains and losses and make short-term sacrifices for the long-term interests of our families. If we don't regard stocks as lottery tickets, nor are they just trading vouchers, but are willing to be long-term partners of an excellent company and pursue the maximization of long-term returns, then we will invest in value like Buffett, and bravely buy against the trend and hold it for a long time when the bear market or the company encounters temporary setbacks and is too underestimated-this is entirely the power of that elephant. Long-term investment does not need to be a superman, a cold-blooded animal without feelings. On the contrary, you need to be a mortal with feelings. You love your wife and children so much that you won't break up because of a temporary contradiction. You love your house too much to sell it because of the temporary price rise and fall. Buffett's big purchase is based on his love for the company's products. We should completely change from short-term speculation to long-term value investment. We should not only emphasize the thinking of rational investment, but also strive to cultivate ourselves to accept long-term investment and value investment emotionally. Rational investment knowledge can be learned quickly, and perceptual investment habits can only be cultivated slowly. As Buffett said, "A successful investment career doesn't require a genius's IQ, unusual economic vision or inside information. What is needed is a correct thinking frame when making investment decisions, and the determination to avoid losing control of emotions and keep rational thinking. Graham clearly tells us the correct thinking framework of investment decision-making in the book Smart Investor, but another element of investment success-emotional determination needs to be cultivated by yourself. " We should not only know, but also do, and do for a long time. Value investors who really practice Buffett are just like those who insist on a reasonable diet and moderate exercise for a long time. What is difficult is not how to learn, but how to get used to it. (The writer is the chief investment planner of Huitianfu Fund Company. I'm just a personal opinion, not any investment advice.