In the long run, the overall stock market tends to be positive. In the 20th century, the United States has experienced two world wars, costly military conflicts, the Great Depression, more than 10 economic recessions and financial tsunamis, oil crises, epidemics, and the resignation of a president due to scandals, but the Dow Jones Industrial Index has not It rose from 66 points to 11,497 points.
——Warren Buffett Buffett believes that when investing in stocks, try not to care about the current ups and downs, because in the long run, the stock market will always continue to develop upwards. As long as you can endure it and make long-term investments, You don’t have to worry too much about investment losses.
On October 17, 2008, Buffett published a signed article in the "New York Times" saying that in the 20th century, the United States experienced two world wars, costly military conflicts, the Great Depression, and more than 10 major economic crises. What will be the results of the sub-economic recession, financial tsunami, oil crisis, epidemic diseases, etc.? The Dow Jones Industrial Average still rose from 66 points to 11,497 points. This shows that the stock market is always upward in the long run, so there is no need to pay too much attention to the current rise and fall.
This idea of ????Buffett is very consistent with his long-term investment philosophy. He believes that only long-term investment can achieve marathon long-term returns, even judging from the 200-year development history of the U.S. stock market. And the more you conduct such research, the more you will be surprised to find: the long-term return rate of U.S. stock market investment is very stable, but the short-term rate of return is very unstable!
Facing the financial tsunami that broke out in 2008, Buffett frequently took stock market dips and prepared to make long-term investments after optimizing the investment structure. Historically, Buffett has achieved the desired results every time he adjusts his investment structure. When Buffett took over Berkshire in 1965, the company's annual sales were only US$100 million, but by 2006 they had grown to US$70 billion. At the same time, the company's assets also increased from US$100 million to US$211 billion at that time. At that time, the company's business was 100% textiles, but now the investment portfolio has changed a lot, of which 30% is insurance business, 10% is energy, and the other 60% is manufacturing, service industry and retail industry.
At the end of 2008, amid the panic caused by the financial tsunami, Buffett's biography "Snowball" was published. The title of the book comes from one of his famous sayings: "Life is like a snowball. The important thing is to find very wet snow and a long hillside."
It is not difficult to see that to "roll a snowball" in addition to finding "very wet snow" In addition to "snow" and "long hills", it also takes time. While these two conditions are met, the longer it takes to "roll" the snowball, the bigger the "snowball" will naturally roll. Under Buffett, Berkshire has thrived for 40 years and will continue to thrive.
The "very wet snow" here refers to Buffett's continuously rolling and growing funds from Berkshire; the "very long hillside" refers to the outstanding listed companies in which Buffett has invested. What's strange is that Buffett always seems to meet these two conditions. It turns out that Buffett is very good at seizing opportunities. During the 2008 financial tsunami, he took Goldman Sachs Group, General Electric Company, BYD Company, etc. as hunting targets and enriched them into his huge "snowball".
Although people have different opinions on Buffett’s bargain-hunting action in this financial tsunami, one thing is very instructive, that is, we must look for the long slope of the "snowball" at the low level. For example, when Buffett bought H shares of PetroChina at low prices in 2002 and 2003, the "snowball" (cost) at that time was US$100 million. After five years of "long slope", it had reached US$4 billion when it was all sold. The size of the "snowball" expanded eight times. This time, no one knows how far Buffett is going to provide Goldman Sachs, General Electric, and BYD, but one thing is clear, that is, he will always put value investing first. No matter how many years you keep it in your hands, as long as you grasp the rhythm of the market and find a long slope suitable for your "snowball" at a low level, investment profits can be guaranteed.
Although this time Buffett got stuck after buying the stocks mentioned above, which became a hot topic among many investors, Buffett didn't care. In addition to his long-term investment perspective, history shows that as time goes by, these are just episodes. For example, after Buffett invested in the Washington Post Company in 1973, the stock price fell by about 20% soon after; after Buffett invested in Salomon Brothers preferred shares in 1987, he almost lost everything within two years due to a corporate scandal; in 1988, Buffett bought After buying shares of Coca-Cola Company, the stock price quickly fell by 30% because it was also in the stage of stock market crash at the time. After Buffett bought H shares of PetroChina in 2002, he suffered book losses for as long as three years... So what? As we all know, each of the above stocks has brought Buffett a lot of returns, adding a lot of legend to Buffett's investment experience. Buffett's secret to bargain hunting in the stock market Buffett's investment experience proves that he has been trapped after buying stocks many times, but every time there was no danger. His secret is that in the long run, the stock market will always continue to develop. As long as you buy good stocks, you can rest assured.
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