This week I finished reading several books written by Mr. Cao Renchao, the Hong Kong stock god, in one go. The first three books are in a series, which mainly focus on grasping the current situation in investment and the application of investment strategies. And the regulation of mentality in investment are introduced. The last book, "You must be rich, you can't be rich" is some advice for young people. Some of the contents are mentioned before, but each has its own emphasis.
"On Trend" is the first book. It tells the story that investment must keep up with the general environment, including adjustments to some major national and international policies. Everything must decline when it is prosperous. Whether it is prosperous or not, investment only has the opportunity. Timing, there is no right or wrong. That is to say, don’t blindly follow the trend. For example, with regard to current housing prices, Mr. Cao mentioned that it usually takes 24-27 years for the real estate market in big cities to go from its lowest point to its highest point, and China's real estate boom has reached its later stages. Don’t do it if you are not familiar with the investment process. Don’t invest if you are not familiar with some fields. Moreover, when investing, 30 cash and 70 investment are used to stop losses in a bull market. In a bear market, 70 cash and 30 stocks are used. When the loss reaches 15 Sell ??in time to stop loss. The stock market also has cycles. Don’t stick to the theory of long-term investment in value investing and go with the trend.
The method mentioned by Mr. Cao in "The Debate" is called bull's-eye stock selection. Choose strong industries according to trends, choose strong stocks among them, sell bad ones according to the market, or buy other ones with potential. Buy and sell at the right time. In addition, use 5 to 10 funds to speculate in second-tier stocks, because the upside potential of large-cap stocks is limited. Investment should adopt three approaches: medium, long and short, and make profits by taking advantage of cycles and trends. When investing, it is generally enough to buy 3-6 stocks, and take the time to research them thoroughly. In addition, everyone should form an investment strategy that suits them. Strategies that work for others may not necessarily work for you. You should formulate an investment strategy based on the losses you can bear with your own funds. That is when to buy and when to sell.
"On Nature" is about debugging the psychology of investment. Don't let your mood fluctuate with the fluctuation of stock prices. When investing, stop losing more than making profits. Only set the loss limit, and you don't need to set the upper limit. , of course, if the bear market is coming based on the general trend analysis, we must leave the market as soon as possible. When investing, don't pursue overnight victory or defeat, but care about the overall situation, win a war not a battle. Profits from investment must be given back to society, and we must understand that our profits come from society, taken from the people and used by the people.
"You Must Be Rich" is mainly aimed at young people. You should invest as early as possible and use compound interest and time to accumulate your own wealth. You can still withstand failure when you are young and start over, so you can boldly try investing when you are young. Of course, don’t invest blindly in some high-risk, high-return investments. At the same time, young people are not encouraged to buy a house early and take on debt. They can first use these funds as principal to accumulate wealth.
After reading Mr. Cao’s work, I changed some of my previous investment strategies. At first, I just wanted to buy blue-chip stocks when the stock market was down, and wait for the chickens and dogs to rise to heaven and make profits when the market was bearish. Such a strategy actually had no value. It doesn’t even count as investment. I will research second-tier stocks later and try Mr. Cao’s investment strategy. There is no end to learning, keep learning and move forward.