In fact, as a finance major, I often shout high-profile investment and don't be a speculator. However, how many people can really invest, and how many people know what real investment is. Unfortunately, I am one of them; But fortunately, I can finish reading this book and understand it.
In the preface, Zhang Lei mentioned the core of the book: there is only one criterion for real investment, that is, whether it is creating real value and whether this value is conducive to the overall prosperity of society. We should distinguish the relationship between value and profit. Creating value is not the same as creating profit. Perhaps a company with a strong sense of social responsibility, through innovation, developed the latest COVID-19 vaccine suitable for China people and gave it to the staff who are fighting the epidemic for free. Such enterprises have created great value through innovation, but their profits will not be reflected in the upcoming quarterly or annual reports, and even losses will occur. However, gaining word-of-mouth and public confidence is a powerful driving force for the future development of enterprises. Can such enterprises only be judged by financial reports? Obviously, no!
Why is it difficult for individual investors to invest now, or why is it called "speculation" of stocks? It's the price, not the future of a company. Individual investors who can't make money are always obsessed with location, timing and mood, and their funds are rarely based on full and objective analysis. This kind of money is called "quick money", the game of asymmetric information, the speculative pursuit and the right rent-seeking, and it has a very high short-term yield. This is a strategy, but it is by no means the best policy. With the advance of the market, the yield of this quick money will gradually be swallowed up and then become a loss.
Gao Ling in Zhang Lei has always adhered to a belief that a business opportunity should not look at its past income and profits, nor can it simply look at its income and profits today and tomorrow. Although these direct figures are important, they do not represent the whole story. What really needs attention is what problems it solves, whether it improves efficiency and creates value for society and consumers. As long as it is an enterprise that creates value for society crazily, its income and profit will be realized sooner or later, and society will eventually give it a long-term return.
After obtaining the financing of 20 million yuan from Yale University, Gao Xian's first investment was a heavy position in Tencent. They saw the essence of Tencent: social interaction may be hierarchical, but social tools don't. Believe you, I didn't think of this when I used QQ in front of the screen. However, he thought of this; Gao Ling thought of it. Instant information transmission between people will greatly promote the future social efficiency. The future and time have proved that their beliefs are correct and can be adhered to.
As an individual investor, should you buy a security and wait for the opportunity to sell it, or become a shareholder of this enterprise and its fate? Many people will resolutely choose the latter, but now when the Shanghai Composite Index stands at 3600 points, they are ecstatic and become the latter.
Many people, including me, want to know how Zhang Lei and his Gao Ling do value analysis.
The first point is the core content. It lies in the industry, in the company and in management.
Industry: business model-the essence of business, the logic of making money; Competition mode-oligopoly, monopoly competition ... growth space-long sunset, sunrise industry ...
Company: business model, operation model, process mechanism, management radius, scale effect, core competitiveness.
Management: whether the founder has a pattern, how to implement it, and entrepreneurship.
A deeper and broader level: the birth, change and disappearance of industry development, company evolution, management potential, business (business model) and the driving factors behind it, and understand the cause and effect of each historical period.
The benefits are not groundless, but based on real ultra-long-term research and analysis.
Take chestnuts as an example: the three tracks with the most potential for social investment: medicine, technology and consumption.
First of all, grasp the essence (underlying logic): retail is service, content is commodity, what you see is what you get.
First of all, consumption can be simply understood as retail.
The symbol of the first great development was the birth of chain stores. The birth of chain stores should be based on an ecosystem, and the premise of this greatly developed ecosystem is the emergence of railways. Railways have created new efficiency for modern logistics and facilitated the flow of people. This makes the demand for highly standardized chain stores strong.
19 19- 1926 "new retail" appeared in the United States. There are even unmanned convenience stores. Without good goods, the chain store itself is untenable. Leading by Procter & Gamble and Unilever, well-known consumer goods companies began to appear. After the second industrial revolution produced televisions and airplanes, communication further expanded. With the development of the times and the progress of the industry, supermarket retail enterprises such as Wal-Mart have gradually become the mainstream of the retail industry. ...
Railways standardize logistics and production, chain stores standardize purchase and service experience, consumer goods companies standardize commodities, televisions and airplanes standardize cognition, forming a complete retail ecosystem, and constantly innovating on the basis of the original system and model with industrial innovation.
2 1 century, e-commerce appeared before our eyes. The core of the retail industry is to connect goods and consumers. Compared with the traditional retail industry, e-commerce reduces or even replaces the importance of offline channels and leads the trend with an efficient logistics system. The difference between JD.COM and Amazon is that JD.COM has integrated its own logistics system and formed a full supply chain system, which is the core competitiveness of JD.COM.
Look at technology again.
1.0 The essence of the innovation era is the innovation of business model, which is to "connect" by using Internet technology. For example, from search engines, social tools, e-commerce, online car sharing, group buying ... to the era of innovation 2.0 lies in integration. This kind of integration is no longer a simple copy and superposition, but applies innovation to the whole industrial chain to achieve long-term value creation and common development. This is the process from C2C to IFC.
Cao, the king of glass, said: "It must be the manufacturing industry that changes the world." Only by combining science and technology with manufacturing can the industrial chain be reborn and continuously create new values.
Therefore, Gao Xian invested in Gree Electric, Fuyao Glass, Blue Moon, king of the children and Bull Group. Realize the digitalization of industrial chain.
Finally, see medicine.
In the industrial map of China, the medical industry will definitely occupy a very important position. The industry itself has strong consumption attributes and scientific and technological attributes; High barriers to entry, strong growth and profitability, strong anti-cyclicality, and extremely deep moat.
However, the medical industry in China has a reputation of 30 years. The R&D cycle of 10 year and the investment of 10 billion are less than one tenth of the success rate of R&D. In the past few decades, low-level and highly repetitive generic drugs have dominated the mainstream, and there are few innovative drugs in China. Generic drugs are sales-driven industries, not innovation-driven industries; The core lies in medical representatives, not R&D personnel.
Since 20 14, Gao Xian has invested extensively in supporting innovative enterprises in many small fields in the field of big medical care: Wuxi PharmaTech (small molecule drug R&D service enterprise), Gloria (new drug R&D and integrated production service provider), Aier Ophthalmology (the largest ophthalmology chain medical structure), Cotton Core Reproduction (assisted reproductive integrated service provider), Mindray Medical and Shanghai Minimally Invasive (medical device platform).
Second, how to understand the value of time. The most expensive thing in investment is not money, but time.
Time is the value of creating compound interest, and compound interest is the best gift for this investment. What can deepen the moat over time is "assets", otherwise it is "expenses". When you are making an investment, think ahead. You are confident to take the exam for five years. How many times? If not, please reconsider the necessity of investment.
Third, there is only one moat in the world.
Zhang Lei said: Subsidies or monopolies cannot produce great enterprises, but only in competition can they produce great enterprises. There is only one moat in the world, that is, entrepreneurs constantly innovate and create long-term value crazily. If you can't create long-term value efficiently for a long time, this moat is actually very fragile.
The sustainable growth of enterprises is self-revolution and internal creation. Just like bamboo, forget the successful past and keep growing new "bamboo joints". Although Amazon has a money-making model almost like a "printing machine", they have already set foot in other fields, such as cloud computing and smart devices, without boundaries; Similarly, apple is the same; Now it's Space Exploration Technology, ByteDance and other companies.
Putting values before profit and firmly believing that values are the real core of an enterprise, then profit is only the natural result of doing the right thing. This is the entrepreneurial spirit of non-games. The more you do this, the more you can concentrate on long-term value creation. When a company only has profits in its eyes and still has bonus hunter, withdraw its capital quickly! In the near future, profits will be swallowed up by the market, leaving you only a piece of green.
Don't fall into misunderstanding. Good-looking data on the book is a good company, and the value is not absolutely low P/E ratio. There are more internal factors that cannot be quantified, which are often the key to determining the success or failure of investment.
Claude Bernard famously said that what constitutes the biggest obstacle to our study is the known, not the unknown.
If you are looking for a stock with a low valuation and you are lucky enough to find it, it is more important to understand why this stock is undervalued. Value investment is not only an investment strategy, but also a kind of values, and it is a certain factor to find sustainable value creation in many uncertainties.
Value investment lies not in right or wrong, but in choice.
If you are lucky enough to have a sincere entrepreneurial heart, then your thinking will change from the bottom.
Zhang Lei pointed out from the capitalist's point of view that the biggest risk of entrepreneurial activity itself is to remain unchanged and dare not take risks. If entrepreneurs don't take risks, investors take the biggest risks.
Entrepreneurship is not about the wind direction, but about logic. Many business opportunities come from the collapse and compression of the value chain. Such as Ctrip and E Long. Popular business models often have cruel competition and high elimination rate.
An entrepreneur is often the first employee of a company, and his attitude and spirit are very important. Organizational and management innovation is the core driving force for enterprises to break through the tight encirclement of competition, keep free thinking and truly understand and practice value management. The business model always focuses on creating value, constantly breaking the routine and establishing new carriers. Because only what customers need is valuable. This demand is dynamic. If a product is not repurchased and the service is not well received, what is the social value? Without social value, where can there be commercial value?
Besides, an empathetic entrepreneur can't be missed, and an empathetic entrepreneur is worth following. So there is a saying that there is no business that must be done, but there are friends who must help. The greatest happiness of work is to do interesting things with reliable people and treat colleagues as your business partners. And let your company aim at achieving great success, rather than getting material wealth rewards.
Investors can't be a showman, a mentor, or superior under any circumstances. Sometimes, after suffering, we can understand the difficulties of others.
Looking back at the whole book, you can easily see his ideals. The fundamental purpose of establishing Gaoyao Capital is not to make money. Maybe he also wanted to make a profit, and the words in the book did not reflect his real thoughts. But I believe that an investor without professional ethics can't write inspiring words.
This book not only tells me how to understand value investment, but also teaches me to abandon some hostility and impetuousness. China advocated the craftsman spirit, not to do great things well, but to do small things well, believing that "the ego has power". I understand that there is a kind of value: personal value, social value and commercial value. There is no difference between personal value and social value, both of which are before commercial value. As Zhang Lei said, profit is only the natural result after you do the right thing. There is an unspeakable truth in the market: people who only have money in their eyes often can't make money.
This is only from the perspective of investors to see the industrial development of China. Zhang Lei pointed out that we are not only investors, but also entrepreneurs. But in essence, they did not personally experience the development of manufacturing enterprises in China, but looked at it from the perspective of a bystander. Although they have empathy, it is difficult for them to really feel the same.
Zhang Lei is really a great investor.
But if you can calm down and listen to the speeches and interviews of entrepreneurs like Cao, Ren and Dong Mingzhu, you won't hide your national pride and can't bear to stop clapping your hands. They are like swift horses, and good investors are like Bole, which drives the rapid economic development of China. When the market is full of bad money driving out good money, false financial reports, power monopoly and inferior products, we can't help but say thank you for their existence.