Investment Can Not Based on Feeling! Investment Without Research is Like “Playing Cards But Not Playing Cards”
If in 2014, we have $ 100,000 and invested in shares of the bank type. If you purchase Standard Chartered Bank (2888.hk), you now have an insufficient market value of 50,000 yuan. However, if you make a purchase of Hang Seng Bank (11.hk), then your stock market value is about 130,000 yuan.
Both are familiar banks in Hong Kong and their market value may change more than once in less than three years. This shows that in the investment world, small decisions have significantly affected your performance. In fact, by 2014, we need to watch Standard Chartered Bank’s annual report and Hang Seng Bank to review it. Maybe we can see the instructions.
Standard Chartered Bank’s 2013 annual report indicates that business growth has been stagnant, earnings and profits have fallen for the first time in more than a decade, bad debts have soared, and international bank investment has failed. This is a difficult problem. On the other hand, Hang Seng, the Czech Republic favorable increased, and shareholder returns remained high. In almost all aspects, it was much better than Standard Chartered. I believe that around people want to analyze, we can get a better option.
Investment can not be felt
Peter. The Forest District writes that “If you work on investing without doing research, you’re playing poker and we’re not watching cards.” I think everyone in the game is just aspiring that they will not be watching an opponent, not themselves. Therefore, working on a good analysis will definitely improve the performance of investors. But the question has arisen, how can we be considered a good analytical activity?
In the stock market, there are so many investors who use the opposite method of choosing a stock. Some people listen to technical analysis, ie, trade through historical price movements. Some people choose stocks according to effective market hypotheses, that is, stock prices fully reflect the value, and this paper will concentrate on discussing the method of choosing shares called “value investments”. The
In value investing, the majority of the time focuses on fundamental analysis (analyzing firm value from the financial and operational aspects), and the difference between value and price. It’s like a private sale and purchase company, each buyer will struggle as best as possible to know everything about the company. For example, if you were to buy a restaurant, you would certainly see nearby restaurants, closest restaurant likenesses, how long the rent, rent, the need to re-decorate, and the staff and the process. How is that, and how much revenue and its cost before? The
In fact, the fundamental analysis of the stock may be almost the same as the one above, and it’s all about knowing the company. Of course, because of scale or industry, listed companies are sometimes more complicated, but the purpose is the same.
Fundamental analysis of a company is an important step in value investing, the main benefit is to assess the value of the company and assure its quality. When there is a rough estimate of the value of a business, the value of the investor can be compared to the market price, which is very different from the private market. The listed companies have market prices, but like Charlie. Mengge said:
“Only half the price of a company is fact, but the other half is the person’s point of view.”
So perhaps you will pursue that there is a big gap between the price that is delivered by the market relative to the value of the company. And when you pursue this gap, you can not buy it immediately. After all, you should know that there are certain propositions for the market to give up this price, it may have a large number of convertible bonds, perhaps the industrial market is dim, perhaps the market is in a panic. No matter what the reason is, everyone needs to know the reason for the disaster and avoid losing money because they do not understand it. It’s like Buffett:
“In the game, if you still do not know who dish in half an hour, then you are a dish.”
If we understand the proposition behind the shame and still believe in the value of the company, you can buy it. But after you buy it, you must know that value will change, so remember that if something creates a change of value, you should evaluate home and make decisions when needed. The value-investing process is probably the same thing.