It is a very simple idea to use the power of compound interest

It is a very simple idea to use the power of compound interest  Smart people are easily attracted by complex things, and underestimate the great influence and importance of simple ideas. But Monish Pabrai is a full pragmatist, and he will not fall into this trap. "It is a very simple idea to use the power of compound interest, a very simple idea to imitate, and a very simple idea to be honest." He said. However, when you apply some powerful ideas with great enthusiasm, the cumulative effect is "incomparable".

Smart investors only choose to buy in the big bear market


Valuation is important, but there is no need to pay too much attention. The reason is that when the market collapses and falls into a trough, and all stocks are quite cheap, there is naturally no need to value at this time. For example, in the second half of 2005, China Merchants Bank was only more than 6 yuan, Sinopec and Baosteel were only more than 3 yuan, and China Unicom was only more than 2 yuan. At this time, the valuation is not important, just buy; When the market is high, the crowd is excited, and all stocks are seriously overvalued, such as 46 yuan of China Merchants Bank, 29 yuan of Sinopec, 22 yuan of Baosteel and 13 yuan of China Unicom at the end of 2007, it is meaningless if you still want to evaluate. Only when the market is on the way up, because there may be some "missed fish", valuation will play a role. However, at this time, many stocks have increased considerably, and naturally, there is nothing worth investing in.

I used to wonder about Graham's method: where to find what he called "bargains"? For example, he said that the stock price should be less than two-thirds of the net tangible assets per share. Especially important, when his followers adopted a similar method, it has to make me pay more attention.

After a bear market, I knew that Graham's method was actually telling us that only in a bear market can we meet the kind of situation or similar situation he said. Therefore, stocks can only be bought in a bear market, and the rest of the time is not worth buying! I believe that this should be what Buffett said. There is only one chance to pull the trigger when encountering an "elephant" in a few years.

Smart investors only choose to buy in the big bear market, because it's worth it at this time; Also only choose to sell in the bull market, which is because of the value for money. As for investors who want to hold for a long time, they should buy when the market is depressed. This is the only time.


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