Chapter 32 The Crisis of the Hidden Rules of the Stock Market
Li Feng ordered another half box of mutton and said with a smile, "Now, wait."
"Wait?" Lin Menghan asked doubtfully.
Zhao Xinyue found an opportunity and explained, "Menghan, don't listen to him. The market is about to end, and it's time to sell the stocks."
"As for waiting, it's still early."
"The last time he bought Minsheng Bank, he waited for more than two months. Then he waited for Qinling Cement for more than two months. He almost waited until the opportunity was gone."
"So long?" Lin Menghan asked in surprise.
When she trades stocks, she often studies for a few days, or at most a week, before placing a buy or sell order.
However, he did not expect that Li Feng would have to wait for several months to buy a stock.
It's unbelievable.
Li Feng saw her surprised expression, so he put down his chopsticks and continued, "The feasting season is about to end. All the major players and dealers are eating to their heart's content and making a killing. They're about to unleash their sharp sickles and harvest the leeks."
"If I don't run now, when will I run?"
"As for buying, we have to wait until the new batch of chives grows out."
"Just like the ecosystem on the African savannah, the rainy season is hunting season, and the dry season is the best time to plant seeds. When we invest as retail investors, we must respect nature. During the hunting season, we must run away quickly, and during the planting season, we must seize the time to plant seeds."
Lin Menghan had never heard of anyone using such a metaphor for the stock market, and she couldn't help laughing, looking very charming. This made Li Feng's heart flutter, and he quickly turned his head away to avoid looking at her.
Zhao Xinyue had heard Li Feng's nonsense before, and she had developed immunity to it, so she comforted him:
"Menghan, don't listen to his nonsense. Actually, there are many opportunities in the stock market. Don't worry too much about your losses. You will make them back sooner or later."
"For example, the mistakenly killed plate he found last time was an opportunity."
Li Feng was invigorated upon hearing this and praised:
"Xinyue, you're right. In fact, the true meaning of the stock market lies here."
"We all know that stock trading is simple. It's just a matter of buying and selling. All you need is your hands. But when to buy and when to sell is a big problem. If the timing is wrong or the target is wrong, the performance can be very different."
"Now that it's a bear market, let's just talk about value investing. The essence of value investing is to buy when stocks are undervalued and sell when they are overvalued. The most critical thing is how to buy undervalued stocks."
"Because everyone likes good stocks, the price will naturally not be cheap."
“So, if you want to buy a good stock at a low price, you can only wait until it is in trouble!”
"This kind of hardship can be caused by a major bear market, difficulties in an industry or individual stock, or people's prejudice. For example, last year's bank stocks were a typical example of a bear market compounded by negative news and investor prejudice."
After a pause, Li Feng emphasized:
“It’s about looking for a crisis.”
"Crisis, crisis, crisis is opportunity! Only when there is crisis can we turn crisis into opportunity."
“Great dangers breed great opportunities!”
"As investors, we should like crises, we should discover crises, and we should actively embrace crises, rather than avoid them."
Li Feng earnestly taught the theory of stock market crisis that he had learned after more than ten years in the stock market.
Over the years, it is precisely the crises one after another that have created one pit after another.
Experienced stock investors will often go against the trend at this time and carefully distinguish whether this is a trap or a pie.
If it is a pie, I will buy it resolutely and hold it patiently until I make a profit.
It works every time.
Upon hearing this, Lin Menghan and Zhao Xinyue fell into deep thought.
Do you enjoy crises? Do you spot crises? Do you turn crises into opportunities?
When faced with a crisis, instead of running away, you embrace it?
Li Feng's words were so shocking that they could completely overturn people's three views.
Li Feng saw the expressions of the two people and knew that they were having trouble digesting the information for a while, so he explained softly:
"Think about it. Take the 2008 global financial crisis, for example. How much was a square meter of housing then? It dropped to over 2,000 yuan per square meter, right? And what happened next?"
"In less than two years, it doubled."
"That same year, what was the lowest point for the stock market? 1,664 points. And then what happened? It also doubled."
"If there hadn't been the global financial crisis in 2008, would housing prices and stock prices have been so low? Definitely not!"
"So, in the past two years, with the stock market bear market and the economy in recession, we shouldn't be discouraged, but excited. Because only in such a recession can you buy high-quality assets at low prices, which will lay the foundation for your assets to reach a higher level in the future."
Lin Menghan gradually reacted, her eyes lit up again, and she said, "So, now we should start looking for opportunities?"
Li Feng nodded and said, "Not bad."
"Then, how do I find it?" Zhao Xinyue was a little confused.
She had just entered the stock market and knew very few stocks. For a moment, she didn't know where to start and felt confused.
"You can start with what's around you,"
Li Feng pointed out, "Peter Lynch, the American investment guru, started by looking at opportunities around him and caught several ten-fold stocks."
"Around? Crisis?" The two women pondered.
Suddenly, Lin Menghan's face froze, and she murmured, "Is this... a crisis?"
Zhao Xinyue was stunned and asked, "Menghan, what crisis?"
She blinked her beautiful eyes and looked at Lin Menghan who was in deep thought, but she couldn't believe that Lin Menghan had come to the realization so quickly.
"this……"
Lin Menghan's long eyelashes trembled a few times, and she seemed to gradually make up her mind and said, "It's our family's business..."
"Your family business?" Li Feng asked doubtfully.
As far as I can remember, Lin Menghan's family owns several tobacco and alcohol stores, and their business seems to be pretty good.
"Well, since last year, my parents have often complained about how bad business is. I heard their wine inventory alone is several million, and they often have conflicts over this..."
Lin Menghan said slowly, "A few days ago, he said that if anything unexpected happened to the business and he couldn't make ends meet, he would sell the house I live in..."
Zhao Xinyue looked at Lin Menghan in surprise. She never expected that this best friend who had always been so strong had such a weak side.
Li Feng lowered his brows and thought silently.
After a few breaths, he slowly said:
"The liquor industry is indeed facing an industry crisis, but we didn't expect it to come so quickly and so violently."
"The Spring Festival is traditionally a peak season for liquor consumption, but unexpectedly, some businesses are experiencing cash flow difficulties..."
Zhao Xinyue frowned and asked, "Why?"
Li Feng flipped open his laptop and pulled up several brokerage research reports. He said, "Xinyue, I don't know if you still remember that at the end of last year, the baijiu industry was hit by the 'plasticizer scandal.' The entire baijiu sector plummeted. Jiugui Liquor hit its limit down four times in four days, wiping out billions of yuan in market value. Nearly 100 billion yuan flowed out of the entire baijiu sector."
"Misfortunes never come singly. After the plasticizer issue, there were restrictions on 'three public expenditures,' and the 'alcohol ban,' plus the 'drunk driving ban' introduced in 2011. The entire liquor industry is truly shrouded in a dark cloud, with negative news weighing on it like nobody's business."
"In fact, even without these unfavorable policies, it is time for the entire liquor industry to adjust."
"Why?" Lin Menghan asked unconsciously.
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