Chapter 348: Evolution Again: Recommending Lynch’s classic book “Peter Lynch’s Successful Investment”
There is a golden house in the book.
There are thousands of bushels of grain in the book.
There is beauty in books,
The ancients did not deceive me.
I believe many people have read Peter Lynch's Successful Investment.
Seemingly ordinary,
In fact, every word is precious and worth a thousand gold.
In order to improve my investment skills, I bought dozens of books by investment masters.
But, looking back now,
Only a few of them are classics.
These days, I opened this yellowed book again.
Every chapter, every section, every paragraph, every word,
It seems familiar, yet the meaning is different, which makes people alert.
And, just so, it answered and resolved some of the problems that have been bothering the blogger these days.
It’s still about how to build your own investment system.
1. The early investment system.
Many years ago, when I first entered the stock market, I was just like many other new investors, speculating blindly.
At the beginning, I was blind and entered the market with funds. I only knew the tickets, but the blogger didn’t know the tickets.
It feels like entering a strange, exciting, huge and profound industry.
Bewildered, excited, and trembling with fear.
Naturally, buying tickets at that time was no different from gambling. You would buy whichever ticket you liked or whichever ticket had the most explosive news. There was no logic at all.
Naturally, it was a huge loss.
In the 2008 bear market, I lost 80% of my money, paid the biggest tuition fee, and received the greatest risk education.
After this round of education, the blogger seems to have come to his senses.
He began to buy a large number of classic masterpieces, honestly followed value investing, looked for low PE, low-risk investment opportunities, and also formed his own conservative investment prototype.
In a blink of an eye, several years passed.
In the blink of an eye, it is 2020-2021.
2. The supplemented investment system.
At this time, the market suddenly changes. In the calm, a huge wave is brewing. It is at the critical moment of the bull-bear transition.
The old economic system and the group rules are collapsing, and the new logical structure has not yet been established. The market is full of mud and sand, and people are in panic.
Countless people were at a loss.
Naturally, this also includes bloggers.
By chance, the blogger recalled the inflation bull market from 2005 to 2007, and found that everything now seemed familiar.
So, after several days of deep thought, the blogger chose the big inflation cycle.
Several years passed in a flash.
After several years of hard work, even trepidation, we survived the three-year bear market.
3. Today's investment system.
Before I knew it, it was the end of last year.
At the end of this big bear market, the blogger thoroughly clarified his investment ideas by writing this memoir-like book, and established an investment system of macro trends - industry trends - individual stock fundamentals, which was very reaping great rewards.
During this period of time, it seems that my thinking is out of control.
Maybe it's the nature of lazy people.
The blogger believes that we should focus on the industry and not individual stocks, and focus our research on the macro and industry.
Naturally, the research on individual stocks was also neglected.
This investment method ensures that the blogger is basically correct in the general direction of investment.
However, it is precisely because too much energy has been put into analyzing macroeconomic and sensitive news at home and abroad that
As a result, I was extremely nervous and trembling all day long.
Because the future is uncertain.
Any analysis of the future is subject to various unpredictable accidents.
The blogger wants to increase the rate of return by predicting the future.
This will definitely cause tremendous mental pressure on yourself.
This situation lasted for a long time, and the blogger didn't even notice it.
Until I encountered a hot stock that was always on the list of killing pigs.
The pig-killing list + hot stocks, when these BUFFs are superimposed, basically no one has a good ending.
However, this is indeed a high-growth value stock that is hard to put down.
And, it's frighteningly underestimated.
So, faced with this situation, what should we choose?
Should we hold on to an unpredictable future, or choose a certain present?
Does investment income come from the company's own profits, or does it come from the gift of the times?
Faced with these problems,
After several years of hesitation, confusion and bewilderment, it came to the blogger again.
The blogger thought about it for a long, long time, but still had no answer.
This question tormented the blogger for dozens of days until he read the classic book "Peter Lynch's Successful Investment" again.
Suddenly I realized.
Very encouraged.
The returns on investment fundamentally come from the company's own profits, and the company's own profits are deeply affected by the macroeconomic situation.
When researching investments, we must ultimately focus on the enterprise itself.
The most critical classic yardstick is that the company's price-to-earnings ratio = growth rate.
At this moment, the blogger discovered that the previous investment system still had some shortcomings.
When studying investment, one must start with the macro trend, which solves the problem of when to enter the market and the position, and thus ensures the safety of one's own funds at the macro level.
When researching investments, we must start from the industry cycle, which is the key to whether to invest in an industry.
When researching investments, the most important thing is to focus on specific companies and the quality of the companies, which determines the height of your investment.
We should shift more focus to the research on enterprises, which is tangible and has great certainty.
Instead, we should focus on the analysis of various macro indicators and international events.
Those are not unimportant, but because they have very large uncertainties,
We should focus our energy on 28 points, 80% of which should be on enterprises and 20% on the macro level.
Investing means investing in enterprises.
As long as the company you buy is priced right (PE), the industry is booming, and it has great growth potential, why worry that it won't go up in the future?
The biggest change in this investment method is the mentality.
From the previous fear, hesitation and anxiety in facing various unpredictable macro-future situations, we have become confident and down-to-earth.
Investing is truly a vast subject that requires constant progress and evolution of one's cognition.
I would like to recommend again this classic work by the investment master, "Peter Lynch's Successful Investment", which is worth reading again and again, and it will always be new.
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