Chapter 50 Inverted Pyramid Position Building
"The primary counterparties of value investors are the companies they invest in, and secondarily other investors. However, now is a bear market, so we only need to consider the companies we invest in."
"Value investing also has traps? It also requires gambling?" Lin Menghan was caught off guard and opened her eyes wide.
"That's right," Li Feng said. "In the financial market, gambling is everywhere, and people are losing their lives every day. There are many companies and industries that were once very good, but they have fallen. Isn't that the Yijing Optoelectronics that you bought before?"
"When the new energy boom hit, it was incredibly prosperous, but once production capacity increased, it fell back into hell... I don't know if I can ever climb out of this hell again, so when I buy companies, I only buy those with very, very strong moats. Even if these companies fall into trouble temporarily, they can still climb out of the pit and become even stronger by relying on their unique advantages..."
Lin Menghan listened quietly, thought, and finally said: "This is why you buy Kweichow Moutai"
"Yes, but it's still a bit expensive. As the saying goes, good stocks have good prices. No matter how good a stock is, it shouldn't be bought too expensively, otherwise it won't be worth it. It's like buying a piece of clothing worth 200 yuan. If you buy the same piece of clothing for 500 yuan, it's too expensive. If you buy it for 100 yuan, it's cheap."
Lin Menghan remained silent.
Li Feng stopped talking.
Many times, for many things, even if you say them a hundred times, others, especially investors, will not listen.
Only through repeated losses can they see the way forward clearly.
It is easy to know, but difficult to practice.
In the blink of an eye, August 1st arrived.
The stock trading competition organized by Gan Yitong and Changzheng Securities Sales Department has officially begun.
In order to carry out this event successfully, the two companies specially renovated several large trading rooms, each of which was equipped with several computers and two LCD screens hanging above them, which could project the market trends on a certain monitor at any time.
Li Feng chose a room with five computers in it. Lin Menghan, Zhao Xinyue, and Yao Jiu each had one computer, and there was one left. After selecting the computer, he made his account public and used the rest of his positions to buy Kweichow Moutai.
The cost was 93 yuan, so I stopped moving.
Liu Bin was in the room opposite. He saw Li Feng's operation on the public screen and glanced at the opposite room with disdain.
He began to operate in the short term, buying and selling popular stocks such as Shanda Technology, Fenda Technology, and Shanghai Steel Union, and the battle was in full swing.
It attracted a large number of retail investors to watch.
Time flies, and suddenly it is Monday, September 2, 2013.
Kweichow Moutai hits limit down!
It dropped directly from 117 yuan to 105 yuan.
After a few days of adjustment, it exploded on September 17 and 18, directly breaking through 100 yuan.
It also shattered the dreams of countless bulls.
Mr. Dong Zhen quietly closed the webpage, ran naked for 30 minutes, and then uploaded the video to the Internet after censoring it.
When netizens saw this, there was an uproar.
Discussions and doubts about the liquor industry and liquor stocks have reached a fever pitch.
One post after another on Taoguba, Xueqiu, and other stock forums directly pushed Kweichow Moutai to the top of the hot list.
"In the future, as the aging population becomes increasingly serious and people pay more and more attention to health preservation, who would dare to drink baijiu? Do you know that it contains Class I carcinogens? Do you know that it contains plasticizers? There will be no market for baijiu..."
"It's so expensive. No one in high positions drinks it, and people at lower levels can't afford it. Baijiu isn't selling well in the market right now..."
"Who among the young people drinks baijiu? They all drink red wine or beer. If you don't believe me, go to the barbecue stalls on the street and see, no one orders baijiu..."
"Baijiu, an industry with no future..."
This is the emotion, it has completely reached the freezing point.
Even the logic of liquor stocks is denied.
Lin Menghan looked at it, her face turned pale, and she muttered to herself, "Oh no, it's below 100 yuan, should I still buy it?"
Li Feng saw it and shook his head secretly.
There are so many ghost stories in the stock market, with thousands of people telling their stories. Even though I told Lin Menghan countless times in advance, once Kweichow Moutai fell below 100 yuan and all kinds of bad news came, the first thing she thought of was fear, not greed.
Awareness is still not enough.
The mentality is still not right.
Li Feng closed the webpage, looked at Lin Menghan and asked, "What does your father think?"
Lin Menghan came back to her senses, recalled the research she was responsible for, and said:
"My dad? He said that the overall market is not good right now, but Kweichow Moutai is still okay, just with a little less profit. Many other companies have started to focus on low-end brands, which has led to the saturation of the low-end market. The competition is very fierce. Many companies have been working hard to enter the market for a long time, but found that not only did they not make any profit, they started to lose money..."
"As for Kweichow Moutai, he is still optimistic about it."
After saying that, Lin Menghan remembered the ideas that Li Feng had repeatedly instilled in her before, and couldn't help blushing slightly.
I secretly cursed myself for not living up to my expectations.
Even such a small bit of bad news can scare me.
"Buy it, one warehouse for three people." Li Feng said.
"Why not buy more? After all, we have been waiting for several months." Lin Menghan recalled the key points of value investing and felt a little greedy.
"After this important point is broken for the first time, the bears will rush in and sell it off very deeply. Let's build a position by inverting the pyramid. It's simple. First, buy one-third of it. When it breaks down again, buy another third. There's no need to buy layer by layer. After all, we don't have hundreds of millions or tens of millions of dollars."
Next to him, Zhao Xinyue looked at the share price of Kweichow Moutai and retracted his hand that was about to place an order.
There was very little money in her account. Even with the money transferred in recently, it was less than 40,000 yuan. If she wanted to buy Kweichow Moutai, she could only buy four lots.
Four hands is too little.
After calculating for a long time, she looked up and asked hesitantly, "Is it so expensive? One share costs more than 90 yuan. Buying one lot would cost nearly 10,000 yuan! Other stocks are only a dozen yuan, and the cheaper ones are only a few yuan."
Li Feng smiled and consoled her, "Xinyue, to determine whether a stock is cheap, you can't just look at the share price; you have to look at its earning power. Some stocks are cheap, over one or two yuan, but they lose money year after year. Their PE ratios can reach hundreds, or even thousands, or even be negative. Kweichow Moutai's PE ratio is over 90, but it's only 13."
Zhao Xinyue hardened her heart but still couldn't do it.
This is the typical mentality of new stock investors.
Many new stock investors only consider the stock price when buying and selling, which leads to the fact that in a bull market, low-priced stocks are often subject to speculation.
Li Feng was helpless and said, "Then you should buy China Merchants Bank."
"China Merchants Bank is too expensive. When you bought it, it was just over 7 yuan. How much is it now? It's 50 cents more expensive."
"Xinyue, this is not buying vegetables. It doesn't matter if it's a little expensive. If the price increases by one or two times in the future, do you still care about the fifty cents on the vegetables?" Li Feng was speechless.
Many investors are like this. They dare not buy when the price drops, and do not want to chase when the price rises. As a result, they miss out on big bull stocks.
"How much?"
"You have little capital, so don't consider splitting your positions. Just hold all positions."
"good."
"What are we having for lunch?" Zhao Xinyue bought some stocks and felt happy.
"You two choose."
"A big plate chicken restaurant just opened downstairs, why don't we go try it?" Lin Menghan suggested.
"good."
The three of them went downstairs to eat.
You know what, the taste is authentic, the chicken is tender, the potatoes are soft and glutinous, and the taste is spicy but not greasy. The three of them ate it with gusto.
Before I knew it, several months had passed.
After New Year's Day 2014, rumors about restarting the IPO were heard frequently.
Experienced stock investors all know that this is just empty talk.
The IPO is likely to be restarted.
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