Chapter 82 Profiting Across Markets
Li Feng's words made Zhao Xinyue and Lin Menghan fall into deep thought.
Li Feng did not disturb them and drank tea quietly, one cup after another.
After a long pause, Lin Menghan raised her head and said, "If that's the case, how can retail investors survive in this market?"
Zhao Xinyue spoke frankly and said, "Hey, Li Feng, stop keeping us in suspense and just tell us directly. How should retail investors operate?"
Li Feng sorted out his thoughts and continued:
"If you want to survive in this market and make big money, you must stay away from low-probability investments, such as chasing hot spots and themes. Instead, look for high-certainty opportunities and place big bets. Only in this way can you achieve compound interest on your wealth."
"Overall, the investments we've made the most money over the past three years have all been those with high certainty, such as arbitrage within the ST system, the "eating market," investing in convertible bonds with 10x leverage, and investing in new stocks with 10x leverage."
"As for those low-certainty investment opportunities, such as speculation in Qinling Cement, CRRC, East Fortune, LeTV, etc., you dare not and cannot take a large position. Even if you make a lot of profit, it will not change the relative profit and loss of the overall position."
"Menghan, now calculate the profits of my account from the two investment strategies over the past three years."
Lin Menghan nodded, opened Li Feng's account, and started to calculate with Zhao Xinyue.
A quarter of an hour later, Lin Menghan turned around, her beautiful eyes twinkling as she said, "A rough calculation shows that the profit from speculation is less than 500,000 yuan, while the profit from investment is several million yuan."
Beside him, Zhao Xinyue excitedly added:
"The ST investment strategy brought your account over 100,000 yuan for the first time. The food market and investing in Kweichow Moutai brought your account over 500,000 yuan. 10x leverage convertible bonds increased your account to 2.6 million yuan. 10x leverage on new shares has already brought your account over 3 million yuan, nearly 4 million yuan!"
She became more and more excited as she spoke, "Li Feng, if we can seize a few more opportunities like this, it's very likely that our account will reach the 10 million mark!"
Li Feng smiled bitterly, poured a basin of cold water on her, and said:
"True low-risk, high-return investment opportunities worth a big bet on are extremely rare. If you can seize one a year, you're already very lucky. If you're greedy and want to seize it every day, be careful not to fall into a trap."
"If you study it carefully, my investment process, starting with ST, has been going on for six years. Each investment can take anywhere from a few months to several years."
When she heard that she would most likely have to wait for several months or even years, Zhao Xinyue's joy suddenly disappeared and her little mouth pouted unconsciously.
Li Feng advised:
"Only by being happy and able to endure loneliness can one maintain prosperity. Similarly, in the stock market, only by resisting the temptation of quick speculation can one secure high-certainty investment opportunities."
Lin Menghan opened her phone, wrote this sentence on WeChat, and forwarded it to herself.
Zhao Xinyue sighed and stared at the 3.7 million yuan lying in Li Feng's account. As she stared at it, her cheeks inexplicably turned red.
Li Feng naturally knew that she was distracted again.
Alas... After following me in investing for several years, Xinyue's temperament remains the same. In comparison, Lin Menghan's understanding of investment has improved rapidly.
This may be talent.
Investing in the stock market requires a lot of talent. Some people can understand the essence of the stock market with just a few words and walk directly onto the smooth road, with a smooth life; while some people fall into this pit and then fall into that hole, wandering around in circles on the wrong path all their lives without realizing it.
This is the difference in cognitive ability.
People with strong cognitive abilities will respect common sense and see through those false obstacles at a glance. They will not waste their lives and property on those futile speculations.
People with weak cognitive abilities tend to overestimate their abilities. They fantasize all day long that they can defeat the dealer and play tricks on the main force. They work hard all day long looking at charts, drawing lines, measuring, and looking at prices, but they don’t know that these things firmly confine themselves in a fight with the dealer’s main force with a low winning rate.
The result is predictable. One day, you will die in the trap carefully set by the dealer or the main force.
Survival of the fittest, a rule that only exists in the jungle world, has been repeated again and again in the stock market, from the beginning of the stock market to the present and into the future, without stopping.
Li Feng thought about it and simply copied this passage to his own forum.
Zhao Xinyue and Lin Menghan saw it and read it over and over again.
Seeing that they seemed to understand something, Li Feng added:
"This is just the most basic part of an investment strategy. If you want to survive in the stock market for a long time, you need to improve your knowledge and always pay attention to the macroeconomic conditions of the stock market."
"We must understand the current market situation, whether it is a bull or bear market, and which stage of the bull market or the bear market it is in, so as to follow the trend and avoid going against it."
"For example, now is the early stages of a bear market, the most dangerous period. You must stay away from the stock market to preserve your gains. You must not go against the trend or go against the general trend. Your ambitions are so great, but in the face of the general trend, they are no match for ants."
Lin Menghan added these few sentences on WeChat.
Zhao Xinyue couldn't keep still. She curled her lips and asked, "In the early stages of a bear market, can we only go short? Are there no other ways to profit?"
"Xinyue, you're so greedy," Li Feng said. "The bear market is here, and others are losing everything they invested, yet you're still thinking about making money."
"Really not?" Zhao Xinyue sighed regretfully.
Li Feng smiled mysteriously and said, "Yes."
"Really?!" Not only Zhao Xinyue, but even Lin Menghan widened their eyes and looked at Li Feng intently.
But, Lin Menghan reacted immediately and said, "Are you going to short sell?"
Zhao Xinyue was horrified when she heard this and advised, "Li Feng, please don't short our A shares. Everyone is hurting enough right now, don't rub salt into the wound."
Lin Menghan also added: "I heard that the stock market has plummeted in recent days, and foreign forces are shorting our A shares. Our national team is trying to support the market. If you short A shares at this time, wouldn't that be going against the country?"
"Yes, Li Feng, if you do this, it would be an act of treason. I won't allow you to do this!" Zhao Xinyue also said with glaring eyes.
Both of them looked alert and concerned as they instructed Li Feng.
Li Feng only felt a warmth in his heart.
He organized his thoughts a little and said:
"Don't worry, I will never short sell in my life. That's an activity with limited returns and unlimited risks. I won't do futures either. The essence of the futures market is to provide hedging for the real economy. If we enter, that's the price we'll pay."
"Of course, I won't bet against the national team. That's unwise. Our funds, when faced with the national team, are like a mantis trying to stop a chariot. We are overestimating our own capabilities."
“The opportunities I’m talking about aren’t in the stock market, but in other markets. Only by trading across markets can we avoid and take advantage of the bear market crisis.”
“Crisis, crisis, crisis brings opportunity.”
"Where is the opportunity?" Lin Menghan asked after hearing this.
"Hurry up and tell me." Zhao Xinyue was impatient when she heard that there was another chance to make a fortune.
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This chapter contains the author’s heartfelt words, and I hope it will be helpful to fellow investors.
Thank you all for your gifts. Your encouragement is my motivation to continue updating.
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