Chapter 92: Breaking Out of Your Own “Information Cocoon”
A theme stock, a blue chip stock,
These are two different styles of stocks.
The shareholders involved are often clearly divided.
I don’t know why Song Dongpeng bought these two companies with completely different styles.
"Has someone recommended some stocks to you?" Li Feng dialed the number and asked tentatively.
"How did you know?" Song Dongpeng was shocked. "Originally, I bought Gree Electric Appliances, intending to do value investing, but after holding it for a few months, it didn't go up much, so I wanted to move to the ChiNext. A friend happened to recommend Qianshan Pharmaceutical, and I did some research and moved half of my position. But just as I bought it, the stock market crashed..."
Li Feng was speechless.
Song Dongpeng is a typical example of someone who loses more than he gains. He always wants to climb a mountain and never see another mountain higher. He was originally holding Gree Electric Appliances and nothing was wrong with him, but then he became jealous of others making more money on the ChiNext board and started speculating. In the end, he was trapped at the top of the mountain.
It seems that Song Dongpeng is just an ordinary stock investor.
Before he had established his own trading system, he was shaken in his strategy by someone else's easy stock recommendation and made a 180-degree turn, switching directly from value investing to price speculation.
After all, it is difficult for people to overcome the greed in their hearts.
Li Feng pondered for a moment and said, "Editor Song, I suggest that you sell the Qianshan Pharmaceutical stock. As for Gree Electric Appliances, you can continue to hold it, or you can sell it first and buy it back later."
"As for the reason, because..."
Li Feng briefly repeated what he had told Zhao Xinyue and Lin Menghan a few days ago about the 80/20 theory, investment speculation, and the principle of buying low and selling high.
As Song Dongpeng listened, an idea suddenly struck him. He said, "That's a good angle. Li Feng, please write an article. The national team is trying to rescue the market, and we need articles like yours that strongly support the market and encourage investment in blue-chip stocks. Quick! Quick!"
"Huh?" Li Feng was stunned when he heard this. He didn't expect Song Dongpeng to think about work.
Song Dongpeng thought Li Feng was unwilling, so he advised: "Hey, Li Feng, please do me a favor. You have been writing bearish notes these past few days. Why don't you write something bullish? Just do me a favor."
"Okay." Li Feng agreed, hung up the phone, and was about to write.
Zhao Xinyue rolled her eyes and said, "Editor Song is really too much. When he needs you, he begs you to write articles, and when he doesn't, he kicks you away."
"Xinyue, you don't understand what goes on inside the newspaper. Some things aren't decided by Editor Song alone," Li Feng explained. "News requires a stance. What news can and can't be published depends on guidance from above, and implementation must be carried out below before reporters can organize interviews."
"Tsk - isn't this just selective reporting? Is this news still worth watching?" Zhao Xinyue was unconvinced.
"This is how society works. Not only is news selective, but everything you see is selective. This includes everything you see and access in life and the stock market. All the advice and information you see and come into contact with is one-sided and selective. All of this shrouds your understanding, creating what's commonly known as an 'information cocoon.'"
Li Feng continued, "This 'information cocoon' determines your outlook on life, your values, and even your personality and behavior, thus shaping the real you."
"Sometimes, being in an 'information cocoon' can be beneficial, protecting you from harmful information and thus preventing harm. But sometimes, it can be harmful, causing you to become paralyzed, cognitively stagnant, and unable to improve, thus trapping you in the same place for life."
"In the stock market, this 'information cocoon' effect is particularly prominent. Some people remain trapped in price speculation for their entire lives, unable to extricate themselves, simply because they believe this method can make them rich overnight. Others are trapped in chasing hot spots and drawing lines based on charts, believing this method can outmaneuver the market makers and lead to financial freedom. Many others rigidly follow value investing, holding on to companies that are already on the road to bankruptcy, and never regret it until their death."
"How can we break out of these 'information cocoons'?"
Lin Menghan raised her head, her eyes shining, and asked the question that Zhao Xinyue wanted to ask.
Li Feng slowed down, sorted out his thoughts, and continued:
"Read more, read good books. Read books that describe stock history, stock events, and stock processes, rather than those gibberish and junk books. Spend less time on forums and read less of the posts there, because there's simply too much information there. If you don't have enough knowledge, it's extremely easy to go astray, and even if there's some useful information, you won't be able to discern it."
"Not to mention, we're in the age of big data, and everything is recommended by intelligent AI algorithms. One day you search for a guy or girl on Douyin, and tomorrow they'll push a bunch of handsome guys and beautiful girls to you. These recommendations only make you more addicted to your own 'information cocoon'."
Zhao Xinyue was straightforward and asked, "What books are you reading? I bought those last few books and just finished reading them. I still have some understanding. I understand some simple concepts."
"Let me recommend a few books to you: 'The Hong Kong Stock Market,' 'A History of London Securities and Finance,' and '70 Years of the U.S. Stock Market.' Read the third one carefully, especially the third. Remember, speculation is as old as the mountains. There's nothing new in the stock market. What's happening now has happened before."
Li Feng said, "Just like fashion trends in the clothing industry, military coats are popular this year to keep warm, but in fact, decades ago, our parents were tired of wearing them. Fashion is a cycle, and so are stocks."
“Stock history won’t lie. Only time can screen out the right investment methods.”
Lin Menghan thought for a moment and asked, "Are there any books describing the Chinese stock market?"
"From our country?" Li Feng thought for a moment and said, "There are some, but they are too mechanical and old-fashioned. I can't stand reading them. Forget it, I'll just write one myself."
"Write it yourself?" Zhao Xinyue smiled, her eyes curved. "How do you write it? Do you want it published?"
"As for the name... let's tentatively call it 'The Ultimate Bullish Investor Relations'. We might change the name later..." Li Feng pondered. "As for how to publish it, I'll just post it online..."
"Can I make money?" Zhao Xinyue was a little money-grubber, with golden glitter in her eyes.
Li Feng laughed and said, "I want to make money by writing books, but it's really hard to make money. However, I can still make enough money to buy vegetables every day."
Zhao Xinyue pouted and said, "For such a small amount of money and such a huge effort, it's better not to write it."
Li Feng smiled bitterly and said:
"I could really make a lot of money writing books and selling courses to profit from the "leeks," but I'm not that kind of person. My books clearly explain how to trade stocks, which path to take, and why. I write books to kill time and find something to do. Now that the bear market is coming, the "leeks" have been pretty much ripped off, and it'll take at least six months to recover. I have to find something to do."
"An even more important aspect is to record this stock market journey in detail. If you encounter a stock market cycle in the future, you will have a reference and a basis and direction for thinking. Remember, the stock market is cyclical. What is happening now has happened many times in the past. There is nothing new in the stock market."
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