Insights on stock investment:
1) Don’t be afraid of loneliness, but make sure your judgment is correct. It's impossible to be 100% certain; you need to find the flaws in your logic. Buy in batches when prices go down, and sell in batches when prices go up.
2) You need to have a big heart and be willing to bear paper losses. Don’t sell when prices go down, but be willing to buy more. This approach is completely opposite to what people generally do in the stock market.
3) The key to our investment is to decide whether to buy based on value rather than price, just as Graham said in "The Intelligent Investor", "Buy stocks like you buy vegetables, not like you buy perfume."
4) I think you shouldn’t try to guess market trends or predict the future. It’s best to buy companies you think are valuable and then just wait; perhaps the waiting time will be long, but it saves a lot of trouble. Don’t think about what the stock market will be like or how the economy will be.
5) Try to stay away from market emotions. The market is a place of strong emotions, easily triggering fear and greed, and it can provoke various flaws in human nature.
6) I believe the most important trait in investing is to remain calm and composed. One should not be too emotional but rational. If your stock investment is influenced by emotions, your judgment will be affected.
7) People are indeed emotional. Even those who provide advice don’t like companies in distress; people tend to stay away, but actually, such companies may be very valuable. (It's a dilemma, not a dead end.)
8) Buy assets at a discount rather than buying based on earnings. Short-term fluctuations in earnings can be very large, while asset changes are generally slower. If you buy based on earnings, you need to have a much deeper understanding of the company.
9) A company can completely inflate the earnings reported on its financial statements. Earnings can be manipulated legally and reasonably. If people only look at earnings, their understanding may be distorted.
10) Decide to buy such stocks: those that are in decline but have a large amount of net assets, with stock prices close to historical lows rather than highs, which others overlook.
Lastly, an example: If people predict earnings (earnings per share) to be 5 yuan, and the result is 5.5 yuan, the stock price often rises significantly in such cases. However, the uncertainty is very high, and even the sustainability is very low! Because you cannot predict whether the next cycle's quarterly report, mid-term report, or annual report will have an upward revision!
However, if the net asset value per share is 10 yuan, and a quality stock suffers a severe mispricing in a bear market, falling to near its net asset value or even below it, it is almost impossible for it to drop to 8 yuan or even below 6 yuan in the future, but the probability of it returning to 10 yuan or even exceeding 10 yuan is quite large; this is certainty!
Therefore, we should invest based on certainty, not based on uncertainty and speculative predictions!!
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