As a minority shareholder in the secondary market, even if we are only as big as Sesame, we still have the same rights as major shareholders. For example, net profit and cash dividends are calculated based on the share of equity held by all shareholders, even if major shareholders can participate in The management of the company, then the results of the company’s operations also belong to all shareholders.
And all the hard work put in by the company’s management (such as Vanke’s Liangliang, etc.) is ultimately rewarded to all shareholders, including minority shareholders.
The above is the bottom-level logic that equity thinking is a stock. This bottom-level logic makes no difference whether it is a bun shop for a secondary market or an unlisted company.
So why is it difficult for people in the secondary market to think about equity? The fundamental reason is that equity is at a premium most of the time. For example, Gree Electric’s 2021 ROE is 21.34%, and the dividend rate is 73%, so we should have about 15% cash dividends, right? Then this is definitely a very good business return, but this is based on 1 times the price-to-book ratio, and the secondary market hardly gives me such opportunities. The market is currently quoting equity at about 2 times the price-to-book ratio Then our cash return will become single digits, obviously there is not much temptation, far less than the pleasure that the book floating profit brought by the stock price increase gives us more intense pleasure!
But based on the equity thinking I said, it is not to rigidify ourselves to buy stocks at a price-to-book ratio of 1x. If we have a pair of eyes to recognize the continuous growth of the company, then we can tolerate more than 1x listing. Net rate purchase, because we know that as the company grows, the net assets will continue to increase until it reaches or even exceeds our original purchase price. If the company can still maintain the same ROE at that time, then we can buy according to our original purchase price. Achieving a satisfactory return on investment at the price of entry!
If we use the above logic to guide the purchase of stocks, we can achieve real equity thinking, instead of being affected by the changes in stock prices every day, because we believe that all returns are derived from the company’s operating results, so that we can Holding stocks patiently will not affect even the slightest joy of life because of the stock market! $ Kweichow Moutai (SH600519)$ $ Construction Bank (SH601939)$ $ China Ping An (SH601318)$ #Value Investment# #Shareholders’Daily# @Today’s topic @ yunmeng @朱酒
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