#雪球星计划# #2022Investment Summary#
Three years have passed since 2020. At the beginning of 20, I felt that I suddenly had an epiphany about value investing. The way to enlightenment is reading. It reminds me of a couplet: “Hundreds of years old homes in the world are nothing but good deeds, and the first good thing in the world is reading.” The two books that made me realize, one is “Still Water Flows Deep” by teacher Zhang Yankun, and the other is Jingyi Investment “Investing in Simplicity”.
After an epiphany, you must apply what you have learned. Practice has proved that value investing is really useful, it really works, and it is not a survivor bias.
The three-year capital market has not been calm and fluctuated violently, but it is this kind of violent fluctuation that can bring additional excess returns to value investors. When the market is extremely pessimistic, buy at a low price; when the market is in a carnival, sell at a high price. In this way, not only can you earn money for enterprise development, but you can also earn money for market fluctuations, and you can enjoy the multiplier effect brought about by Davis’ double click.
Although I have made a lot of mistakes in the past three years, I am quite satisfied with the overall benefits. The three-year cumulative rate of return is 251.25%, and the annualized rate of return is 52%. The actual rate of return is double the target rate of return, and the maximum retracement is 41%. Although the retracement is large, it is within the acceptable range.
The main benefits in the past three years have been achieved by five companies in two industries.
In 2020, it will mainly rely on Yanghe shares and Kouzijiao;
In 2021, it will mainly rely on Huadong and Yuyue Medical;
In 2022, it will mainly rely on Kouzijiao and Lepu Medical.
These five companies belong to liquor and medical treatment, which together contributed about 120% of the income of the entire real account, and the remaining investment was responsible for 20% of the losses. The loss-making companies Weichai Power, Mengbaihe and Laofengxiang.
Judging from the breakdown of the year, the yield in 2020 is the highest, reaching 72.76%, completely catching up with the big bull market of liquor, and at the beginning of 21, Yanghe lightened its position and sold it when people were buzzing. At the beginning of 2020, I increased my position with the idea of taking over the market for the country. I experienced many magical moments such as the US stock market circuit breaker and the oil price falling into negative numbers. However, the ending was perfect, a big bull market that made money.
In 2021, the market style will change suddenly, and the consumption white horse led by liquor will peak at the beginning of the year. 21 years is the highlight moment for new energy, photovoltaic and other track stocks. Unfortunately, my thinking has not been completely turned around, and I do not have new energy and photovoltaics in my hand. But fortunately, Huadong Medicine and Yuyue Medical, a beneficiary stock of the epidemic, have won the battle by relying on the concept of medical beauty. Although the overall rate of return is not as good as in 2020, it has also achieved a rate of return of 64.51%.
In 2022, Lepu, which was affected by the centralized procurement, had a heavy position. However, in the first half of the year, Lepu performed very poorly. No one would have thought that the industry with the highest performance in 22 years was coal. But in the second half of the year, especially in October when the market was the worst, the pharmaceutical industry and Lepu rebounded well. When I bought the white horse at the end of October, Lepu provided me with sufficient ammunition. Relying on replenishing the position at the end of October, Kouzijiao made the bleak account become popular in the last two months of the bleak year, and the final annual profit was 23.6%. It is not easy to achieve such results in an environment where the Shanghai Composite Index fell by 15%, the Shenzhen Composite Index fell by 26%, and the ChiNext Index fell by nearly 30%. What more bicycles are needed?
After three years of value investing practice, the effect is quite satisfactory. First of all, I made investments strictly from the perspective of the enterprise. I did not regard stocks as bargaining chips, but regarded myself as a shareholder of the company. This seemingly useless perspective is actually the cornerstone of investment success. Without a corporate perspective, you are just a speculator and a gambler, and you will get nothing in the three years of chasing ups and downs.
Second, take full advantage of Mr. Market’s quotes, not his intelligence. Open positions when the market is undervalued, cover up positions when the market is seriously undervalued, and reduce or even liquidate positions when the market is overvalued. Be enterprising in a bull market, and normal in a bear market. He can not only calmly accept the rise of stock prices, but also face the plunge of stock prices calmly and calmly. Don’t be surprised by favor or disgrace, just watch the flowers bloom and fall in front of the court. Going or staying has no intention of following the clouds and clouds in the sky.
Third, long-term holding with retreat as advance. In the past three years, it has been full of money. There is no timing and no position management. The philosophy I believe in is: You must be there when it thunders, otherwise it will rain 
It must not be there.
It is easier to judge whether the company’s value is overvalued or undervalued, but it is difficult to judge whether the company’s stock price will rise or fall in the short term. Since the stock price cannot be predicted, continue to hold firmly. As long as it is not seriously overvalued, it will not be sold. In this way, although there will be no bullets to buy bottoms at the bottom, it can reduce the frequency of transactions and reduce friction costs. You don’t have to keep an eye on the market every day, and you don’t have to worry about daily fluctuations. Don’t miss the magic moment when the stock price soars.
Compared with index funds, or theme funds, I prefer to invest by myself. The concept of index funds is very good, and I agree with it very much, that is, to obtain the average return of the market. However, if I can determine fat and thin at a glance, and easily select the number one industry with low valuation from an industry, then why should I allocate resources to the second to nineteenth place?
If there is a law of 80% in investment, the top two in an industry will earn 80% of the industry’s profits. Then I evenly distribute the positions to the top two in the five industries. So compared to investing in index funds, I can get 400% return with 100% investment. If the operation is more aggressive, you can divide the funds into ten shares and invest in the leaders of ten sub-sectors. I believe that the performance will far exceed the index fund. You can also experience the fun of researching industries and companies during the investment process. This is what Mr. Gao Yiqiu said: I would rather count the moon than the stars 
.
Looking back on the practice of value investing in the past three years, I am already very satisfied with the annualized rate of return of 52%, which has exceeded my expectations. My goal is to annualize 26%, doubling in three years.
Looking forward to 2023, my point of view is still very optimistic. Because I believe that the most difficult time has passed. 2023 is the year when Xiongguan is as long as iron, and now we are going to start from the beginning. The price-earnings ratio and price-to-book ratio of many companies are at historically low levels, and they already have a fairly strong margin of safety and cost-effective investment.
The main positions of my firm offer: Kouzijiao, Tencent, Lepu Medical, Hikvision, Midea Group, Huadong Medicine, and Yili. This year’s goal is 30%. Maybe many short-term masters dismiss my goal, thinking that three daily limits can easily complete the task. But I still stick to my goals and principles, and believe that: slow is fast, less is more. Lower your own income expectations, grow together with the company, and encourage all golfers!
@乌恩InvestmentZhang Yankun @静逸投资@谢和屋
$Kouzijiao(SH603589)$ $Huadong Medicine(SZ000963)$ $Hikvision(SZ002415)$
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