When the economy is bad, it is a good time to look at the company, because DCF is used to value the company, and the cash flow decreases in one or two quarters, one or two years, and has little impact on the final value.
However, observe the company: 1. Whether it has outperformed the industry, 2. Whether it has a good response; 3. Whether it has even planned for a rainy day. It is not enough to see whether the company is really that good or not.
When the economy is bad, it is a good time to look at the company’s business model. Generally speaking, a company with a good business model may be affected by the general environment as well as its income, but its profits and balance sheets will be less affected by the general environment, which is the so-called winter. Ability to be strong.
Looking at P&L, it can still make money if others are not affected by the big environment, and it can make less money when others lose a lot of money. Looking at the balance sheet, others are almost out of money, and it is still rich.
@雪山gave an example [If it is Maotai or Tencent, even if the demand drops by 20-30%, he is still very profitable, but COSTCO is about to suffer serious losses, and the real estate is already in crisis. 】
In general, companies with better business models are less affected by the environment.
We don’t need to spend too much time thinking about how the future economy will be, let Ren Zhengfei worry about it, we don’t need to spend time and brains on it, the biggest advantage of the secondary market compared to the industry is that you can apply oil to the soles of your feet at any time.
Let’s just look at the present. In the current economy, whether the companies you liked in the past use the above method to evaluate whether you still like them, and whether the companies you already hold use the above methods to still want to hold them. This is what you need to do now. do things.
There is an exception for a friend. If you are very pessimistic that the economy will not work anymore, please buy Yu’e Bao instead of investing in stocks.
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