Nine points of courage, one point of luck, my 2022 summary

$China Ping An(SH601318)$ $China Taiping(00966)$ $New China Insurance(01336)$

(one)

This year’s account has generally increased by about ten points. These ten points are not earned, but newly added investment.

From 2017 to now, the overall profit is 50%, but in 2017, the account doubled, so since 2018, the floating loss has been a bit large. For the first 5 years of investment, the annual compound interest return is 15 points. For the first 15 years of investment, the annual compound return is still 15 points. For the first 20 years of investment, the annual compound return is still 15 points.

But in the past 5 years, it has only earned 50% in 5 years. Maybe, in 2023, you will earn back what you should have earned? For long-term investment, it is of little significance to write a summary every year. Especially the wording of floating profit and floating loss is even more meaningless.

(two)

There is a proposition for stocks: decentralized or concentrated?

This year has the answer.

When Buffett talks about concentration, he is talking about the circle of competence;

But when we talk about concentration, we’re talking about hoping for luck,

Buffett can choose reliable management, can we? The management is changed tomorrow, and we basically only find out tomorrow. The new management, can you judge his ability and morality next year? cannot. So, how can we say that the management is trustworthy?

In addition, how many industries have been subverted in an instant this year? People in the industry can’t figure out policy matters, and it’s even more difficult for investors. Many years ago, I had a road-crazy friend. It was indescribable to go out in his car. At that time, there was no navigation, and when he arrived at the intersection, he would feel that it was okay to go left; it was okay to go right; it was also okay to go straight. His driving route can never be predicted. Schrödinger’s cat has only two possibilities, and his car is at an intersection, there are three.

Ordinary people look at policies, and look at those policies that may cause 50% or even 90% of the market value of an industry to disappear overnight. Some people will say, what do you expect from the policy. In fact, I hope that the policy is not so good. If you concentrate in one company, then there is a problem with your concentration, and if you concentrate in one industry, then there is still a problem with your concentration. If you invest for a long time, you will always encounter small probabilities and, sometimes, suddenly, what should you do if the small probability is no longer a small probability?

(three)

To diversify investment, I had a misunderstanding before, which was to hand it over to index funds.

Over the years, I made a big mistake. I always recommend buying index funds. I was wrong! Investing in index funds may have expired! In recent years, index funds have been seriously distorted. For example, the Shanghai Composite Index has been 3,000 points for a long time. The main reason is that the new stocks that are constantly included in the speculation have lost about 4% of the index increase every year; for example, Hong Kong stocks have been overestimated after 2019. The successors of domestic real estate stocks and Chinese concept stocks made the returns of H-share ETFs extremely poor; for example, the CSI 300 was included in the index after the historical high prices of companies such as Ningde era; for example, Tesla was included in the S&P 500 index after its surge.

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This year, I bought some index funds. After the prices of these index funds collapsed.

In order to diversify, my plan is that in the next 5 years, 3-4 industries, more than 10 stocks (including index funds) will be allocated 20%, which is the upper limit of a stock

(Four)

I discussed a buying strategy in the past two years, and I called them respectively: the one-hammer buying method; the five-step buying method. If a company is worth 10 yuan, the one-hammer buying method is to buy in one go at 6 yuan , Full position, sleep five-step buying method, buy from 8 yuan, buy once every 1 yuan down, and the final average is about 6 yuan. It’s not wrong, why is it not 4 yuan to buy, but 6 yuan?

(Fives)

The bull-bear mirror image does not hold true in A shares.

A-shares that many people think are underperforming, in fact, have an average valuation 50% higher than H-shares!

In fact, the 3000-point iron bottom is always supported by an invisible hand

The Hong Kong stock market is a typical bull-bear mirror image. What is Mad Cow? In 2006, the stock market was at 2,000 points. In fact, the valuation was already reasonable, but when it rose to 6,000 points, it was a mad bull. In 2015, the 2000-point GEM was overestimated a lot, but when it rose to 4000 points, this is mad bull

What is a mirror image? That is, when it rises, the stock can completely lose its own value. Then, when it falls, it can also become penniless waste paper.

Mad Bull’s operation is that there are always stocks to sell, and the stocks must be sold out in the bull market

Polar Bear’s operation is to always have money to buy, and it must be a step-by-step process. When I bought Tencent, I bought it from 300 to 200. I only bought 3 times, and I only bought 700 shares, because I was too optimistic. When I could really get a big bucket of gold, I only had a little bit of silver. I bought a lesson in loneliness:

Big bears and big bulls are hard to come by.

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(six)
for 2023

My best wishes are that China’s economy will recover substantially and keep going upwards,

Per capita income recovered sharply and increased rapidly,

This is the basis of investing in the stock market.

I believe that in this era, there are still dividends

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