The value of long-term investments

Yesterday, the stock market rose for a day, and today it plunged again, and it completely covered yesterday’s gains. The glimmer of light that investors finally saw fell silent again.

Looking at the domestic and international environment, Lao Maozi and Ukraine are engaged, the sweater war between China and the United States, the rapid devaluation of the RMB, and the outbreak of epidemics one after another.

So what can we do now? Should you fight or flee?

In his “Letter to Shareholders”, Warren Buffett said that he had experienced the Cuban Missile Crisis, the Vietnam War, the assassination of the President, the inflation of the 1980s, the 9/11 terrorist attacks, the oil crisis, and later the 2008 financial crisis… these Everything seemed fatal at the time, but in the end the economy returned to normal.

If you look forward, there were two world wars and the Great Depression in 1929. It seems that the world economy will fluctuate violently every few years. But as long as there is enough time, human beings will automatically correct their mistakes, and the final results are still good. .

If you are confused or even disappointed about the future economy, I suggest you read “Civilization, Modernization, Value Investment and China” by Li Lu.

In fact, at any time, there will be bad factors in the economy. At that time, we will feel very confused, but in the past period, we will find that it is not that difficult.

Just like the Internet bubble in 2000, the financial crisis in 2008, and the deleveraging in 2015, when the broader market fell to the limit, 3,000 stocks fell to the limit. Looking back now, both domestic and foreign stock markets have actually hit a record high. reached a new high. Even at its 2008 high, the CSI 300 index surpassed a bit last year, although it has since fallen back. Therefore, the law of historical development must be constantly creating new highs.

Specific to the few stocks I hold for a long time, what are the returns?

Because there is no detailed record of transaction data before 2015, we use 2015 as a starting point to calculate the yield (the following are the first investments on record, and the actual first investment is earlier than these times).

The first stock is Gree Electric Appliances, which everyone spurned. Gree Electric Appliances bought it for the first time in 2015 at 20-22 yuan, and bought it four times in total. Later, it was overfilled at the price of 16 yuan in October. For one lump sum, the dividends will be 1.5 yuan in 2016, 1.8 yuan in 2017, no dividends in 2018, 0.6 yuan and 1.5 yuan in 2019, 1.2 yuan and 1.0 yuan in 2020, 3 yuan and 1 yuan in 2021, and 2022. The dividend is 2 yuan, and the cumulative dividend for 7 years is 13.6 yuan. The cost of removing the dividend is about 7.4 yuan, and the current stock price is 33 yuan. Have you found that Gree Electric is not as bad as everyone thinks.

The second stock is China Ping An, which everyone hates. China Ping An bought it for the first time in 2015 at a price of 45 yuan (close to the highest point at the time). Dividends in the year were 0.18 yuan and 0.35 yuan, 0.2 yuan and 0.55 yuan in 2016, 0.5 yuan and 1 yuan in 2017, 0.62 yuan and 1.1 yuan in 2018, 0.75 yuan and 1.3 yuan in 2019, and 0.8 yuan and 1.4 yuan in 2020. In 2021, the dividends will be 0.88 yuan and 1.5 yuan, and the cumulative dividends will be 11.13 yuan in 7 years. The cost after removing the dividends is about 34 yuan, and the current stock price is 42 yuan.

The third stock is Vanke A, which everyone tries to avoid. The first purchase was 14.75 yuan in 2015, 0.72 yuan in 2016, 0.79 yuan in 2017, 0.9 yuan in 2018, 1.05 yuan in 2019, 2020 The annual dividend is 1.02 yuan, the dividend in 2021 is 1.25 yuan, the dividend in 2022 is 0.98 yuan, and the cumulative dividend in 7 years is 6.71 yuan. The cost of removing the dividend is about 8.04 yuan, and the current stock price is 17.46 yuan.

The fourth stock is China Merchants Bank, which everyone should not step on. The first purchase was 14.3 yuan in August 2015, and the dividend was 0.69 yuan in 2016, 0.74 yuan in 2017, 0.84 yuan in 2018, and 2019. Dividend 0.94 yuan, dividends of 1.2 yuan in 2020, 1.253 yuan in 2021, 1.522 yuan in 2022, 7.185 yuan in cumulative dividends over 7 years, the cost of removing dividends is about 7.11 yuan, and the current stock price is 33.67 yuan.

The fifth stock is Wanhua Chemical, which is not familiar to everyone. The first purchase was 28.42 yuan in April 2017, and the dividend was 0.5 yuan in 2017 (10 get 2 shares), 1.5 yuan in 2018, and 2019 dividends 2 yuan, dividends of 1.3 yuan in 2020, 1.3 yuan in 2021, 2.5 yuan in 2022, 10.82 yuan in 6 years, the cost of removing the dividends is about 14.7 yuan, and the current stock price is 87 yuan.

The sixth stock is Weixing New Materials that everyone looks down on. The first purchase was 16.32 yuan in October 2016, and the dividend was 0.6 yuan in 2017 (10 to 3 shares) and 0.6 yuan in 2018 (10 to 3 shares). ), dividends of 0.6 yuan in 2019 (10 to 3 shares), 0.5 yuan in 2020, 0.5 yuan in 2021, 0.5 yuan in 2022, 2.197 shares in 2016, and a cumulative dividend of 5.69 in 6 years Yuan, the cost of excluding dividends is about 4.84 yuan, and the current stock price is 19.32 yuan.

Therefore, if you choose a good stock and hold it for a long time, the probability of loss is extremely low, and the rate of return is also very considerable. Wanhua Chemical and China Merchants Bank are my two most profitable stocks so far. China Merchants Bank was bought earlier (should have been bought in 2006), and Wanhua Chemical was mainly due to the increase in positions during the slump at the end of 2018. many.

Going back to the question at the beginning, you only need to answer these questions:

1. Will the economy continue to slump and not recover?

2. Will the above companies go out of business and no longer exist? (Or answer if China’s stock market is closed and no longer open)

3. Are the historical dividends of the above companies no longer being distributed or shrinking?

If the above three answers are all negative, then time is on our side. In 5, 7, 10, or even 30 years, our costs will be lower and lower, and the dividends will be higher and higher. The higher the profit, the higher the profit.

$ China Merchants Bank (SH600036)$ $ Vanke A (SZ000002)$ $ Gree Electric Appliances (SZ000651)$

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