Buffett said: I am fearful when others are greedy, and greedy when others are fearful.
The deep meaning behind Buffett’s words is that investing requires people to give up and go in the opposite direction.
The reason is very simple, because when the market is hot, the stock market is rising, everyone is easy to make money, and everyone is greedy and flocking to buy stocks, it is often at a high valuation and a high level of serious bubbles, and it is necessary to be afraid when others are greedy.
When the market is in a downturn, everyone is afraid to invest because they lose money, and they are very afraid of the stock market. At this time, the valuation is often cheap, and the stock price is also at a low level. It is time to overcome the inner fear and buy and invest bravely and greedily.
Why only a few people can make big money in stock market investment is destined, because after seeing others make money, when most people buy with greed, they are often at the high level of the overvalued area.
Only a few buyers who dare to buy low in the undervalued area can make big money in the stock market.
The above is the historical trend chart of the rolling price-earnings ratio of A shares. Looking back at the historical bottom of the bear market A shares at the end of 2008, the lowest was 12.7 times. From the perspective of historical valuation, the current valuation is in the historical bottom range.
Although we can’t be sure that this is the lowest point, but from the point of view of the value of the betting rate, the downward space is very small, and the upward space is very large.
The bull-bear cycle of the stock market is like the climate and temperature cycle throughout the year. We cannot predict which day the lowest temperature will appear each year, but we can roughly determine which region the lowest temperature will appear in based on the 24 solar terms.
The A-share market has been established for more than 30 years. If we connect the annual lows into a bottom moving average, then this moving average is the 20-year line, and it is currently near the bottom moving average.
In fact, every bottom is produced in extreme pessimism. Take the last bottom at the end of 2018 as an example. At that time, everyone was generally more pessimistic.
If you have spare money now and want to invest, then the downturn is a better investment time to overcome the fear of others abandoning me. Choose those high-quality companies, wait patiently, and believe that there will be good harvests in a few years.
If you are not confident in your stock picking and trading skills, you can also consider a more reliable fund.
There is a specialization in the surgery industry. Here, I have the cheek to recommend my $Shanghai Snowbo Woo Niu No. 1 (P000770)$ fund. Although my work is not particularly good, I will continue to work hard.
Finally, I would like to say that when investing in stocks, try to use spare money to invest, and do not borrow money to raise money in a hurry. Winter is very cold, but the coldest winter is over, is spring still far away?
@Today’s topic $ through the bull and bear (ZH141793) $
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