What's the biggest bet you've ever made?

The biggest bet I ever made was because I dreamed that the stock market could easily make people rich overnight.

The reality is not that simple. I started stock trading in 2011 and invested tens of thousands of dollars in it, hoping to double my earnings. However, due to my lack of experience as a newbie, I paid a lot of "tuition fees." , and also learned some lessons.

First of all, I chose the wrong time to enter the market; stock trading requires buying low and selling high. Because of my lack of experience, I entered the stock market during the economic downturn and caught up with the brutal decline in the second half, which was equivalent to copying when I entered the market. Halfway up the mountainside.

In order to control inflation, the central bank continuously raised reserve requirements and interest rates. The CPI only reached a high point in August. After the CPI fell year-on-year for three consecutive months from September to November, the central bank lowered the required reserve ratio for the first time. At the end of the year, stock indexes continued to fall due to financial constraints. Therefore, the best time to enter the market is to enter during the economic bottom-recovery-prosperity cycle, rather than during the peak-downturn-depression period.

Secondly, stock trading lacks the necessary patience, is impetuous, and dreams of getting rich overnight. The lack of patience can be seen from two points. First, the lack of patience to hold shares. Logically speaking, when I first entered the market, I happened to be at the starting point of a small band. I bought Vanke, Yonghui Supermarket, Longping Hi-Tech, and Kangmei Pharmaceutical in this small band. They all have a profit of at least 10%, but they are impatient. They rush to exchange stocks after making a little profit or losing a little. Frequent stock exchanges lead to missing out on this market trend.

The second is to be impetuous and try to get rich overnight. Without experience, they invest large sums of money into the market. Without technology, they engage in short-term competition, and even chase theme stocks and chase the price limit. Resulting in small profits and big losses. Half of my losses at that time were caused by chasing Shaanxi Guotou and Qiulin Group's daily limit.

Again, I didn’t choose the right stocks; I used to think that when choosing stocks, I always choose stocks with good performance and low price-to-earnings ratios. For example, airline stocks, financial and real estate stocks had good earnings per share in 2011, but their price-to-earnings ratios were very low. , but these stocks fell again and again.

In fact, if you think about it, when the performance is good and the price-to-earnings ratio is low, it means that the company has reached its best period, and the market makers are taking advantage of the good times to ship goods at this time. It is the rule to go from prosperity to decline. . On the contrary, those companies whose performance has fallen to the bottom have poor earnings per share and high price-to-earnings ratios, and retail investors dare not touch them. The market makers just build positions at this time, waiting for the opportunity for a rebound in performance.

Therefore, the iron rule of investment is that when an industry is at its lowest, one of the best times to select stocks is when the company's performance hits rock bottom. Stock selection also needs to be at a low enough price. The stock price is low enough so that there is a lot of room for improvement. It is best if the stock price drops by 60-70% at the highest point and the price-to-book ratio is between 1-1.2.

Buying China Southern Airlines made me lose the other half of my losses. The reason for buying China Southern Airlines at that time was its good performance in 2011, low price-to-earnings ratio, and the expectation of RMB appreciation. However, I did not expect the benefit of China Southern Airlines’ quarterly earnings forecast. However, it started to fall sharply. When the performance is good, it is a bad start. The appreciation of the RMB has reached a certain level. It cannot continue to rise. Things must reverse when they reach the extreme. These lessons must be learned.

The factors that need to be considered when selecting stocks are industries supported by national policies and companies that have a lot of room for development in the future. Do not choose companies that are subject to policy restrictions and objective conditions, such as the automobile industry, which in 2011 Suppressed by the national purchase restriction policy in 2017, the aviation industry is not optimistic about the future. The aviation industry is affected by the downturn in oil prices and international routes, and the future is not optimistic either.

The last is the priority order of the above experience considerations. Mentality is the key, it is internal strength. Only with good internal strength can you master good technology and implement stock trading strategies well. A good mentality lies in being patient and not being impetuous.

Then you need to seize the right opportunity to enter the market, when the economy bottoms out; then you have to choose good stocks. When choosing stocks, you must consider performance and stock prices. When the stock price drops to the bottom, you must also consider whether it is affected by national policies. support.