Let me tell you the story of the two big bosses. At the beginning, I was optimistic about the representative of new economy, Xiaomi, and Boss Lei said that investors would double their money. The first big boss did a 2x leverage in 2018 and spent 5% of his money on Xiaomi, it immediately gained about 30% as the profit at the beginning, but the stock price began to drop rapidly within a few days. In the end, Xiaomi was at 50% of the original price, and the first big boss's position was liquidated, the assets were zeroed, and he lost a large amount of money. If there is no liquidation, as of today, with the continuous high increment of Xiaomi's stock price, this investment should have already exceeded 9 digits of profit rate.
Another big man has been paying attention to Tesla since 2016. He has decided to invest in Tesla stocks and has always held Tesla stocks. Even the first time Tesla rose to around 1,000 last year, it fell back to 400 afterwards. The big man continued to increase positions without leverage, and as of the end of August, the profit rate has reached 1000%+. If you used leverage to buy stocks, even if it was only 0.5 times leverage, the investment would have already zeroed!
So from these two stories I have summarized a formula: good investment = good target + good price + no leverage
So how to judge whether a target price is good or not? (Short-term holders have their ways to determine the target, which we will not discuss here). What we are going to discuss is the black swan buying method of long-term investors. Just keep a long-term focus on the good targets you have selected. There will always be some good targets that will encounter black swan events. The price will fall into the oversold range, and many investors will panic, such as Moutai under the plasticizer restriction policy in 2008. Bitcoin, which plummeted in the first half of the 2020 epidemic, is giving investors the most comfortable opportunity to get on the ride. Such a buying opportunity has a high safe margin and high odds to profit. Many people don't understand why Buffett always holds 5-20% of cash, and what he is waiting for (with 20% of cash you can earn a lot). What he is waiting is the black swan.
There is a saying that people always overestimate the changes in one year, but underestimate the changes in three years. This is also true in the world of investment. We always overestimate one year's expectations for one thing, but underestimate the three-year results. I always think that if an investment doesn’t rise today, it won’t rise tomorrow, if it doesn’t rise this month, and it doesn’t rise next month, it’s not a good virtual currency or a good stock. If you don’t have the determination to wait for three to five years, don’t buy it; if you buy something, you decide to wait for it without any leverage; if you can’t wait for three years, you won’t be able to hold the original Bitcoin even if you did a time travel back to 2008 .
Knowing is easy and doing is hard; be a friend of time.
-- translated from http://losercointalk.org/thread?topicId=1109
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