At the end of the September 27 article, there was a message from a reader:
"It's rare to see Dao Ge so confidently bullish on a market. In two or three months, if the A-share market falls back below 3,000 points, I will buy some CSI 300 ETF to follow Dao Ge's steps."
This message makes me very worried.
Let me first state my conclusion:
First of all, I would like to thank this reader very much for his trust.
However, I strongly recommend this reader and readers with similar attitudes not to buy A-shares or the CSI 300 ETF. No matter how much the A-shares rise or fall in this round, do not enter the market. However, you can carefully observe the market trends in the future, and then compare the market trends with your previous ideas to see if there is anything you can learn from and absorb in this process.
In my article on the 26th, I wrote about the attitudes of five types of participants towards A-shares:
The first four categories are as follows:
The first type is those who have completely given up on A-shares and don’t care about them regardless of whether they are good or bad.
The second type, because of this sudden major change, instantly rekindled hope for A-shares, began to pay attention to A-shares, and were ready to enter the market at any time.
The third category is that no matter what the market will be like in the future, there will probably be a good market trend in the next few days, so hurry in and take advantage of it.
The fourth type is treating the symptoms but not the root cause, so just stop while you are ahead.
The fifth category, which I wrote specifically for, is "people who sincerely believe that there will be this wave of market trends."
Obviously this reader is not the fifth category, but the second category.
And to be more specific, it is because "it is rare to see Dao Ge so confidently bullish on a market", and (I guess) coupled with the good market conditions in recent days, his hope for A-shares has been rekindled.
If such investors participate in this round of market now, even if the next round is a bull market, the outcome is what I have described in the article:
"The probability is still losing money."
Why am I so sure?
Because this kind of participation is not based on the heartfelt belief that there will be a market, there is a high probability that there is no logic and ideas to deal with the subsequent trends.
This kind of participation is obviously not the result of independent thinking but rather copying homework.
In investment, you must never copy others' homework. This is the truth that "one man's meat is another man's poison".
We all know that Mr. Buffett made a fortune by buying PetroChina, right? But what about those Chinese stock investors who followed Mr. Buffett and copied his homework? What was the final outcome?
We all know that the old man bought Coca-Cola and Wells Fargo and held them for a long time, right? But how many people followed the old man's example and bought these two stocks and held them for a long time and made money?
Why can’t I copy homework?
Because the person who copied the homework essentially does not have a deep understanding of the subject, does not know where the value is, and does not know where the risk is, so he does not know why it will rise, let alone why it will fall. Therefore, he often cannot buy at the right point, let alone sell at the right point.
Some people would say:
Then is it okay to copy the buying and selling points as well?
It's okay to say that, but when the market really reaches a buying point or a selling point, such investors almost 100% fail to follow the rules.
When the price really falls to the buying point, he will think: it will definitely continue to fall, don’t buy it first... and then he will miss the buying point perfectly; when the price really rises to the selling point, he will think: it will definitely continue to rise, don’t sell it first... and then he will miss the selling point perfectly again.
Then, we entered into a vicious cycle of losses.
If you do not agree with an investment product from the bottom of your heart, but only agree with it because someone you trust says it is good, then no matter how good the investment product is, it is just someone else's honey and has nothing to do with you.
Among the well-known investors in China this year, I have focused on three people: Lin Yuan, Dan Bin and Duan Yongping.
I have watched a lot of videos about Lin Yuan and Duan Yongping, but unfortunately I have not found any investment monographs published by them, so I regret that I cannot literally learn from these two seniors.
As for Dan Bin, I was fortunate enough to read his "The Rose of Time".
Whether watching videos or reading texts, I have benefited a lot from the experiences of these three predecessors.
The three predecessors all held a very well-known target in A-shares, and all made huge profits from this target: Moutai.
In particular, Dan Bin explained in great detail the reasons and logic behind his purchase of Moutai in his book The Rose of Time. I think this is the most detailed and profound description of Moutai's investment logic so far.
What I have benefited a lot from the three predecessors is not how good Moutai stock is, whether it is worth buying, or whether the current price is appropriate to buy, but how they can find such stocks in the big melting pot of A-shares, how they evaluate the value of Moutai, and where they get the courage to hold an A-share for a long time?
But despite this, after learning from their experience, I still have no interest in Moutai stock. Even when Moutai's stock price plummeted some time ago, I never thought about buying Moutai.
It’s not that Moutai is bad, but I feel that I still don’t understand this stock enough.
Therefore, you cannot copy others’ work when investing.
What we need to learn is not what others bought or sold, but why they bought and sold.