There is a saying on Wall Street: "Whether the stock price will rise or fall tomorrow, only two people in the world know, one is God, and the other is a liar." In reality, many stock analysts often do one thing, is to predict the rise and fall of the stock market. Although they are often slapped in the face by the market, they also have their own coping strategies: bragging when the prediction is correct, and keeping silent when the prediction is wrong. However, when the stock analysts make a wrong prediction, they lose only a little reputation, while when the stockholders make a wrong prediction, they lose real money. In stock investment, we may be able to accurately predict that the stock price will continue to fluctuate, but we cannot know for sure whether the price will fluctuate up or down next year. Therefore, you do not need to correctly guess the future trend of the short-term market. The key issue is that you have to buy the right company's stock. In today's Chinese stock market, especially in the bull market, thousands of people flock in, but few people outperform the market and share the rich fruits brought by the surge in stock indexes. What is the reason? This is because humans are born with a desire to predict the future, which hinders investors' rational decision-making. They are always thinking about how to make a profit in the stock market, and spend a lot of time every day looking for tomorrow's bull stocks and predicting market conditions. Many of them draw stock price charts on their computers, trying to predict the possible breakthrough point of stock price tomorrow. Moreover, in the investment market, many people believe in the forecasts of securities analysts and use these forecasts as an important basis for their investment decisions.
However, many securities analysts are affiliated with securities companies, and the survival of securities branches depends on the trading volume of stocks. Therefore, in order to increase turnover, they will artificially create some stock price fluctuations. In fact, predicting the future of listed companies and the direction of the stock market is just like predicting the weather, which is impossible to be accurate. If we only predict the next quarter of a listed company, then as long as the seasonal factors are eliminated, the sales and profits of the next quarter are likely to be similar to those of this quarter. However, if the prediction is extended to the stock price trend of this listed company, in addition to seasonal factors, there are many other factors that affect the stock price trend, because the stock market system is a comprehensive reflection of many variables, and the change of one variable will also interact with other variables to affect the overall market trend, and then affect the trend of individual stocks. If the market can be predicted, who predicted the sharp drop in the Chinese A-share market on February 27, 2007? Following the sharp drop in the Chinese stock market on "Black Tuesday" on February 27, the Dow Jones Index in the United States also fell by 400 points, a drop of 3.29%. Other emerging market stock markets fell by 3% to 7% after opening. The stock indexes of major stock markets in Europe and Japan also fell sharply. Investors who are used to making predictions could never have imagined that when the Chinese stock market was experiencing a bear market for many years and market participants were not optimistic, the Chinese stock market ushered in the largest bull market in history, and the Shanghai Composite Index continued to advance. No wonder some people exclaimed: "When the Chinese stock market sneezes, the world stock market will catch a cold!" This has made an unprecedented subversion of the original saying "When the US economy sneezes, the world economy will catch a cold." In today's Chinese bull market, all the drawbacks of predictions have been covered up by the stock market boom and irrationality. As stock prices rise higher and higher, investors pay more and more attention to short-term profits. As long as the profit estimate is raised, the stock of the company that is expected to fail to achieve the profit target will be sold, and the market will eventually collapse in a false bubble. Therefore, investors must not be misled by all kinds of beautiful predictions. Once they use the mindset of short-term profit to decide their investment behavior, they will definitely go with the flow in the ocean of predictions, and their investment will immediately turn from rational to speculative.If the only purpose of investment is to make a profit, investors will no longer be able to see the relationship between price and value, so they will buy stocks at any price at will and treat investment with a selfish attitude. However, although the future is unpredictable, one thing is certain, that is, the stocks of excellent companies will eventually reflect their investment value in the stock price. In this sense, the future is predictable. Therefore, what stock investors have to do is to choose the stocks of excellent companies, hold them patiently, and not be swayed by short-term forecasts, so as to share the feast of the stock market.
Why do people still try to make accurate predictions about the future? This may be due to the deep desire of the human soul to control the future and the arrogance of people's self-awareness. In order to avoid predictive errors, the best way is to avoid predictions as much as possible. If you have to make predictions, the effective way is to control the uncertainty within a relatively certain range. This is how investment guru Buffett "predicts the market". He believes that the degree of intelligence of a certain organism or individual is proportional to the accuracy and time span of its predictions. Before the prediction of the financial market becomes a science, it is best to focus on extending the time span - making long-term predictions and ignoring short-term fluctuations. Investment guru Granville was able to influence the market with his own power in the early 1980s. At 6:30 p.m. on January 6, 1981, he sent a message to his 3,000 investment clients around the world, "Clear all stocks - sell them all." The next morning, the securities companies were flooded with sell orders, and the Dow Jones Industrial Average fell 24 points, equivalent to a book loss of approximately US$40 billion. In April of the previous year, Granville's buy orders had caused the Dow Jones Industrial Average to rise by 30 points. In September 1981, his sell orders nearly caused a global financial panic. This shows how complacent he was at that time! The public loved Granville like a rock star, and his lecture tours were always overbooked. But Granville soon showed signs of defeat. He once warned his clients that the stock market would be in trouble. When the Dow reached 800 points, he told his clients that the stock market was collapsing and that investors should not only sell their holdings but also sell short to take profits before the financial doomsday. As a result, the stock market stood at 1,200 points. In 1984, he once again warned his dwindling number of clients that "the bull market is just a bubble phenomenon" and that a crash was coming. His followers therefore lost the bull market of the 1980s, and his status as a stock market prophet who could call the shots was gone forever. When investors invest in the stock market, forecasts can be their reference, but when actually trading, they must be guided by investment principles. The investment principles of value investors mainly depend on stock valuations, future growth potential of listed companies and operating risks.In actual operation, we should follow the principle of "be aware of the possibility of being trapped when buying, and leave some money for others to earn when selling", so the stock price and market trend and other related forecasts can only be used as references when trading. Soros once mentioned his reflection theory that people are fallible. The so-called fallibility refers to the fact that certain ideas or judgment criteria that people are accustomed to using often make mistakes. For example, when we make very logical predictions and deduce the results, when we apply this result to actual trading actions, in the end, we often find that the actual development trend of the market is far from our predictions. Based on this, Soros believes that people are prone to making mistakes in market predictions, and the accumulation of each individual's mistakes together causes market errors. Because Soros realized this, he himself never predicted the market development in his investment experience, but always waited quietly until he thought that the good time for investment came and then acted quietly. He said that there is no need to predict, and when the market opportunity is approaching, take the initiative to guide the market. In fact, stock market predictions may only constitute one of our many reference materials. Digesting this information is more important and more difficult for investors. When using external information to correct your own judgment, you need to be careful of some misunderstandings. First, don't let prejudice control our brains. Our brains often habitually filter out those opinions that we disagree with, leaving only those that are consistent with our own opinions. However, when it comes to investment, it doesn't make much sense to blindly look for opinions that confirm your own views. If your own opinions are wrong, it's useless to confirm them. Second, be vigilant about consistent predictions because a lot of practical experience has shown that when investors invest collectively, it is often when a crisis is about to come. Third, treat prediction errors calmly. The future is difficult to predict and there is a lot of uncertainty. In the field of prediction, mistakes are always inevitable. What we can do is to correct our attitude towards it.
