Write conservatively to avoid being criticized again.
Making ten times your money in a bull market sounds simple, but it’s quite difficult for most people. For example, from 2005 to 2007, the index rose over six times, and just buying any main line stock could earn you ten times; from 2013 to 2015, the index rose again by seven times, and buying a ChiNext stock could also earn you ten times. But very few actually achieve this. Why? Because you need to have reverse thinking and a calm mindset.
Some people make money in A-shares by choosing small-cap, financially stable new stocks and recent stocks. If luck is on their side, they might find a big winner. Alternatively, buying ST stocks could work; although this method may not be effective later, small-cap stocks with low valuations and good financial data will generally rise in a bull market. This strategy is simple but requires determination.
To make big money, aside from having determination, you also need to see the big picture clearly and think in reverse. For example, back in 2013, I said the ChiNext market would rise significantly, and in 2017, I said the Shanghai 50 would enter a bull market. Many people opposed me at that time. To make big money, you must see opportunities when others are not optimistic.
For example, last year marked the starting point of a bull market for the Shanghai 50. If you were right about the direction, earning 50% to 100% in a year is very easy. Next, if the Shanghai 50 rises from 3000 points to 4500 points, that’s a 50% increase, and you don’t have to significantly outperform the market during this time. If you choose the right direction, you can still achieve a 50% to 100% return. For small investments, beating the 50 index is easier; you just need to see which sector of the 50 constituent stocks breaks out and act decisively; achieving 50% returns is possible.
True excess returns occur in years like 2007 and 2015. At that time, everyone started talking about stocks, and the index broke through after consolidating near historical highs. This is when you should decisively leverage. If you're being conservative, just leverage one time. During this phase, the index may rise 2 to 3 times, with the market divided into two segments; in the first segment, many individual stocks may triple, while in the second segment, many stocks may double. At this time, avoid hiding in the bottom stocks; during the craziest times in a bull market, technical analysis is most effective, so just chase the main line. Even if you know nothing, as long as you leverage the index, you can still earn good returns. If you have some stock-picking ability, your returns will be even more impressive.
But saying it is easy, doing it is hard. You need to identify the bull market early and maintain your belief in it. When everyone starts to believe in the bull market, you need to identify the main line, be willing to chase the highs, dare to leverage, and hold onto the main line. Finally, when everyone is making money frantically, and you feel invincible, remember to pay attention to when the main line stocks break their trend and then completely liquidate. The most frightening thing is that many people increase their leverage after making money; leverage is a friend at low points, but at high points, it becomes the most terrifying psychological demon.
Overall, the A-shares have given many people the opportunity to turn things around. Without significant fluctuations, there is no possibility of a turnaround. So, don't complain about A-shares being bad; you need to seize the opportunity to make big money in a bull market.
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