Investing in stocks is equivalent to investing in a company. You should treat yourself as the owner of the company and use a long-term perspective to judge whether the company is worth investing. Growth dividends in the development process, rather than short-term stock trading spreads.
The existence of the stock exchange market is only for your trading transactions, so you cannot be dominated by the market. The market will not tell you the value of the stock, it will only tell you the price, and you cannot treat the market as a teacher. , You can only use it as a tool that can be used. Unfortunately, this concept is contrary to more than 95% of the people in the market, so most people who are keen on short-term trading in the market lose money.
The essence of investment is to predict the future, so a certain margin of safety must be reserved. Since the forecast cannot be 100% accurate, there must be an estimate range. Your purchase price must be much lower than the intrinsic value of the stock.
To establish your own competence circle, gain a deeper understanding and knowledge of certain industries or company stocks in your competence circle, and be able to make more accurate judgments about the company's future development than others, so that you can make arrangements in advance Heavy investment will obtain huge returns that surpass most.
The above four aspects constitute the four elements and fundamental meaning of value investment.
Buffett's 40-year transaction list
In the early years, short-term frequent-purchasing stocks of anthracite company-windmill company-railway company
In 1952, the Genesee Valley Gas Company was bought --- a total of 22,000 shares were issued; at that time, the stock's earnings per share were 5$ --- the stock price was also 5$ --- the price-to-earnings ratio was only 1 times
In 1952, it bought a Western insurance company with an earnings of 16$---the stock price was 12----20$---the price-earnings ratio was less than 1 times
In 1953, he bought shares of United Streetcar Company --- Earnings per share was 120$ --- The stock price was 45$ --- The price-to-earnings ratio was less than 1 times.
Worked for teacher Graham, the godfather of stock market in 1954
In 1955, he taught stock market courses at the 24-year-old future stock god at Scardell Adult College
In 1956, Buffett's personal assets were 140,000 US dollars at the age of 25.
In 1956, he founded the Buffett Partnership at the age of 25---starting capital, relatives and friends invested 105,000 US dollars
Purchased Dempster Manufacturing Company in 1956 --- the net book value of the stock is 72$ --- the stock price is 18$; bought for 5 years --- held 70% in June 1961 --- sold in 1963
In 1961, at the age of 31, Buffett invested his first $1 million in a windmill manufacturing company because the partnership was worth millions of dollars.
1962 bought Berkshire-Hathaway-share price 7$
In 1965, Berkshire controlled 70% of Hathaway and became chairman of the board
In 1985, I sold Berkshire --- Hathaway's textile industry - and lost a lot of money. 860,000 only sold 160,000.
In 1964, it bought 13 million U.S. dollars---5% of the stock of Express Company; two years later, the stock tripled and gained 20 million U.S. dollars in profit; the stock rose from 35$--- to 189$ in 5 years.
In 1965, the Buffett Partnership Company subscribed and made money --- the company's net assets rose from US$105,000 to US$26 million
1966.7.12 Buffett Partners invested 5 million US dollars to buy all the stocks of Hochschild-Cohen Department Store
1969.12.1 Later, the company's investment was finally sold at the original price without making money
Purchased 80% of diversified retail companies in 1966
After meeting with Walt Disney in 1966, he bought 5% of Disney's stock; invested 4 million yuan, and at the same time, sold the shares of American Express at twice the price he paid. Selling Disney in 1967 --- current price of 6 million US dollars - made a big profit at the time; but now this is Buffett's last regret - the stock would not sell at that time - the current value is 1 billion Dollar
1967.2.23-8.5 million U.S. dollars to buy stocks in the National Compensation Company and the National Fire and Maritime Insurance Company
Purchased United Retail Corporation in 1968
In 1968, gradually acquired a blue chip printing company worth 40 million US dollars
Purchased Rockford Trust Company in 1969
1969 Purchased 97% of Illinois National Trust Bank
Buyout Sun in 1969
The Sun was sold in 1981-ceased publication in 1983
Buying out Black Printing Company in 1969
In 1969, the Warren Buffett Partnership was disbanded --- 13 years --- average annual return rate of 30% --- earning 30 times in 13 years --- the bull market torrentially retreated
Monsinwell, which bought into the retail industry in 1970-the stock price was flat
In 1972, 1.3 Buffett used the blue chip printing company's cash to acquire West Iraqi Confectionery for US$25 million.
Blue Chip Printing Company acquired Wesco Financial in 1973
The U.S. stock market crashed from 1973 to 1974
Purchased $10.6 million in the spring and summer of 1973---Washington Post stock; the stock was listed in 1971. In 1973, the stock fell from 6.5 to 4 yuan in the stock split. God believes that the opportunity cannot be missed. -In 1993, the turnover of the stock was 200 million U.S. dollars; the value of the stock market was only 80 million yuan at 4 yuan. At that time, the stock god believed that the intrinsic value of the Post was 400 million yuan; later, the market value was only 400 million U.S. dollars in 1981; the stock god Buying US$10.6 million The Post continued to decline for the next two years; 10.6 million fell to US$8 million in 1974---until 1976, Berkshire bought Wesco for US$6 in 1973 Financial company; Wesco Financial Corporation rose to $120 in 1995. Buffett served as the director of the asset manager of Grinnell College in 1976
Buying AVCO's TV station in Dayton for $12.9 million bids 205 times the turnover; sold Berkshire for $50 million in 1984---Hathaway Insurance Group
GEICO government employee insurance company-GEICO almost went bankrupt in 1976, fell from 61 to 2 US dollars-the heirs of the company could not afford to commit suicide; from 1976 to the following 5 years, the stock god bought GEICO 45.7 million US dollars-the cost was after 1 get 5 free in 1992 US$1.31-----Buy all GEICO equity in 1996
In 1976, he bought K&W Products Company---Lubricant stock god, 46, owned $35 million Berkshire and $10 million in blue chip printing stocks.
Acquired Buffalo News with a blue chip printing company's cash of US$33 million in 1977; Buffalo News lost US$12 million from 1977 to 1982
In 1978, the controlling shareholder bought a diversified retail company-56% of the shares; in 1987, the diversified retail company was sold
In 1979, Wesco Financial Corporation acquired Precision Steel Company for 15 million yuan
1978-1980 Stock God sold the Metropolis for $43
In 1982, the company bought 45 million US dollars in the stock of the era-the year-end value of 79 million US dollars; sold all in 1986
Joint Publishing Company sold in 1986
Buffett’s sole proprietorship in 1983---Buffalo News
Controlled 60% of the blue chip printing company in 1983
The sales revenue of the Blue Chip Printing Company fell from US$124 million in 1970 to US$9 million in 1982---US$300,000 in 1993
In 1993, the market value of the blue-chip printing company's stock price rose to $1 billion
1983 Bid 55 million U.S. dollars to buy 80% of Nebraska's large furniture store
1983-1984 purchased WPPSS bonds for 139 million US dollars-providing 16.3% tax-free income
In March 1985, it bought 3 million shares of Metropolis for US$517.5 million-the stock price was US$172.5
Purchased in 1986---$315 million Scott-Fetzer Company--and owns the company's World Books---Kirby Company---Douglas Company--Cleveland's Timber Management Department
1986.6 Purchased 84% of Fechheimer Uniform's shares and invested 46 million U.S. dollars
1986 invested 23.7 million to buy 50% of NHP shares --- apartment rental
1990 sold --- earn 50% --- 35 million sold
1987.8 bought 863,550 shares of the torch trademark---insurance industry
The big stock market crash in 1987-Berkshire's stock price fell from 4,000 yuan per share to 3,000 $ per share within a few days
1987.9.28 Purchased 700 million U.S. dollars of Solomon Securities preferred stock-dividend 9%
When the stock god bought Solomon's preferred stock-the common stock was trading at $31-87 shares fell to $ 16
In late 1988 and early 1989, it took a few months to secretly place an order
1989.3.15 bought 6.3% of Coca-Cola's stock of 1 billion U.S. dollars - 23.35 million shares
1990 Coke 1 Free 2-Hold 46.7 million shares
1992 Coke 1 get 2 free holding 93.4 million shares
In 1994, additional investment holding 8%-Coke's largest shareholder-holding 100 million shares
In 1996, Coke held 200 million shares after splitting and splitting 2.
1989.2 bought 80% of Bosham Company---jewellery industry
1989.9.21 Buffett issued non-coupon coupons-raising 400 million US dollars
In July 1989, it invested 600 million yuan to buy preferred stock of Gillette Blade, which was converted into 11% common stock.
1989.8.7 Invested 358 million to buy the preferred stock of American airlines USAIR---dividends of 9.25%---investment is a failure, the stock god said-do not invest in airline stock preferred stocks
1989.12.6 Purchased 300 million U.S. dollars of preferred shares of international companies-forest products-bonus 8%
1989---1990 bought RJR bonds for 440 million US dollars
Purchased 20% of PS Group in 1990---32$ per share---P/E ratio of more than 50 at the time of purchase---Aircraft leasing industry---Tourism industry-Investment failures and bankruptcy
1991.6.10 Purchased H.H Brown Footwear
1991 Purchased 40,000 shares of First Empire Group's 40 million preferred shares-dividend 9%
1991.8.1 Purchased 300 million U.S. dollars preferred shares of American Express---8.85% dividend
1995.2.14 Owns 9.8% of the common stock of American Express - 48.5 million shares or 1.6 billion US dollars
In 1995, it increased to 10.1% of the ordinary shares of Express-49,456,900 shares
1992 Brown Holdings Lowell Footwear
Owned more than 1 billion WPPSS and ACF bonds in 1992
1993 increased holdings of Solomon Securities to 24.99%
Purchased Dexter Footwear on September 30, 1993
In 1993, the stock god sold 1 million shares of Metropolis for $630.
At the end of 1994, the stock rose to $852.5---a loss of $225 million
1994Buy into the Herzberg Diamond Shop
Purchased 4.9 million shares of McDonald's in 1994; McDonald's went public in 1965-100 original shares worth US$2250
In 1994, after 11 times of stock splitting, 100 shares of McDonald's became 27,180 shares --- 100 shares in 1965 were worth US$1 million in 94
Purchased 20 million shares of Metropolis in 1995 worth US$2.5 billion
On July 31, 1995, Metropolis and Disney merged
1996.3.7 bought 3.5% of Disney's stock
1995.5.24 Purchased R.C. Wiley Home Furniture Company
In 1988, the stock god bought 7.2 million shares of Freddie Mac-a residential mortgage-cost 71.7 million US dollars-the stock fell by two-thirds of its share price in 1990
1990.10.24 buy 10% of Weiersfago-banking industry-the stock market earnings ratio is only 3.7 times the stock fell from 86 to 41.25 in 90 years-stock god cost 58$-1995 rose Up to 200$
1991 Guinness bought 31.2 million shares of Guinness---one of the largest brewing companies at a cost of $265 million
Masukura to $333 million in 1992-2%-cost 3.33-market value 2.99-loss-making investment
1992.7.23 Purchased General Dynamics for $312 million-Defense Industry Contracting
In 1994, 1 split 2 shares held 8.7 million shares ---accounting for 15% --- the largest shareholder ---produced F16 --- the company is repurchasing its own shares
In 1993, it bought 5% of UST Tobacco. In 1993, at the age of 63, he sold 10 million Capital City shares for $63 per share. Unfortunately, by the end of 1994, the company's stock price became $85.25. Increase holdings of Coca-Cola and American Express.
1994 bought 952,700 shares of Bristol-Myers Squibb Pharmaceuticals - 0.2% --- under repurchase
In 1995, at the age of 65, acquired the Helzberg Diamond Company (Helzberg) and the Willy Furniture Company (R.C.Willey); bought the remaining equity of the government employee insurance company.
In 1996, at the age of 66, Berkshire Hathaway merged with International FeiAn by issuing new shares.
In 1997, at the age of 67, he bought nearly 130 million ounces of silver as an investment, at a price of $6 per ounce. In the same year, Buffett agreed to buy Star Furniture and International Dairy Queen Company (formally finalized in early 1998).
In 1999, at the age of 69, he invested in Nike and Tanger brand outlet malls.
In 2000, at the age of 70, he invested in Moody's and became its largest shareholder. Invested a 76% stake in Sino-American Energy. In July of the same year, Justin, a leading manufacturer of western boots, was purchased for US$570 million in cash. In the fourth quarter, Benjamin was completed with a cash of 1 billion. Thousands of independent dealers). At the end of December, JM was purchased for US$1.8 billion. JM is the leading brand of thermal insulation materials for commercial and industrial use in the United States. The company has an annual turnover of more than US$2 billion. Acquired Larson Juhl, a leading manufacturer of customized photo frames in the United States, providing services to 18,000 photo studios across the United States with a turnover of 300 million US dollars. This year, Berkshire Hathaway also invested in Kostock, Laser Mortgage Trust, and JDN Real Estate.
In 2001, at the age of 71, he invested in Pacific Real Estate, Obike (Steak Shop), Esmount (the largest data storage company in the United States), and increased his holdings of American Express.
In 2002, at the age of 72, he bought a forward contract worth 11 billion U.S. dollars against other currencies. By April 2006, he had made more than 2 billion U.S. dollars. Invested in American Standards Corporation, Williams Corporation (energy company), First Data Corporation (the company also controls Western Union). Secretly invested in PetroChina, eroding 1.109 billion shares, holding 6.31%, becoming the third largest shareholder after the actual controller and strategic investors. When the price of junk bonds fell into a trough, they bought bonds with face value of US$8 billion issued by Amazon and Level3 Communications.
In 2003, at the age of 73, he invested in an automatic data processing company (sold in 2004) and Hca hospital chain (with 200 surgical hospitals). The Hong Kong Stock Exchange's information disclosure rules have become more stringent. Buffett quickly increased his holdings of PetroChina to 2.34 billion shares, accounting for 13.35% of the outstanding shares. Invested 600 million US dollars in "Value Capital" hedge funds. Before that, he often criticized hedge funds in public. In 2005, this investment lost 33 million U.S. dollars.
In 2006, at the age of 76, he made a series of acquisitions. By the end of the year, Berkshire held a 4% stake in POSCO, the world’s third-largest steel plant.
Buffett's four classic principles on timing
- The principle of waiting without an attractive price
Only when the following conditions are met, we will invest most of the insurance company's funds into stocks: we understand; have good prospects; run by people with both integrity and ability; very attractive prices. We can usually find those who meet the first three conditions, but the fourth one stops us.
When the market conditions are good, such as those with good commercial characteristics and outstanding
- The principle of market panic
The two emotions of greed and fear will continue to appear in the stock market, but the timing of their appearance is difficult to predict. The duration and extent of market fluctuations caused by such emotional interference are also elusive. Therefore, we never predict when this emotion will appear and when it will disappear. Our goal is simple. When the public is greedy, it is fear, and when the public is fearful, it is greedy.
In fact, we usually find the best buying point when people's panic about an event reaches a peak.
- The principle of pessimistic expectations
We bought Wells Fargo in 1990 when the banking stocks were in chaos. The phenomenon of this disorder is that in the past few months, the stupid lending decisions of banks that were originally well-run have been disclosed by the media. With the announcement of bad debts, bank stocks have fallen rapidly. We bucked the trend and reached US$290 million, 5 times. Buying a 10% stake in Wells Fargo Bank at a lower price-earnings ratio.
Most of the reasons for the sluggish stock price are pessimistic sentiment, sometimes it is comprehensive, and sometimes it is limited to a certain industry or company. We look forward to doing business in this environment. It's not that we like pessimism, but we like price drops caused by pessimism.
- The principle of independent thinking
We choose those businesses or stocks that are not popular or not to be followed. It does not mean that we are smart investments. Reverse operations may be as stupid as the strategy of following the public. The difference lies in independent thinking. If you don't understand the value of your stocks, reverse investing is tantamount to playing with fire.
Looking back at the history of investment losses in personal reality, all have made mistakes in these four items. Either the company is optimistic and does not have enough patience to wait and buys in a hurry; or the company is in a high boom in the industry, and the retail investors of the brokerage institutions are optimistic and buy when the market is full of optimism; or the company is buying I can’t see through it. On the surface, I think it’s a reverse dip, but in fact I have no bottom at all, because maybe I don’t understand the value of the stock in hand better than the market.
Past experience tells us time and time again that when investing, pessimism is your friend and optimism is your enemy.