Recently, few investors can stand in the face of a messy global capital market. The rich can not afford to buy, there are shares of not afraid to sell.
We have already described how Peter Lynch, the investment guru, sees the stock market crash. This article shows how another investor, Gairoy R. Newberg, experienced 27 bull markets and 26 bear markets. in loss.
Roy R. Neuberger is a long-lived investment guru. He was born in 1903 and died in 2010 at the age of 107. He entered the market on the eve of the US stock market crash in 1929. He experienced 27 bull markets and 26 bear markets in the 20th century throughout his life. During the 68-year investment career, there was no loss in one year. Here are just a few of Newberg's ten investment principles for investors.
Principle 1: Study yourself.
The merits of personal character will help the success of the investment. Before starting to study the stock, you can first study whether you are suitable for investment by following this list.
1. Look at your temperament. Are you a natural speculator or are you less willing to take risks?
2. You need energy and need to be sensitive to numbers.
3. You must have a strong interest in what you do.
4. Successful investment is based on the flexible use of knowledge and experience. It is a good idea to focus on investing in a certain area where you already have specific knowledge.
Principle 2: Research master.
Neuberger believes that investors should seriously study those who have made great achievements in the investment field. Newberg's advice is to learn from these masters rather than follow the trend, benefit from their mistakes and success, and make appropriate adjustments based on your personal personality and circumstances.
Principle 3: Be alert to the sheep market.
This is Newberg's concern for the late 1990s US bull market, the market is vulnerable to the influence of a heavyweight market, can be called "the sheep market." A bit like a lamb led by a leader to the slaughterhouse, the vast majority of lambs unconsciously entered the slaughterhouse with the head sheep, sometimes being cut off wool and sometimes losing their lives.
Principle 4: Look away.
A large proportion of people on Wall Street are overly concerned about the company’s profitability at all times. Many researchers have the best trick to predict the company’s earnings in the next quarter before others. Neuberger believes that profits should be the result of long-term strategies, proper management and timely seizing of opportunities and other comprehensive factors.
If these factors are properly matched, short-term profitability should not be a major consideration. Another advantage of keeping your eyes on the long run is that it will not be attracted by Wall Street's hot spot. For example, the car stocks of the 1920s went hot in the bowling stocks of the 1950s, when people thought that every American would become a bowler.
But like hula hoops, this trend is turning to the end. People who buy early make a fortune. People who buy at extremely high price-to-earnings ratios are terrible.
Principle 5: Timely entry and exit.
Neuberger's point is that the timing may not be everything that determines success or failure, but it is definitely a major factor that determines success or failure. Long-term investments that seem to be very good may also cause you to lose a lot if you do not get the right timing. In the bull market, it is wise to curb your greed. Wall Street has a famous saying: Cows also make money, bears also make money, but pigs do not make money.
Principle 6: Research enterprise.
Newberg believes that it should analyze the research company's management, leaders, and the company's historical historical records, and check the company's tangible assets and the cash behind each stock. The company's dividend policy also deserves serious investor attention. Investors should be careful about so-called "growth stocks," and do not pay a high price for this.
The trick of investing in “growth stocks” is to find them before the company’s products are widely used and the company’s share price becomes expensive.
Principle 7: Do not be obsessed. Newberg reminds investors not to put too much emotion into a specific stock. Falling in love with a stock can, but before its share price rises soar, then let others love it.
Principle 8: Investment diversification.
Neuberger said, "Since 1929, I haven't lost money, although in a few years I'm only balancing my income, I don't earn or lose." Diversification, on the one hand, uses hedging to give people more. More patience to stick to those stocks that are undervalued, and to reduce the psychological fear of overriding the market. On the other hand, of course, it is diversification of investment.
Principle 9: Review the situation.
The so-called "time" and "potential", that is, the trend of the broader market, also refers to the world current affairs outside the stock market. Investors do not have to focus on economics. Neuberger's experience is that economics is worthless in terms of the stock market. You don't need economists to tell you to pay attention to interest rates. If you look at interest rates, you can know that low interest rates tell you better than any phenomenon that business conditions are bad.
Principle 10: Do not follow the rules.
At the very least, do not be too servile to follow the old, and update your views as new circumstances change. Neuberger believes that everyone will make mistakes. It is important to realize as quickly as possible the mistakes they make in decision-making. In his 68 years of working history on Wall Street, 30% of his time was wrong. There is no always right investor in this world unless he is lying.
The investment guru summarized ten principles because he was a master of investment. As an ordinary investor, can you stick to one of them?
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