90% of the opportunities are ignored by us on our own initiative.

An old question.

Once, a relative asked me whether a stock should be sold, and he had been held up by 8% of the price-this is a delicate position. The loss of cutting meat is already a bit painful, but if it is no longer determined, if it is more than 10%, many people will not be able to cut it. This has led to a long-term deep trap.

Coincidentally, this stock happens to be the one I studied earlier.

So I chose two more stocks in the same industry, put three together and asked him, "now suppose you don't have any stocks, if you have to buy one of these three stocks, will you still buy it?" "

My friend didn't seem to have studied the other two stocks at all. After looking at them for a long time, he replied, "I may still buy it, because the other two, one plate is too big, and the other is a loss stock. I don't like either of them."

"very well, what about these? "I then added this stock to my self-selected stock pool, and picked out five stocks with similar subject matter, performance and price. I briefly introduced it to him without giving any substantive suggestions for operation.

As a result, he took a fancy to another stock and was very excited: "Why didn't I pay attention to such a good stock before?" "

Although he was careful to change only half of his position, he equalized the loss of his last stock in two weeks.

Since then, the "stock swap" method has been used by me to answer the question of "what to do after being tied up". I have also made rough statistics, and the result is generally better than the "shareholding" strategy.

In doing so, I still have my own plan. I only show them a few more companies. In the end, he decides what to buy. Even if it is sold, it is not my fault.

However, I think what they really need to consider is the problem mentioned earlier:

"Why didn't you pay attention to other opportunities before? Just because this tied-up stock was your initial option? "

The "single-cause exposure effect" of special pit ripening

The question I am most often asked is, "help me see what this stock is like. I've tied up 20%."

In fact, the answer should be very simple--

Suppose you don't have any stock and let you choose one of this and all stocks, would you still choose it? If it is, hold it; if it is anything else, change shares; if you can't choose one, clear the position.

However, this absolutely rational answer is not in line with human nature, and the human question is always "what about the stock I have"?

This is a common psychological effect: "people prefer what they are familiar with because this preference reduces uncertainty." This is what social psychologist Robert Zajonc describes as the "single cause exposure effect" (mere exposure effect).

This psychological effect still has a lot of impact on investors.

For example, there is a rule that stocks and themes that have been speculated often occur from time to time in the next two or three years, because a large number of investors remember their crazy trend, and once there are signs of start-up, it is easy to "catch up".

In addition, stocks that you have made money are easier for you to buy again than other stocks; even stocks that you have lost are more likely to be noticed than unfamiliar stocks, so you are slightly more likely to buy.

But it is this "simple exposure effect" that makes investors have some strange psychology:

If an investor is short, he will carefully select a bunch of self-selected stocks and very carefully choose several bargain-hunting stocks; but once his stocks are tied up, the rest of his stocks will disappear instantly. It seems that the trapped stock is the best stock in the world, and he will slowly put all his funds into it like "Huluwa saves Grandpa".

This is just the beginning. "just because of the exposure effect" will make investors focus only on the trapped stock, and there is only one thing on their mind. When can the stock be released from the trap? It seems that the purpose of his stock speculation is to "release the trap".

In case they have a chance to release the trap, they usually come out to have a look after a long period of time, but when they find that it is a bull market, the biggest trouble comes--

Previously released stocks have skyrocketed, and other stocks, which one to buy? With a blank look on his face, he hasn't studied it.

People often say that he who can buy stocks is an apprentice, and the one who can sell is master. In fact, it is wrong. He who knows what to buy after selling is master.

In fact, even if he adopts the tactic of waiting for the "release of the lock-up", he can still learn more about the company during this period of time, but it is very strange, because his vision is too focused on the "release of the lock-up". He would rather hesitate in the two options of "cutting meat" and "waiting" rather than expand a new option-- "stock exchange."

How on earth can this "exposure effect" be broken?

How to compare Apple Inc with beef

There is a joke: "after dinner, my wife asked you: which do you choose, washing dishes or mopping the floor?" You said do the dishes. After washing the dishes, the wife asked: which do you choose, washing clothes or mopping the floor? You said mop the floor. After mopping the floor, the wife asked again: which do you choose, washing clothes or sleeping with children? You said laundry. When you see your wife and children asleep after washing clothes, you suddenly feel as if something is wrong. "

Stop laughing, using a question is the same thing as the question that everyone often asks, "help me see how this stock is, I set up 20%".

"it's down 5%. Hold or sell? "

"Let's take another look, it's also a technical adjustment. "

"it's down 10%. Hold or sell? "

"look again. After falling so much, there should be a rebound."

"it's down 20%. Hold or sell? "

"if you sell a fart, I won't believe it, and you can go on falling like this forever? "

……

A bad question can never get a good answer. "releasing the trap" is the result, not the goal, but after we are too caught up in the decision to "release the trap", we forget the real goal of "making money".

To put it another way, everything is different.

"it is found that there is another similar stock whose performance is likely to grow faster than expected. do you want to change your position? "

"well, let's change it to 30%. "

"I found a similar stock whose valuation is even lower. Do you want to change your position? "

"Yes, change it for another 30%. "

"I found another similar stock, and the industry track is better. Do you want to change your position? "

"No, the current stock price has already reflected the worst expectation, and it couldn't be worse."

By comparison, what's the difference between "hold or sell" and "buy An or buy B"? Compare "buy An or buy B" and "Ten optional stocks, which is better". What's the difference between these two questions?

The answer is obviously easy to see. Why didn't we think of it?

Fools know that the more options you have, the more likely you are to choose a good answer. The problem is that many people think that this one is good, and that one is also good, but when the two stocks are put together, just like Apple Inc and beef, they don't know how to compare them, so they can only ask low-quality questions such as "what to do if the stock is tied up?"

If you want to compare Apple Inc and beef, it is necessary to establish a unified standard and a complete system.

This standard is the common "reasonable valuation" of all stocks, and what I have set for myself is the "three principles of individual stock positions".

Three principles of individual stock position

Value investors study the stock of a company in many ways, from many angles and indicators, but in the end, "56 languages converge into one sentence": reasonable valuation.

For a "value investor" who has established a valuation system, there is no "stock tied up", only stock price overvaluation and undervaluation.

"reasonable valuation" is not a value, but a range-- buying below the range, selling above the range, and holding within the range.

As the company's performance grows, the reasonable valuation range gradually moves up, becoming an "upward channel", which is the reason why many people can hold such growth stocks for a long time.

However, this is only a major principle, and it is necessary to have a systematic method if it is to be applied to actual combat.

Because of the large proportion of individual investors, our big A shares are a market with very volatile valuations. Since October last year, Maotai's share price has risen by 80%, but the performance growth is only 20-25% a year.

The whitest white horse in this market has at least 50% room to fluctuate. In order not to buy and sell frequently, the difference between the upper and lower range of the "reasonable valuation" of consumer stocks is at least 50%. For example, 8-12 yuan is more reasonable than 9-11 yuan. The reasonable valuation of technology stocks should have double the upper and lower range.

By doing so, we can hold shares for a long time in the event of high volatility, and avoid selling prematurely and blindly copying the bottom when there are short-term changes in performance (such as the brief decline in Maotai's performance in the fourth quarter of last year).

But the wider "reasonable valuation range" also brings a problem: good companies fall within the "reasonable valuation range" for a long time and spend most of their time building platforms and becoming inefficient "invalid positions".

At this time, we must use "comparative thinking" to maintain the survival of the fittest.

The first principle of comparison is to compare the relative positions of all stocks that fall within the "reasonable valuation range" and move the position from the stocks above the "reasonable valuation range center" to the stocks below the "reasonable valuation range center".

Valuation is a subjective result, all sectors of the market do not rise and fall, the valuation of compulsory consumption falls less at the beginning of a bear market, optional consumption is more preferred at the beginning of a bull market, and technology stocks are more popular in the middle of a bull market.

To grasp the opportunity of the sector, it is necessary to use the second comparative principle-- industry rotation.Its principle is introduced in the article "the four laws of plate rotation rising".

The specific method of operation is to determine the highest and lowest matching ratio of the two core sectors of "consumption and technology" at this stage, so as to force yourself to pay attention to the companies that have been ignored in the middle and early stages of self-selection, and explore more stocks to buy.

But human nature is stubborn, sometimes I will inexplicably prefer a stock, even if the valuation is too high, also dillydally refused to reduce the position.

There is no hurry, there is a third comparative principle-"maximum position limit", which is based on "certainty".

"value investment" is not long-term shareholding, which is caused by the characteristics of domestic enterprises. Even Maotai, which has the highest certainty, is far from enough to keep your shares motionless. after all, it is a state-owned enterprise that monopolizes resources, and the improper adjustment of an official can easily destroy everything.

Therefore, in my investment system, we should first rate the short -, medium-and long-term "certainty" of a company: a maximum of 10 points, corresponding to a "maximum position" of 20%; a score of 9 points corresponding to a maximum of 10%, and no positions below 6 points.

This forces the position to be moved from a company whose performance has become uncertain to a company whose performance is still growing.

The standard "valuation range" and "three hoops" allow me to hold no less than five stocks at the same time, so as to diversify my holdings and reduce risk, while giving "certainty" a high position and earning returns, just right to strike a balance between safety and income.

In order to select these stocks, I have followed no less than 30 self-selected stocks for a long time, and maintain the frequency of research on stocks that are "not held but in the self-selected stock pool" to ensure that they will not "prefer" any stock. To avoid blind optimism caused by the "exposure effect", but also to enable themselves in a variety of styles of the market, the general trend, can immediately come up with stocks that can be bought.

Investment to overcome the weakness of human nature, but does not rely on the will, but on the scientific investment system.