Learn to invest with Buffett

Chapter 87

Chapter 14 verse 7 Maintain peace of mind in all situations

Once you see market fluctuations and think it is profitable, investment becomes speculation, and nothing affects investment more than a gambling mentality.

--Warren Buffett
Buffett believes that changes in the stock market are changes in people's hearts. The process of understanding the stock market is the process of knowing oneself. Only those who grasp themselves can grasp the stock market.

Many investors invest in stocks. Once they get stuck or lose money, their emotions almost reach the point of collapse.In fact, psychologists often say: "People are emotional animals." Who would be comfortable seeing their hard-earned money being lost in the stock market like this, so most investors have no way to face stocks like Buffett. Volatility is unflappable.

Buffett warns investors that investment must maintain a peaceful mind.If you keep remembering those wrong investment sad things in your heart, not only will it be useless, but it may also cause a series of subsequent or even more serious investment losses.

The most commendable thing about Buffett is that he has always maintained a peaceful mind.Whether it is when the Internet frenzy is coming or when the market environment is calm, Buffett is never in a hurry and is very calm.This is also the main reason why Buffett became the Buffett he is today.

As a stockholder, you must first maintain a peaceful mind and not be swayed by changes in the surrounding environment and the stock market.You must have your own analysis and judgment, and you must not follow what others say, follow the trend, and be locked up by others.Be sure that you are the most trustworthy person.The secret of the stock market is: "Volatility is an eternal truth, and it is ultimately up to you to grasp the investment."

The stock market is originally a battlefield to test people's mentality.The reason why the main large households win is because they have recognized that ordinary small households lack peace of mind. As long as they use the tricks of "habitual pressure" and "washing the basin", the small households can automatically sell the chickens that lay golden eggs in their hands at a low price.Usually novices who invest in the stock market open a good account and are always eager to buy stocks, regardless of whether the stock market is already at high risk or whether the stock price is too high.When you get the stocks, you will only be happy if you want the stock price to rise every day. If the stock price stays where it is, or even falls instead of rising, you will inevitably be in chaos and have trouble sleeping and eating.In this way, many people will lose patience, rush to sell, and instead chase after those stocks that are rising every day, but when the unsatisfactory cowhide stocks have just been sold, they will be replaced by popular stocks that are frisky on the market board and have a frightening rise. The original cowhide stocks began to be imposing, and their stock prices rose steadily, while the hot stocks that had just been acquired seemed to be possessed by evil spirits and fell straight. By then, it was too late to regret.Little do they know that there are no stocks in the world that only go up but not down, and there are no stocks that only go up but not up.If it falls too much, it will inevitably reverse and rise to regain its glory.

When large investors speculate on a certain stock, in order to eat goods smoothly and scare away some small investors who want to take a ride easily, the most commonly used method is to concentrate their strength and pour out part of their holdings at the juncture of the stock price's rise and fall to lower the stock price. Small households bleed out their holdings, and then take over at a low price, and then raise them again.Just operate back and forth in this way, low in and high out, making a lot of money.Understand this truth, the next time you see the stock in your hand fall, unless the overall general situation really turns bad, otherwise, you must not be scared immediately because of some turmoil or some "hearsay" in the stock market. Sell ​​the stocks in your hand at a low price, as long as you maintain a peaceful mind and wait patiently, there is always a chance to get out of the trap.

Most of the facts of stock trading prove that the market that relies on soaring prices purely supported by psychology always obeys the law of financial gravitation.The price gouging can last for a long time, but it will eventually plummet, and this decline comes as suddenly as an earthquake and avalanche. The more violent the frenzy, the more serious the aftermath will be.Once you fail, you should learn from the pain, use clear reason and wise knowledge to get out of the predicament, and win with patience.

Generally speaking, "forbearance" is mainly manifested in two aspects:

1. For myself, stock trading should leave room for maneuver.That is to say, when you are optimistic about the prospects of the stock market, don't invest all your funds and use up your strength at once, and when you are optimistic about the bad, don't sell all the stocks in a hurry.

2. As far as the general trend of the stock market is concerned, you should not blindly increase the price to chase the rise, and do not blindly ship goods to avoid the fall.

Investment motto:

Thousands of investors are eager to imitate Buffett, but what is really difficult to imitate about Buffett is not simple investment skills, but the peace of mind he always maintains.A good investment mentality is an important magic weapon for investors.Each investor has different investment expectations, risk appetite, self-control ability, market and environment, and their investment sentiments also vary widely, which directly affects the ultimate realization of returns.Therefore, if you want to become an excellent investor, the first thing you need to do is to cultivate a sense of balance.

(End of this chapter)