Snowball Special Issue No. 028: A Guide to Preventing Fools in the Stock Market

Chapter 6 The Stupidest Thing in the Investing World
Yu Xiaoguang, individual investor, original link: http://xueqiu.com/5277310522/30047431
It is a good thing that the Snowball platform is getting bigger and bigger, but the windows are too big, and not only hard-working bees but also hard-working flies fly in.Flies also have to pretend to be bees, to pass flowers and pollinate them.After reading the experience of @喜乐心, it is a typical first-timer who enters the market and encounters unexpected disasters. Apart from my lack of ability to distinguish, I can only blame myself for being obsessed with ghosts and eager for money, and fell into the investment trap by mistake.Although every account opening form has "the stock market is risky, you must be cautious when entering the market", but the investment beginners who can't tell where the risks are, are basically mud bodhisattvas entering the water.After being stuck in the quagmire, apart from being unable to get out of the prisoner's dilemma, it is easy to use the "straw" around you as a lifeline. In addition to accelerating destruction, it will not help the progress of investment. The consequences range from a decline in the quality of life to a loss of life Obsession hurts family members.The stock market itself is a big dye vat, which fully releases people's inner desires, greed and fear.Combined with some highly deceptive disguises I have seen over the years, I will give a risk warning to investors who are new to the market.

The capital market itself is very deceptive.When a person is frustrated at work, he thinks of stock trading.When a businessman had nowhere to invest, he thought of stock trading.When a student finds it difficult to find employment after graduation, he thinks of stock trading.When a national cadre has nothing to do after retirement, he thinks of stock trading.Stock trading seems to have become a Garden of Eden for everyone who is frustrated in reality and seeks refuge.It seems that as long as you go to a brokerage to open an account, and then put some money in, you can try your luck in the stock market. Who knows that you are not China's Buffett?If the stock market is used as a place to make a living, the threshold for participation should be the lowest in all industries, lower than selling pancakes and fruits on the street. Livermore once revealed in his book that at every reception, people would come to inquire about any stocks that could make him a fortune.No one asks a surgeon how to make a fortune doing heart surgery, or a lawyer how to make a fortune in a lawsuit.That's because the barriers to entry for doctors and lawyers are high, requiring years of study and brutal exams.But if the qualifications of doctors and lawyers are as simple as opening a stock account, and failure only requires you to bear limited consequences.I can guarantee that many people are willing to try it, just like trying to trade stocks.

China has no shortage of "experts".The most harmful people are investment experts.My consistent view on the definition of stock experts is "trying various failed methods and being good at summarizing, and generating a sense of accomplishment in the theoretical summaries of failures, thereby permanently avoiding success." Even if decades of football experts shout out their throats outside the field, they will not attract the post-90s players on the field to discuss how to play with them, but this does not hinder the attraction of other spectators.If the expert speaks eloquently about the ball, it is recommended to bet on Germany on one side of the audience and on France on the other side.Then at the end of the game, at least half of the audience has no doubts about the experts.Many books on the stock market are the product of survivorship bias. Simply put, 1 orangutans are asked to hold a world coin toss competition. If the probability of heads and tails of the coin is 50:50, the losing orangutan holds a coin in his hand. For the winner, after 1 times, there are about 10 orangutans left, and each orangutan has 10 yuan in his hand, which is 1000 times the original amount. Then these 1000 orangutans must be regarded as gods by the remaining 10 orangutans and invited Lectures and preaching everywhere, and then these 9990 orangutans wrote several books "How I Earned 10 Times by Tossing Coins" and "Coin Tossing Technical Guide".But this is actually not the worst thing. After all, taking luck as ability is just to satisfy personal vanity. These 1000 orangutans did not actively deceive the 10, but did make money from coin tossing. Lectures and preaching have the positive side of chicken soup for the soul. Although it encourages disadvantaged investors, it does not necessarily reap positive results.

The stock market is so big and there are so many people involved.Not everyone's business model is to "invest for profit".What?Not profiting from investing?So what are they doing in the stock market?You must know that not everyone in the gold mine makes a fortune by digging gold by themselves. Selling mining tools and selling mining rules is a more stable means of making a living.This is a truth in the stock market, but no one will regard those who sell mining tools and mining rules as mining masters.In the stock market, if the brand of a master is not attached, no one will care about the product, so even if you have little knowledge, you have to pretend to be a martial arts master. The author of "Trading for a Living" basically relied on investor training for a living. Gann, who was regarded as a god in "Technical Analysis", went bankrupt many times in his life, and was impoverished when he died.But this does not prevent failed experts from establishing a successful label in the hearts of fans. In fact, many scams and disguises are very low-level. The reason why they can still deceive people can only show that they are more bewitched by their own desires.Low-level deceptions are actually high-level, just like the reason why CCTV advertisements are so expensive is that advertisers know that people who watch CCTV are the most likely to believe what is said on TV, and low-level deceptions effectively filter out those who can see through the deception, and finally the remaining All of them are brain-dead fans, but you can eat whatever you want.

In addition, there is another kind of indirect damage expert in the capital market, whose characteristic is that he likes to talk about "Buffett".A person who grew up in China, but who “knows everything” about what he said, what he did, and how he made a lot of money to an old man thousands of miles away is at best a big fan.Fortunately, Buffett is still alive, if not for this group of people, I don’t know what they would interpret to confuse the public.Domestic Buffett's spokesperson is characterized by a relatively pedantic background. It is not a bad thing to like to study investment as a knowledge, but investment is relatively scientific and lacks the inevitable connection of causality.Especially for beginners who are new to the market, many years of time and money will often be wasted if they read the wrong book by mistake.

Those who like to "fake the tiger's prestige" in investment have two motives in my opinion: one is "Cultural Revolution" like "Chairman Mao said..." Usually this kind of people use external force to give themselves empty words Increase the weight; the other is more fatal, it is the lack of independent thinking ability, unable to form your own things in daily investment life, and test your own investment framework in the risk.It is impossible for human beings to learn to swim by reading swimming books, but many people expect to learn from an old man thousands of miles away to succeed. The fatherly old man is teaching in his ears, and in this way, he has the illusion of "spiritual friendship" with the old man thousands of miles away.I deeply feel that I have a mission to promote and disseminate my personal understanding. It is too selfish to "make money" by myself, and I must preach and preach to save all sentient beings.This type of investment academics does not have much social harm if they specialize in their own research, and they will have a sense of "academic" accomplishment if they study investment as a science.However, the high-ranking theoretical school in the ivory tower itself is extremely cold. It needs to go into the world to find warmth and arouse the resonance of the masses in order to increase its sense of existence.And those who can be attracted are often beginners who have just entered the market.Investors like Buffett are like Leonardo da Vinci in painting and Michelangelo in sculpture.If someone published the "Da Vinci's Guide to Painting" "Sculpture Like Michelangelo".Then, what kind of paint Da Vinci used, what kind of animal hair brush, the stone used by Michelangelo to carve David, and the angles and tools of the carving are analyzed clearly. Students who study painting and sculpture must think this man is too ridiculous. up.

The reason why value investing is famous is that value investing is easier to record than other investment methods.Even if Soros described in detail how he made a lot of money by shorting the British pound in the 20s, there is no reference. After all, the "environment" of investment is not simply repeated, but after seeing Buffett buying Coke, he looked for consumer companies in China. Go to Buffett to buy Wal-Mart, and look for retail companies in China, which is relatively more likely to produce positive results.But countless pedants try to dogmatize and simplify investment.Because this is more conducive to the spread of one's reputation, if the Ten Commandments in the Bible are the Hundred Commandments, then it is obviously not so convenient to spread.Simplifying and dogmaticizing investment can easily lead to imitation.The result is that buying companies with low valuations and uncertain prospects is dubbed value investment, and it is called long-term holding without profit for many years after buying.If an investment is not profitable for many years and relies more on changes in the market itself, it is more like a beta investor. What β investors earn is the volatility of the market itself. If the sectors that have not risen for many years start to rise, it is obvious that a big bull market is coming. If you are waiting for a bull market, it is better to buy ETF funds.However, it is easier for imitators to persist in wrong investment behaviors that have found sufficient theoretical basis, while investment behaviors that lack the "value" label seem to have no spiritual support and immediately collapse.

Anyone who does not talk about their own personal or investment cases around them, but conducts specific stock analysis, but brags about what happened 50 years ago, is a missionary who is playing some unfalsifiable tricks to attract believers.Xu Fu deceived Qin Shihuang through the story of the elixir thousands of miles away, and got funding to fly away.Some investment scholars simply retell the language of the textbook with their own understanding, and believers who read Buddhist scriptures every day will not feel that they have become Buddhas.But if you study too many academic theories, you will have the illusion of mastering the magic weapon. At worst, you must resonate with the fans around you.Then divide the fans into several positions, and after a few rounds, a group of surviving brainless fans will naturally worship.

Beginners entering the market should listen less to what others say and observe what others are doing more.Those who shouted to lose weight every day ate all the braised pork on the table; those who regarded themselves as experts every day racked their brains on how to collect membership fees, publicized how to sell books better, and lived in poverty but claimed to be low-key.When talking about specific companies, they respond with empty theories. If there is any dispute, they immediately move out of Buffett and other great masters to increase their voices. Beginners must be careful.

For the same company, everyone will have their own views, but the discussion of some facts can form a unified value judgment.Communicating with people in the industry and discovering the truth about the company's internal operations is of great benefit to understanding investment targets. If you are lucky enough to meet investors who are as interested in the company as you are, and have the same investment judgment as you, then you will With the basis for discussing investment, whether to discuss specific business facts or chat with opinions, the results produced are very different.One is a discussion that can produce specific investment conclusions, and the other is nonsense like punching fists in the air.

The most stupid thing in the investment world is the lack of independent judgment and being confused by rumors. What is even more stupid than this is to let mistakes correct mistakes and label them as "value" to paralyze themselves.What is even more stupid than this is to establish one's own logical relationship in the experience of others, and spread it to harm all sentient beings.There are no experts in the investment world, only winners!
(End of this chapter)