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Can LegiEX be trusted? Value investment also needs analysis

Can LegiEX be trusted? Value investment also needs analysis. In fact, in my opinion, stock investment is actually like doing business, buying low and selling high, so is the so-called value investment.

You can think of a concept: In this world, there are some things that exist objectively, such as the cup of coffee in front of me, such as the balance of the deposit in the bank. They are all observable, measurable, and can be calculated, corresponding to some kind of real existence, even if this kind of real existence has its abstract nature (essentially, currency is also an abstract concept), but at the very least, I see my bank account There is 100 in it, I let you see, what you see must be 100, not 50, which represents an objectivity independent of the individual observer. A

In the world of investment, price and volume are an objective existence, and the cash deposit balance is an objective existence. The profit in the profit and loss statement is a calculated thing and a concept prop that is easy for everyone to understand, so different accounting methods will calculate different amounts, because this thing lacks an objective observation and measurement entity, and your weight Not at all.

There is a point of view in the brief history of mankind that is accepted by many people, and the country is a virtual story. The people, land and property of the country are all an objective existence that can be measured, but the state itself is purely a set of concepts that exist in the mind, and physics can never take the state as the research object, because this is not an objective existence .

Unfortunately, the so-called intrinsic value is also a virtual thing. When we calculate the so-called intrinsic value of a company, it is often based on "if how many years it will be in the future, how much profit it will maintain, and what is the risk-free rate ..." If the real estate is sold, and the money in the bank account is completely removed within N years, then in theory, how much should the company be worth per share ... "

Unfortunately, all this is just an assumption. And in most cases, it is a very unreliable assumption. No wonder the results are often very different from the original forecast.

Because intrinsic value is not an objective existence, and its measurement standards are different even for everyone (this is basically the definition of the subjective word), so the so-called value investment based on intrinsic value is not essentially an Strict and reusable scientific method.

Always remember one thing, Buffett is respected as a stock god, because according to the transaction market in the market as the only measure, Buffett's portfolio outperformed the market and outperformed most competitors. Our only measure of the god of value investment is precisely based on price. Why is this so? Because only the price, the actual price that exists objectively, is the only measurable and computable.

Buffett is the god of admiration. Duan Yongping is the king of investment in the Chinese world. They say they are doing value investment, no problem, the question is, what is their so-called value investment, in essence?

My personal understanding is actually very simple. In the absolute sense, value investment is investment that does not use the transaction price as a measurement standard. In layman's terms, after buying it, it will never sell, and only rely on dividends as a way of return. This investment model is value investment, because value can be converted into a measurable cash return without being based on transaction price. The method is to pay dividends (in fact, it also includes repurchases, which will not be discussed here), and convert the conceptual intrinsic value and reported profits into a tangible account balance.

I bought when a stock's performance was sluggish. After two years, the company's performance reached a new high, and I chose to sell it. Is this the perfect case for value investment? But in fact, in the past two years, the cash that was really returned to my account through the "company to investor" value feedback mechanism could not cover my purchase cost. The reason for making money is that other investors in the market have changed their views on the company after seeing the performance report. A new story about "intrinsic value" replaces the old one, so some people are willing to spend more money to buy Into. Therefore, it is the change in perception that really makes you money, and there may be many reasons for this change, not even the performance itself.

In fact, most successful cases of so-called value investment are based on two basic points: first, the ability to predict the long-term performance of a company, or the ability to tell the fortune of the company; second, the results you measured There is a big enough disagreement with the views of most people in the market, the so-called poor enough perception.

So, what is the case with so-called price-based speculation? It is nothing more than two basic points: first, the ability to predict the future stock price of a company, or the ability to tell the price; second, the result of your calculation and the actual transaction price on the market there is a huge difference .

Did not find, in fact, the two methods, the difference is far less than it seemed at first? First of all, it is necessary to make very unreliable fortune-telling for the future; secondly, the result of fortune-telling is often the product of a combination of multiple factors, including the prosperity of the entire market, the fundamental changes of the company itself, and the popular bias of investors It also includes various strange factors. In the long run, predicting stock prices and predicting the prospects of a company are no different from jumping off the big gods. They have nothing to do with science. They are more like a metaphysics ...

A large part of Buffett's ability is that he knows which companies 'lives are better to calculate, and which companies' lives are difficult to count. Even so, he often makes mistakes. Others, then needless to say.

In addition, there is a big difference between you and me as a value investor and Buffett as a value investor, that is, if necessary, Buffett can correct the "mispricing" of the market, such as Initiate a tender offer. For ordinary investors, this is basically not possible.

The vast majority of investors-I mean, basically everyone on the snowball, what is really pursued is not a value investment, but through the prediction of performance over a certain period of time to find and grasp Live the changes in the ideas of other traders in the market, and make money for yourself through the changes in other people's ideas That is to say, in essence, what we are doing is a game about price. The so-called value is just one of the props in the game.