In-depth sharing: Investment - These four types of people are not very suitable!
Investment mogul Duan Yongping, with his unique insights and rich experience, has pointed the way for the brothers.
He clearly pointed out that there are four types of people who are not suitable for investment. These views are not only a profound analysis of the essence of investment but also a precise insight into our psychology and behavior.
01.
Cash flow anxiety individuals are not suitable for investment. Duan Yongping emphasizes that investment requires 'idle money and idle mind', which is the foundation of investing. Investing is a long-term marathon that requires 'long-term idle money'; otherwise, it is easy to lose rationality amidst market fluctuations.
If we are still struggling with whether to invest full-time, worrying about losing salary income, then we lack a correct understanding of investment. Buffett once said, "If you can't stand a 50% drop in stock prices without panic, you shouldn't invest in stocks."
This indicates that we must have sufficient psychological endurance and financial planning ability to move steadily on the path of investment. If we can't even plan for our personal financial security, how can we possibly understand complex enterprise value?
02.
Cognitive lazy individuals are also not suitable for investment. Duan Yongping believes that investment does not have a 'standard answer.' He found that many people like to ask him 'which stock to buy,' but do not ask 'how to evaluate enterprise value.'
This inertia in thinking is destined to lead to failure in long-term investment. Investment must be based on one's deep understanding, rather than blindly following trends or copying others' homework, which usually ends badly.
Duan Yongping once cited a typical case: when Moutai dropped sharply in 2013, someone asked him 'Can I buy now?' He countered by asking if the person had seen Moutai's financial report, visited the distillery, or understood the dealer's inventory. The person replied, 'No, but I heard...'.
Duan Yongping's conclusion is: 'This is speculation, not investment.' Only through one's own research and analysis can one truly understand the value of an enterprise and make wise investment decisions.
03.
Those who are not suitable for investment are speculators. Duan Yongping strictly distinguishes between investment and speculation: investors focus on the future cash flow discount of enterprises, while speculators guess short-term price fluctuations. Speculative behavior often comes with high risks, and Duan Yongping is particularly wary of three dangerous behaviors: leveraged trading, short selling mechanisms, and frequent trading.
Leveraged trading is like 'dancing on the edge of a cliff.' Once the market trend is unfavorable, one may fall into the abyss, and we may suffer huge losses. The short selling mechanism is equally dangerous, because 'the most you can earn from shorting a stock is 100%, but if you guess wrong, you could lose infinitely.'
Frequent trading leads to each transaction consuming the investor's cognition, and transaction fees will long-term erode profits. Investment is not a short-term speculative behavior, but is based on the judgment and holding of the long-term value of an enterprise.
04.
Emotionally uncontrolled individuals are also not suitable for investment. Duan Yongping believes that investment ultimately tests psychological quality. The market is like a mirror, reflecting our own cognition and character.
Investors with strong psychology can remain calm amid market fluctuations and quickly adjust strategies through analysis of mistakes. However, emotionally uncontrolled investors often lose direction in market volatility and make wrong decisions.
Duan Yongping emphasizes that maintaining an ordinary heart is very important; attitude is more important than IQ. Only by keeping a peaceful mindset can one steadily move forward on the path of investment and reap the slowly growing fruits of victory.
In conclusion
Investment is a discipline, but also a mindset. Duan Yongping's views provide valuable guidance for investors. Before entering the market, we should carefully examine whether we belong to these four types of unsuitable investors.
Only by having sufficient financial planning ability, deep cognitive ability, a stable investment mindset, and good psychological quality can one go further along the path of investment.$BTC
