Stock Investment Way how to sustain high returns on investment Financial Tips

Category: Money tips Release Date: 2006-12-23

More than 8000 million shareholder accounts! A new round of super-bull market with its enormous wealth effect of China's stock market in one fell swoop refresh the record of the past 16 years. So far, a perfect storm bull market, so that the domestic one can not help but to envy tone magazine praised "Everybody shares of the gods." However, it seems that we can not help but cautioned that history never repeats itself but surprisingly, instead of indulging his imagination for the bull market, you might as Chen Chin-shih, the use of 51 holiday, re-read investment classic, filter out noise on the market, to clarify their own way of thinking. In view of this, this paper specially designed for readers to organize a group of articles is designed to provide readers with a fresh look at this market, the new coordinate system, from the investment in the Master's wisdom learned the power of reason to actively prepare for this round in the history of the most powerful bull market in .

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â–?bullish

Garbage stocks, "Along the ascent to heaven"

In a recent stock market, the junk bond performance has been "few kilometers from heaven." Garbage into gold during this period seems a large number of ST shares in the whole range of the expected vision of the next day turned fired. ST Renhe, the first day of re-listing the sharp rise 12 times. SST happiness even pull 22 daily limit, because stock reform, "silent" Over the last 4 months * ST long controlled the first day of resumption will be a record of domestic A-share market shares resume trading reform alarming rise --- 1083%.

To remove the trouble makers, ST storm fueled a lot of retail investors is also an important force. Many investors never thought about doing a trash stocks what the shareholders will face the risks. Perhaps, when they read, "Buffett's shareholder letter: Share Company Guide", it will be a truly useful lessons.

Author

â–?Warren Buffett (WarrenBuffett)

World-renowned investment guru, president of Berkshire Hathaway Inc., the world's second richest.

August 30, 1930 was born in the United States Omaha, Nebraska. In 1947, Buffett entered the University of Pennsylvania to study the financial and business management. Two years later, Buffett was admitted to Columbia University, Department of Finance, Hayashi investment theory in the famous scientist Benjamin Graham. In 1956, he returned home to set up, "Buffett Limited." In 1964, Buffett's personal wealth of 400 million U.S. dollars, at a time when he was in charge of the funds has reached 22 million U.S. dollars. In 1965, 35-year-old Buffett has acquired a textile company called Berkshire Hathaway, by the end of 1994 has developed into a 23 billion U.S. dollars in Berkshire owned industrial kingdom, from a spinning mill into a Buffett's huge investment in financial groups. His stock rose in 30 years, 2000-fold, while the S & P 500 Stock Average was up within a nearly 50-fold. Over the years, in the "Forbes" annual standings of the world's richest, Buffett has consistently ranked in the top three.

â–?Lawrence Cunningham

New York City, Cardozo Law School professor and director of the Center of Corporate Governance Heimann.

Investment Quotations

â–?As an investor, your goal should only be based on rational and understand the price of buying a stake in a company, in the five years from now, 10 years and 20 years, the company's actual earnings Previous certainly increased significantly.

â–?If you are not willing to have a stock for 10 years, it will not even consider having it for 10 minutes.

â–?Excellent Knight will be a good horse, not the weak and old at once into full play.

â–?the investment community will occasionally broke out of fear and greed of these two highly contagious disaster. Time of occurrence of these epidemics is difficult to predict, and because they cause market confusion, both the duration or degree of infection is difficult to predict. Therefore, we will never expect less than a disaster, or departure. Our goal is simple: when the greed of others fear, fear of others, when greed. If we have an outstanding management of the company's shares outstanding, our favorite holding period is forever. We are opposed to good performance when the company was busy selling stocks, cash profits, but to camp on his disappointing companies. Peter Lynch has aptly described this behavior is to eliminate flowers, watering weeds.

â–?upper medium price of buying the business, rather than the purchase price of the above and other medium enterprises.

Buffett was the first possession of the securities market by investing tens of billions of dollars in assets of the world's richest. In the past 35 years, he in charge of the book value of Berkshire from 19 U.S. dollars per share rose to 37,987 U.S. dollars, the annual compound growth rate of 24.00%. Even more unusual is that Berkshire is already a total assets of more than 1300 billion U.S. dollars up to a giant enterprise.

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Although Buffett has never written any books, but every year at the Berkshire Hathaway annual report to shareholders of the company to write a letter to sum up in the past year's successes and failures, from the selection of managers, select investment objectives and assessment companies to effectively use financial information. Professor Lawrence Cunningham in the United States will be the subject of these letters in a specific order to be organized into a book, these letters contain the idea received wide attention. Buffett himself spoke highly of this book. In his view, this book so far, any more than a biography about him must be good, if he wants to pick a book to read, it must be this, "Warren Buffett shareholder letter: Tutorial stock company."

â–?diversification benefits may be reduced

In the last century, 70 years, institutional investors by the famous business school academic impact of the decision as to what is generally considered the sale of the stock price has little to do with the value of the business. The theory that the stock market is very efficient, so the calculation of enterprise value, insignificant in the investment activities. Investors can hold a diversified portfolio to eliminate the risk of any specific securities. Many investment managers believe that stock prices always accurately reflect the fundamental values, the only important thing is that the risk of price volatility.

Buffett believes that if investors can understand the company's operating condition and be able to find 5 to 10 furniture have long-term competitive advantage of companies at reasonable prices, then the diversification of investments would be meaningless, it will only reduce investment and increase the rate of return risk. Buffett also cited the words of the famous economist John Maynard Keynes in support of his views: "As time goes by, I am increasingly convinced that the correct approach is to invest large sums of money into an understanding of the business and complete confidence in management staff. that a person can be spread across a large number of funds that he knew nothing or no confidence in the enterprise can limit risk, is completely wrong ... ... a person's knowledge and experience is absolutely limited, so at any given time, with little more than two or three companies I think it worthy of full confidence. "

Buffett suggested that investment in low-cost index funds will surely overcome the majority of investment experts to create the net. If you own investment, only to learn two courses: how to evaluate a company, and to consider the market price.

â–?decline is the Gospel of investors

If you plan to eat hamburgers for life did not raise cattle, then you want a higher or lower beef prices do? If you want to buy a car instead of the regular production car, you would rather purchase price is higher or lower? Buffett was so easy to understand the metaphor used to illustrate how a real investors should look at the volatility of stock prices.

Because he saw that many people mistake the matter. Although many people in the next few years, become a pure stock buyers still higher for the stock are happy, and in the stock price fall frown. Buffett believes that this is equivalent to them to buy a "hamburger" in prices and joy. In fact, only recently sold shares to be the only ones who like to see the stock rise, potential buyers should be more like the falling prices.

Buffett or even welcome the market down, because it allows him to pick up more with the amazing low-priced stocks. He said that as long as he is still alive, he would buy shares from year to year. Of course, Buffett also stressed that this does not mean that buying unpopular stocks unpopular.

â–?Do not buy cheap goods

In this book, Buffett is also frankly with their "bargain" investment failures and encourage each other shareholders. He had the book value by buying a large discount department store, the surface appears, where the staff first class, but also including a large number are not accounted for a large number of real estate and stocks. But the result he did not make a profit, three years after they bought the original price with the shot. An example of this, he not only met once.

If a very low price to buy a stock, it is usually some fluctuation in the value of the company, giving you the opportunity to dispose of a significant profit, despite the company's long-term performance may be extremely bad. Buffett called the "cigar pedicle" investment law. The remaining one was found on the street can be smoked cigars pedicle, it may not take a smoke, but to buy "cheap goods" but can be fully explored and that a profit. Buffett believes that this method of buying the company's ridiculous. First, the original bargain is likely to eventually become less expensive. To survive in a tough business, the problem is always an endless stream. Second, you get any advantage by the company will soon receive a low return on erosion.

Buffett hope that shareholders will understand that: Time is an excellent business friend, mediocre corporate enemy. In general the price of buying an unusual company, compared to the price of buying an unusual company in general much better. Now, he bought a company or common shares, we will look for first-class management first-class company.

News

Buffett hinted that intends to introduce a large-scale acquisitions

Xinhua News Agency, New York, May 6 - The U.S. "share God" Warren Buffett 6, expressed the hope that the leadership of Berkshire Hathaway for the purchase of a "huge" business, and may sell other assets to believe that the acquisition plan to provide funding.

According to Reuters, Buffett's Berkshire Hathaway in the day after the end of the company's annual general meeting of shareholders at a press conference made the remarks. Prior to that, Berkshire Hathaway once said he hoped to implement a scale of 5 billion to 20 billion U.S. dollars acquisition.

According to Berkshire Hathaway company offers balance sheet as of March of this year, the company has a 46.03 billion U.S. dollars in cash, cash and fixed income securities total nearly 900 billion U.S. dollars. Such a strong financial plan so that Buffett seems emboldened the full implementation of the acquisition.

It is worth mentioning is that Buffett on the 6th also directed a subsidiary of Murdoch's News Corporation plans to acquire Dow Jones & Company regarding commented. He said that News Corp. Dow Jones to issue 50 billion takeover proposal might not be the latter had received the last offer.

Buffett pointed out that the Dow Jones the company's good reputation and extensive international influence, is able to create cash income in another important than the value of, and even the Murdoch probably have to admit that their interest lies not only in the economy Dow Jones价�

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