Category: Money tips Release Date: 2006-04-04
"Fund on the 7th to talk about" the third lecture of the Department of Tianfu Morning News invited the fund's chief investment banking division Liu bits. "May 30 stamp duty increase, the index fell; now back on the broader market 4,300 points, but everyone's personal assets are reaching a new high?" The presence of investors are shaking their heads. "Why the bull market in our investment income less than the broader market it?" Liu place to ask questions again.
Liu position as a research Buffett expert to tell you the Buffett story of the bull market discipline the four calendar and hope that everyone will be inspired by.
People are too greedy, we have to fear
"Outdoor surface temperature about 40 â„? it is estimated we are now market's temperature close to this temperature, there are still investors desperately want to tape rose to 8,000 points, 10000 points." Face of the greed of some investors, Liu-bit first want to emphasize is that Buffett "When people are too greedy, we have to fear" the famous saying.
"Buffett's life has been a four times a bull market, the first time was in 1967 -1969 years." In 1967, the U.S. Standard & Poor's index rose by 31%, volume was up 5 times more than a decade ago; in 1968, against the big up 11% in volume over the previous year has doubled. Volume continued to surge, the Stock Exchange can not afford a computer, often blocking a single phenomenon, the whole market is crazy. Even charitable foundations to invest in bonds have begun a large-scale purchase of the stock, "because they are afraid to miss a rare opportunity for the bull market, rather the fault occurs, do not miss.". In 1969, the Dow Jones index broke through 1,000 points, according to price-earnings ratio calculation, IBM was 39 times, think of music is 50 times, Avon is 56 times more.
Up watching the stock market every day, buying stocks can be easily relaxed to make money, allowing Buffett dilemma. Mr. Buffett has always believed in the concept of value investing, only buy undervalued stocks, and this was in the market crazy chase the game, still insist on the original value of investment? Buffett was 39 years old, worth nearly 10 million U.S. dollars. "Thinking a full 4 months, Buffett has not only not involved in this share investment craze, but decided to dissolve his own investment company, all funds returned to investors partner.
By the end of 1969, stocks began to fall from a high point, to May 1970, the U.S. stock market has lost a lot of hot stocks by 50%. The Other Buffett Quewu shares, he survived a crash.
"This is Buffett's first great bull market give us inspiration. Big bull market the more crazy, the more we should oppose greed, just leave." Liu spaces are especially stressed that "Pakistan Buffet, stock like products , when the price far exceeds the value, it simply is not worth to buy, the more the more is not worth chasing up. "
Others are too afraid, we have to greedy
"Buffett soon ran into a second great bull market." Liu bits that index began to rebound in 1970 to the end of the year rose 4% in 1971 rose by 15% in 1972 rose by 19%, when the most market sought after is the 'beautiful 50-unit', the blue-chip average up to 80 times price-earnings ratio. Buffett's Berkshire now has acquired a 40% stake in the company on account of funds more than 100 million U.S. dollars, the stock position with only 16%, 84% bonds, and no longer accepting new fund management. Buffett said: 'I like a lecherous young man, came to a shortage of people without an island, what to buy but will not buy. ' "A vivid metaphor has revealed the year's frustration and patience.
But patience will eventually return. 1973 Great Pandie by 15% in 1974 fell by 26% broader market two years Diediao more than 40%, from 1,000 points in the broader market fell 580 points, this time from the Wall Street bull market to bear market, we have been busy sells stocks, the original stock was 80 times price-earnings ratio is only 8 times, and basically one will buy the stock.
" 'Three no-ming, blockbuster', forbearance for three years, Buffett said: 'I like a lecherous young man came to her country, a great opportunity to buy stocks to a'. Buffett rushed into the stock market to buy mad stock. Results in 1975-1976 and the U.S. stock market rose 60 percent, Buffett made a profit of 80%! "
"Second great bull market, Buffett stressed: the fear of others too, we must be" anti-terrorism. "Only when people have fear, dare not buy, you might actually buy good stocks cheap."
Work and grow together with the company
"The third bull is even more cattle in the United States!" Liu said bit in 1984 to 1986, just three years the U.S. stock market rose 1.5-fold, equivalent to 1000 points, rose to 2500 points. By 1987, the broader market continued to be strong, broad market on the first ten months rose by 44%. When, despite the Fed raising interest rates, but the U.S. stock market has continued to rise.
"At this time Buffett quite cool, since 1985, Buffett continued lighten up, to his hands before the 1987 crash only three stocks: The Washington Post, the U.S. government employee insurance company, Metropolitan ABC, other stocks firmly thrown, a surge of not remain. "
To October 19, 1987, the U.S. stock market one of the most black Black Monday arrived, and broader market fell by 508 points one day, or 22.6%.
On that day, the market value of Buffett's Berkshire managed a loss of 342 million U.S. dollars. "But Buffett has not the slightest panic, remain calm in the office as usual to read annual reports and information, subordinates surprised to find that Warren Buffett may be the only one the day of the collapse of the stock market does not care about people, Taishan collapse in the former and the color will not change. Buffett that day only to come out from the office once, the staff said, they fell on the company does not have any effect, everyone in the Why Why. "in October 1987, stocks began to rebound, then not only the points to fall back fill, but the year also rose by 5%. Buffett's profit up 20 percent this year. 1988 to 1989, the U.S. stock market rose 48 percent, Buffett made a profit of 64%.
Why is Buffett the third largest bull market can substantially beat the market? "These three Awkwardness, both bull and bear markets, Buffett has held. Among them, the Washington Post in 1973 to buy, and now has been held for 34 years, when invested 10 million U.S. dollars, and now has reached 1.53 billion U.S. dollars worth , up 153 times! "Buffett's investment in a long time for investors to listen much surprise here. Why should a long-term holding, a motionless? Liu Bit said, "In fact, many domestic and foreign billionaires, the key to their prosperity to a small business continue to be large, we have to make big money, they buy such a business, to accompany this business growing, witness the entrepreneur become a billionaire from Qiongxiao Zi, so we followed the fortune. "
The companies do not vote do not understand
Buffett's experience from the last bull market began in 1995. 1995 to 1999, five years, the U.S. stock market rose by 2.5-fold, this time up even more fierce, high-tech, Internet stocks as a major driving force. "At that time the market and the network as long as the detached Along ascended to heaven on a company as long as certain Internet companies, if not profitable, you can also ring the immediate availability of billions of dollars." But Buffett's shares of Internet stocks, no one to buy, still holding The Washington Post, Gillette blades, Coca-Cola and other traditional industries, broader market this year rose by 21%, while Buffett earn 0.5%. "This is Buffett's most backward relative to the market a year." Liu recalls bits.
Open that year when the general meeting of shareholders, Buffett said he felt so ashamed. All the shareholders are asking why he did not buy Internet stocks, technology stocks, a lot of media criticism of Buffett's investment strategy has been outdated, ineffective, and is now dominated by Internet stocks, technology stocks. In a condemning, Buffett was unmoved, continue to resolutely long-term holding Coca-Cola, The Washington Post and other traditional trades stocks, a surge of Internet technology stocks than buy it. "Buffett did not buy the network technology stocks The reason is very simple, according to Buffett's own words: 'I do not understand networking technology stocks. I can not determine their long-term prospects'." Liu said bit sum. While Buffett and Bill Gates are good friends, Buffett has a share of Microsoft stock did not buy.
Results By 2000, the U.S. stock market bubble burst in Internet stocks, broader market dropped by half within three years, while Buffett has not a loss but the three-year profit by 10%. Holding stocks in traditional industries has been fixed Buffett to 60% advantage over those who chase hot technology stocks speculators network.
"Big bull market rally,, But the market does not mean that your stock will rise up the same amount. In the big bull market frenzy, the investors to remain calm and must not chase the blind herd sell into, and learn to be independent analysis, the independent judge , independent decision-making. to beat the market long term, is not that you can predict the stock market will be down will go up, the key is that you hold shares of listed companies is not a very good good company. Buffett tells us that in fact the investment is very simple, to find a good company and long-term holding. "This is Liu-bit for everyone's recommendations.
