The stock market in the past one or two years can be said to be either accidental or storytelling.

The stocks that have risen, especially those that have risen sharply, basically have no performance support, but are just speculative on the subject.

From the beginning of the year, the overseas AI outbreak, a round of artificial intelligence speculation.

Many companies have no orders, and their performance is still on the decline, but the stock price has doubled several times.

In the second half of the year, Huawei returned, and a round of speculation centered on Huawei was launched again.

This time, some companies did get orders from Huawei, but the order of 200 million yuan, the market value has increased by 20 billion.

Advertisement

This kind of speculative behavior that obviously does not conform to the logic of value investment, but leads the entire market.

The main reason for this situation is that the market is macroscopically cold, and the performance of blue-chip stocks is sluggish.

Apart from a few blue-chip stocks like Moutai, which can still grow steadily, the performance of most blue-chip stocks announced in the past two years is still a bit worse than expected.In 2021, following the peak of value investing, the performance of blue-chip stocks has always been a source of concern.

The stock prices of various "mao" companies have been halved, with oil mao, Golden Dragonfish, and sauce mao, Haotian, experiencing a significant drop of more than 70%.

The preference for capital has also shifted abruptly from value investing to large-scale speculation.

Behind this, a large wave of value investment funds, such as public funds, are trapped at the peak, unable to move.

The funds that have survived in the market are mostly speculative and quantitative funds.

These funds do not advocate value to begin with, and they have turned to speculation all at once.

This has also led to many retail investors who have endured for a long time, only the so-called "speculators" have made money in the past two years.

Many people say that such a market will never get better.

The problem does exist, but the problem itself is not something that retail investors can solve.

For retail investors to survive in the market, the first thing is to understand the rules of the game, regardless of whether it is a black cat or a white cat, the one that can make money in the end is a good cat.For instance, some say that the 200 million yuan Huawei order leads to a speculative surge in stock prices, which holds no value at all.

Indeed, the increase in market value by 20 billion yuan is clearly overvalued, but the 200 million yuan Huawei order is a tangible reality.

This indicates that the company still has the capability to undertake orders, and at least its technology is recognized by Huawei.

Is such a company valuable? Of course it is, but there is no consensus on the standard for measuring its value.

Some listed companies that are operating at a loss, after obtaining some orders, are likely to turn a profit in the foreseeable future.

The original valuation of 2 billion yuan, which has become 5 billion yuan, is actually relatively reasonable.

The room for speculation is essentially the advance release of performance expectations, which is also a standard value investment logic.

Buffett once bought many loss-making listed companies at low prices, and eventually a large number of these companies turned a profit, and Buffett made a fortune.

The foundation of value investing is to buy when a listed company is undervalued, and then sell decisively when it is overvalued by the market.

It is not, as people imagine, holding on tightly and waiting for long-term profits to double, which is not the case at all.This also explains why in the 21st year, at a time when value investing was clearly bubble-prone, investment turned into speculation.

Because the various "maos" that were far beyond normal valuations no longer had investment value and became speculative manipulations.

This is a value speculation done under the guise of value investing, and ultimately, the retail investors who believed it were trapped at high positions.

Therefore, whether it is investment or speculation, it is always about buying when undervalued and selling when overvalued, just this one logic of buying low and selling high to make money.

There is no point in debating investment and speculation.

It's like a value investor who buys and then the price rises immediately; isn't that value investing? Is it only value investing if the price doesn't rise after buying and only starts after a long cycle?

No one would question that Buffett is not doing value investing, and those loss-making listed companies he bought are all value investments.

So, what needs to be done now is to adapt to the market and find the investment logic of the market.

The so-called value speculation mainly looks for opportunities, or methods, with the following key points.Translate the following passage into English:

1. Opportunities for turnarounds in adversity should be adeptly unearthed.

The best opportunities in the market, or rather, the most lucrative ones, stem from turnarounds in adversity.

This refers to a publicly listed company that was previously unanimously bearish, suddenly seeing a glimmer of hope.

Originally losing money, or even suffering huge losses, about to be delisted, suddenly a large order comes in, and turning losses into profits is a sure thing.

This situation is the most easily hyped because once the losses are turned around, re-evaluation and pricing can start anew.

It's not that loss-making stocks are bad, or that loss-making listed companies are bad; it depends on the specific situation of the losses.

If there is no business revenue at all, then the chance of turning around is really small.

If it's just that the net profit margin is not enough, and the business revenue can still be maintained, once the industry recovers, the probability of the company making money is very high.

Losses in cyclical stocks are not a big problem and can be positioned at a low level.

Therefore, before speculating, it is important to understand the underlying situation first, to determine which category it belongs to, as each type of loss situation is different.2. Understanding capital is more important than understanding value.

Value speculation pays great attention to capital, which is essentially built up by capital.

The starting point of individual stocks in value speculation is often low, with most having a market value of tens of billions.

These types of stocks are usually neglected, but once a few hundred million in capital enters the market for speculation, the stock price can soar.

Therefore, on the path of value speculation, the promotion of capital is the most critical.

Otherwise, everything is in vain.

Understanding the operation and action patterns of capital has become the key to grasping the value speculation market.

3. Taking profits when it's good is the key, and not believing in stories.

The biggest difference between value investment and value speculation is taking profits when it's good.

A listed company with long-term stable profits can be observed for two or three more years.But a company that is not well-managed, aiming to become a highly profitable company, carries a very strong uncertainty.

In the short term, if there is a 2-3 times, or even higher, increase in value, then taking profits when the opportunity arises is the best strategy.

Never believe in stories, for stories are always just stories.

The cycle to verify a story is long, and for things that need to be verified, it's enough to take one step at a time and see how it goes, don't completely trust them.

4. Engage in the main trend of the market and abandon individual opportunities.

Additionally, regarding individual investment opportunities, reduce participation.

Because individual stocks do not have a "wind mouth" (a metaphor for a favorable opportunity or trend), they are not easily targeted by capital for speculation.

However, if the market sees a certain concept or a certain sector starting to be hyped, then the "wind mouth" has arrived.

Even if it's just speculative expectations, the probability of collective behavior will be much higher.

Individual scattered opportunities should be known to be abandoned, it's better not to participate, because the risk is also great.Speculation also follows trends, atmospheres, and styles of capital, and stock trading is about being the pig in the wind.

Whether it's investment or speculation, the logic of the market is actually similar, and ultimately it is reflected in the stock price as high and low.

Buying low and selling high is the survival rule of the stock market, and this rule will not change, nor will the logic of investment change.

As for the rest, they are all temporary appearances on the market, and they will eventually return to the essence.