Answers to the previous article

The first step: see the industry

1, what is a good industry?

Warren Buffett said, investment is very simple, choose a long snow trail, the best snow or wet, so that the snowball will roll bigger and bigger.

The meaning is to pick a good industry, not only to go long, there is a compounding effect, making money more and more easily.

Good industry must meet two criteria:

(1) the market demand should be large enough, and can be long.

Demand is large enough to understand, the market demand determines the ceiling of the industry. Investors love to hear the "trillion dollar market", not without reason, because the big road will run out of big companies.

So, big and round, oh no, big and lasting trillion dollar market where to find it?

No matter how good or bad the economy is, people can not live without food, clothing, housing and transportation, life, illness and death, these are the eternal "golden track".

(2) the rapid growth of market demand, or even explosive growth

As mentioned earlier, the stock price is a response to future performance. If the market demand remains stable, but not growth, then the stock price is no way up.

For example, highway tolls, it seems to be a good business to lay charges, but the annual number of vehicles crossing the road is so much, but do not dare to raise prices. That stock price naturally will not rise.

In fields such as science and technology, the launch of new products, key technology breakthroughs, often stimulate people's demand, overturning the original pattern of supply and demand, thus gaining explosive growth, the stock price will also soar.

Combining the above two points, you can easily figure out that

For individual investors, as long as they specialize in a niche in these three major areas, see even just one or two companies, and hold firmly at the right time, your whole life will be very different.

All you have to do is to give full play to your strengths and focus in the right direction, for example, by deeply studying the industry you are in.

In this way, you will have a high probability of beating institutional investors. Just like the most famous fund manager Peter Lynch said: As long as you do a little research on stocks, ordinary investors can also become stock investment experts, and in the stock selection can be as good as the Wall Street bankers!

‌$苹果(AAPL)$  ‌‌$标普500ETF(SPY)$  ‌‌$标普500(.SPX)$  ‌‌$特斯拉(TSLA)$  ‌‌$纳指三倍做空ETF(SQQQ)$  ‌‌$亚马逊(AMZN)$  ‌‌$微软(MSFT)$  ‌‌$阿里巴巴(BABA)$  ‌‌$谷歌(GOOG)$  ‌

A little response to the previous article on how to pick stocks. I hope this will be helpful. And give your opinion