As a professional investor for 68 years, Roy Neuberger experienced 27 bull markets and 26 bear markets in the 20th century. He never lost money in any year, and is known as the "stock market winner of the century".
The Neuberger Berman company he founded had $200 billion under management.
In his autobiography -"The Stock Market Winner of the Century: The Autobiography of Roy Neuberger, the father of American Mutual Funds," Neuberger summarized 10 principles of his investment career.
Source: nb.com
1. Know yourself
After analyzing all kinds of intertwined factors, if you can make a favorable decision. Then, you are suitable for investment.
Do you have a speculative mentality? Do you feel uneasy about the risk?
If you feel wrong, get out of it quickly, the stock market does not take as long as real estate to go through the procedures to correct. You are always able to escape from it.
You need to have more energy, the ability to react quickly to numbers, and more importantly, common sense.
The success of investors is based on the knowledge and experience they already have. You'd better invest professionally in areas you are familiar with.
Before you really become an investor, you should also check whether you are physically and mentally qualified. Good health is the basis of your wise judgment. Don't underestimate it.
2. Study the great investors
Successful investors lead to success.
Rowe Price values the growth of emerging industries, thus achieving success.
Benjamin Graham respects the basic law of value.
Warren Buffett, on the other hand, carefully studied the lessons taught to him by his teacher Ben Graham when he was studying at Columbia University.
George Soros applied his ideas to the field of international finance.
Each of them has achieved great success in his own way.
3. Beware of the sheep market
You can learn from the experience of successful investors, but don't follow them blindly. Because of your personality, your needs are different from others. You can learn from your successes and failures and choose what suits you and your surroundings.
The impact of individual investors on a stock sometimes causes it to rise and fall by 10 percentage points, but that is only a moment, usually a day, no more than a week. This market is neither bull nor bear. I call it "sheep market".
Sometimes the sheep will be killed and sometimes the wool will be cut off. Sometimes you can be lucky to escape and keep the wool. The "sheep market" is somewhat similar to the fashion industry. Fashion masters design new fashion, second-rate designers copy it, and tens of thousands of people chase it, so the skirt is short and long.
Don't underestimate the role of psychology in stocks. People who buy stocks are more nervous than those who sell them, and vice versa.Apart from economic statistics and securities analysis, many factors affect the judgment of buyers and sellers, and a headache can lead to a wrong sale.
In the sheep market, people try to think about what most people will do. They believe that most people will overcome the difficulties and find a favorable solution. It is dangerous to think in this way, and you will miss the opportunity. Imagine that most people are an institutional group, and sometimes they implicate each other and become their own victims.
4. Keep a long-term perspective
Paying attention to short-term investment is easy to overlook the importance of long-term investment. Enterprises often invest a lot of money to make long-term investments.
Profits should be built on the basis of long term investment, effective management and seizing opportunities. If these are arranged, short term investment will not dominate.
When a popular stock is analyzed from a small perspective and it fails to finish a quarter, the panic of the market will make the stock price fall.
5. Get in and out in time
A speculator or investor often succeeds because he will invest a lot of money to buy when the market is weak, so that he can exchange the same money for more shares.
On the contrary, investors will sell stocks at a high price in a strong market, and although they do not sell many stocks, they can make a lot of money.
The timing depends on your own independent thinking. In the operation of the economy, the uptrend may occur in the downtrend, and the recession will start at the best part.
Bernard Baruch is the best timing investor. His philosophy is to do well without greed. He never waits for the highest and lowest points. He buys in the weak market and sells in the strong market. He advocates selling early.
6. Analyze the companies closely
The management, leadership, performance and objectives of the company must be carefully studied, especially the real assets of the company, including the value of equipment and net assets per share.
The company's dividend is also very important and needs to be considered. If its allocation plan is appropriate, its share price can go to a higher level. If the company gives 90% of the profit, note that this is a dangerous signal and will not be shared next time.
7. Don’t fall in love with a particular stock
In this adventurous world, because there are many possibilities, people will be obsessed with an idea, a person, an ideal. In the end, the only thing that can fascinate people is the stock. But it's just a piece of paper that proves your ownership of a business, it's just a symbol of money.
8. Diversification of investment, but no hedging
Professionals use hedging to avoid risk in the day-to-day market, and sometimes new hedging is just a gamble.
If you insist on doing hedging and are sure that you have the experience to help you, remember to diversify it, to look at the whole picture and be sure that your rules are correct. If you want to diversify your investments, you should increase your income, such as capital, as much as possible.
9. Watch the environment
Watching the market allows me to find out when the market starts to decline and when it starts to recover.
The downturn in long-term interest rates illustrates the severity of the economic situation more than any other fact. Generally, if short-term and long-term interest rates start to rise, it is telling equity investors that the uptrend is coming.
10. Don’t follow the rules
It is necessary to change your way of thinking according to the changes of the situation. My view is that you should take the initiative to change according to the changes of economic and political factors. Technically, sometimes we can control it, but sometimes it's out of our control.
Everything is changing, and people have to learn to change. I have absolutely no belief that there will be an industry that will never change.
Source: https://zhuanlan.zhihu.com/p/99842365
Comments