Opportunities in Crisis

There is an old saying in China: "The blessings of fortune and misfortune depend on the blessings of misfortune and misfortune". The main idea is that there are bad things in good things and good things in bad things. We should look at the problem dialectically. Today I want to talk about opportunities in crisis.

The investment market is effective for most of the time, only part of the time is invalid. If we want to obtain excess market returns, we must be able to find the opportunity of market mispricing, which often only occurs in the crisis. Discovering this opportunity is just the beginning. The key is whether you dare to act after you find it. To seize this opportunity is bound to be a minority, because in a crisis, there will always be a feeling of taking chestnuts from the fire and catching knives with bare hands. Here are some specific examples.

Liquor affected by plasticizer and Sangong consumption. The earliest time I studied liquor besides bank. Because I like the operating mode of liquor industry very much, with high gross profit rate, cash after purchase, unlimited prospects for consumer goods industry, beautiful balance sheet, no need for bank loans, and a large amount of money. Later on, I was waiting for the opportunity to start, because the valuation was not low. Later, due to the impact of plasticizers and the decline of consumption of Sangong, liquor began to kill performance, and I began to enter. More than 30 purchases of Luzhou Laojiao (also forgetting why I bought Luzhou at that time, instead of Wuliangye or Maotai), I went halfway up the hill, killing the performance and starting to kill the valuation, the highest set was more than 30%. Maotai's lowest price-earnings ratio seems to have fallen 10 times. There is nothing unique about it. The net value of Maotai's Doujitai Fund, which was regarded as a good place at that time, seems to have reached 0.3. Opportunities have come, but they are cut out, can only say that their involvement in the world is too shallow, reach for the knife, the results of all bruises. Now the liquor ushered in its own Davis double-click, first rising performance, then rising valuation, Wuliangye rose nearly nine times at the lowest point. It's only five years.

Gree in the stock market disaster in 2015. In 2015, the performance of Gree Electrical Appliances rose sharply in the annual report of 2014. After 10-to-10 changes in equity capital, there came two stops. Then, after the start of the stock market crash, it plunged by 50%, killing 10% of the dividend rate. Its market value was basically equivalent to its own monetary fund before it stopped. The 10% dividend rate has reached its extreme point, and it is impossible to fall any further. Unfortunately, after the stock market disaster has been concerned about but did not buy, and now the price of Gree is basically three times the lowest point, it is only two years.

Vanke in the Baowan dispute. Buying Vanke is a real pain in the middle. Bear market is not difficult. It is rare that any stock will rise in 2015, that is, Vanke is not warm, which is the most difficult. In the stock market crash of 2015, Baoneng began to step in and buy the largest shareholder. Later, Vanke's Wang Shi worked hard and stopped trading for self-protection. After the resumption of trading, Vanke dropped to more than 17 yuan at the lowest. More than 40 billion yuan of Baoneng was at the bottom. At that time, we could copy the bottom of Baoneng. I did not think clearly, or afraid, did not seize the opportunity.

In a crisis, it may be hard to find opportunities, identify opportunities, and take advantage of them. It is difficult to achieve excess returns. I hope that I can not seize every opportunity in the market in the future, but I hope that I can make a hard bet after I find the opportunity I have decided, so that I can live up to my investment.