The farm or the dairy farm, which one you choose, determines whether you can make money from the market

Farms raise cattle to sell for a good price when they grow up, and dairy farms raise cattle to milk cows. The former can only earn the difference in the middle by buying and selling, but the transaction can only be carried out once, while the latter can have a steady stream of milk production, which of these two ways of raising cattle, which will you choose?

These two ways of raising cattle are like we invest, one just to earn the difference, the other to get cash flow. I guess a lot of my friends are like me, of course, hoping to get cash flow. But the vast majority of investors in the market invest in the first way. According to the principle of 7 to 2 draws and 1 profit in the market, the method used by the vast majority of people is bound to be within the range of 7 to 2 flat. If you want to make money from the market, you should always stand against the majority. Try a different approach, and maybe there will be different results.

From time to time in the market, we may hear people showing off how much they have made once, but even in the second year, these people will be invisible. It is still possible to do it this way once or twice, but if you want to do it right for a long time, it seems that no one can really do it. On the contrary, those who are usually silent, the market is often lying flat, but can be alone, in fact, not how cattle they are, but they are using the thinking of the dairy farm to do asset investment, this part of the investors do not pay attention to the stock book price, only care about whether the cow is good or not, whether the body is healthy, whether they can squeeze out milk stably, as long as they are not short of money, and this basic condition is still there, they will not take the initiative to sell. Because they know how long it will take to get the principal back according to the cow's milk production efficiency, they have a stable mentality and are more likely to stay in the market for a long time.

Just like investing in real estate more than ten years ago, in the case of a relatively high rent-to-sales ratio and a rental income that completely covers the monthly payment, then this house is equivalent to a cow, which can stably output cash flow to us. So it was very cost-effective to buy a house at that time, of course, whether there is still such a real estate market now, I will not discuss it here.

Many people in the market lose money, the main reason is to focus on the farm thinking, either cutting meat to others, or being cut by others. Generally after a round of stock market surge, many investors will become fat and strong, a cow in the farm, has eaten fat and strong, what should they do correctly? It must be a hurry to run, as long as it can still run away, then the fertilizer that was eaten before, even if it is free to eat

Unfortunately, in reality, many people are willing to be cattle in the farm, and even often see other cattle eating fat in other farms, and they are willing to run to their farms to eat grass, reflecting that the stock market is the more the stock market is to the top, the more you will see the money of the depositors move, and the money will flock into the stock market. For example, in 2015, people who rushed into the market after 5,000 points also included buying coal a while ago and chasing new energy are basically the same mentality.

Seeing others making money should never be a reason for them to enter the market, but should be used as a negative signal. In any bull market, the more violently it rises, the more people may end up losing money

Of course, there are also investors who pursue cash flow in reality, such as Buffett, Pidlinch and other masters, who usually do not show mountain dew, and there is not so much bloody rain. It's because every time they go crazy in the market, they run away early. But when everyone was crying and shouting and cursing the evil stock market, they ran back to get the goods at a low price, and other times they lay in the market, barely moving, and grew up with the company.

Therefore, Buffett said that people who like to pursue capital premiums and earn the difference in price are the most stupid, and most of them end in tragedy in the end. Many companies have no profits, the price can also be speculated in the sky, and then there will be many people in the market who continue to explain the reasons for the high price, giving us a lot of seemingly reasonable reasons to buy, which is actually a foolish behavior, that is, there are no other fools to come and take over after the bet. At the end of the bull market, this is the case everywhere.

Investment is to use today's money, in exchange for tomorrow's steady stream of income, the focus is on income, not the money earned by selling in the future, if you can sell at a high price, it is better, adding to the investment icing on the cake, but if the price does not rise, we should think about whether this investment can recover the investment principal through cash flow.

In fact, as long as we focus on cash flow, then investing in a company that can generate stable cash flow every year will inevitably have a good premium space in the future. That is to say, even if you are not thinking about earning the difference now, there is still a high probability that you will earn the difference in the future. For example, the companies in the A-share market that continue to generate cash flow, liquor, electrical appliances, and pharmaceuticals, their stock prices have risen several times. On the contrary, if you have been staring at the capital premium, you often can't find a few opportunities to make money.

We are talking about cash flow thinking, that is, we want to tell you that investment should focus on the company's performance, see the core of the investment behind the thing, do not just stare at the price, the price does not reflect much valuable information, but will give us a lot of interference, let us make a lot of wrong decisions.