Hello, everyone.
I am Wind Shadow.
Then review my own investment failure cases, hoping to enlighten readers and friends.
(Past failure cases, you can click the link below to review: "Investment Failure Cases of "East Ejiao")
Today,100, I want to review the case with the most serious loss ratio in the early stage of my investment:
Owner appliances.
After about half a year of introductory investing, I came into contact with the concept of "growth stocks".
At that time, the "growth stocks" that were understood were very shallow, that is, stocks with rapid profit and revenue growth. (Of course, most of the stock prices have also risen faster)
By this standard, I found "Boss Appliances":
From 2012 to 2016, the growth rate of the company's net profit attributable to the mother reached more than 40% for five consecutive years.
Not only that, the company's ROE is also rising year by year. At the end of 2016, it has reached more than 30%, and its profitability is extremely strong.
The company's excellent operating performance is naturally also fed back to the stock price performance. The stock price of Boss Electrical Appliances rose from about 4 yuan in early 2012 to about 44 yuan at the end of 2017 (all of which were previously restored), with an annualized compound increase of about 50%, a veritable "bull stock".
Usually, such companies with excellent performance are difficult to buy at a cheap price. However, at the beginning of 2018, due to trade frictions and other reasons, the A-share mud and sand fell. The stock price of Boss Electrical Appliances also fell about 30% from the previous high point to near 35 yuan / share, corresponding to pe of about 26 times, and the quantile point was about 30%.
Excellent companies, because of the mud and sand led to a sharp decline in stock prices. Isn't this the legendary great buy-in opportunity?
Therefore, I started to open a large number of positions around 35 yuan.
However, what happened next really taught me a serious lesson.
Throughout 2018, the stock price of Boss Appliances continued to fall. At the end of the year, the stock price has fallen to less than 20 yuan, corresponding to about 13 times PE.
If it is only the market sentiment panic, resulting in stock price fluctuations, it is enough.
The crux of the matter is that with the disclosure of Boss Appliances' 2017 annual report and 2018 quarterly report, I found that its operating performance began to decline significantly.
In 2017, the net profit of Boss Appliances was only 20% year-on-year. In the second and third quarters of 2018, there was only single-digit growth.
As a "growth stock", Boss Electrical Appliances began to be questioned by the market. Therefore, in fact, the sharp decline in the company's stock price in 2018 was not only affected by the overall market, but also the company's own operating conditions, which underwent great changes.
After discovering this, I found that I did not have any judgment of the company's future performance changes. Therefore, it began to stop loss soon after, and in the second half of 2018, it was gradually stopped and cleared.
The entire investment span of "Boss Appliances" is about half a year. The average buying price is about 35 yuan, and the average selling price is about 25 yuan. (Due to the intermediate trading once, the actual displayed average selling price is slightly higher than the actual selling average price, and the actual average selling price is about 20 yuan)
Due to the "boss appliances", the position invested is higher. As a result, it was the largest actual loss I actually made in my upfront investment, with a single stock affecting about 10% of my total position.
After review, I think the main mistakes I made on "Boss Appliances" are:
1) Linear extrapolation of changes in the company's operating performance without brains. It is assumed that the company's future performance will be roughly consistent with the past, ignoring changes in the actual operating environment.
2) Insufficient understanding of "growth stocks", thinking that stocks that have grown fast in the past are "growth stocks", without realizing that investment is investing in the future, not the past.
3) When the stock price fell sharply, there was no careful observation of the changes at the company's operating level, nor did it analyze the reasons behind it in time after finding the changes, and take corresponding actions, resulting in a great delay in the timing of the stop loss.
4) For targets that are not studied deeply enough, too high positions (about 30%-40%) are allocated, resulting in a larger actual loss.
As of February 7, 2022, the stock price of Boss Appliances has risen to about 35 yuan, which is about 75% higher than the price of my stop loss, which is almost equal to the opening price of my position at that time.
From this, I think it can also be explained to some extent:
1) The company's research is not in-depth enough, and it is easy to lose confidence in holding shares, resulting in "cutting meat" at the bottom. Therefore, the analysis of the company's fundamentals is the fundamentals of value investment.
2) Growth stocks, for investment novices, the risk is larger, the margin of safety is smaller. Once the growth is falsified, the valuation will be very powerful. It can be seen that even if it has risen back to 35 yuan now, the valuation has reached about 18 times, which is not the same as the valuation of more than 30 times in that year.
The above is the mistake I made in the process of investing in "Boss Appliances", as well as related thinking and review.
Again, all of the above content only represents my personal views and opinions, do not use this as an investment decision, and do not mistakenly think that I deliberately smeared the relevant targets.
My personal investment failure case only means that due to my personal ability, I have incurred losses on a certain stock, which does not mean that the stock is not worth investing in, or the operation of the related company is problematic, remember to remember.
Finally, these previous investment failures seem to be more or less problematic in my understanding of the company's fundamentals. So, did I make a mistake in other ways that caused me to lose money?
The answer is yes.
Not only that, this mistake is also very civilian, which is made by the vast majority of friends who have just started investing in stocks.
What is the specific, let's sell a close first, and wait for the next article to share it with you.
I'll get here today.
Pay attention to me, do not step on the road to investment.