When I recently read John Borg's book "Common Sense of Mutual Funds", it mentioned a word "common sense", and I was very puzzled why I said common sense.
Don't we even know the most basic common sense? If you do not eat breakfast, it will endanger health, the pace of eating should not be too fast, smoking is harmful to health, etc., which is casually able to say dozens of them, so it is a bit scornful
But when I read the back, I suddenly found that what I scoffed at was very important, because the author proved throughout that buying funds with the most basic common sense, no matter how advanced the technology used, how much managers were, was ultimately inferior to index funds
What does this mean? What does the author want to express? I closed the book and thought deeply, what is common sense? In the literal sense, it is to rely on simple intuition and facts to make correct and wise judgments
Make a "correct and wise judgment" very well said, we live in a large dye vat with various colors, it is very difficult to maintain a sober head, knowing that not eating breakfast is harmful to health, but in order to sleep more is not to eat, or hurry to gobble up, has long forgotten the most basic common sense behind the head
Now all we're thinking about is how to be comfortable, how to get what we want, how to get what we want quickly? Or take stocks, think about the stock market, why are most of the shareholders are leeks? It is because they never learn the basics of stocks, think about chasing hot spots, and never pay attention to what the company they buy is doing. Is it profitable every year? Not to mention, about the dividend yield of stock knowledge, the change in the price-to-earnings ratio. Look at why the financial management class on the market is hot, because the shareholders want to find a teacher, let the teacher recommend a few codes, and the rest is a brainless purchase, and finally it is unbearable
So we should calm down, slowly return to common sense, to see the essence of the problem, only in this way can we better stand in this society, what do we do next? Quite simply, use the golden circle of thought to ask yourself a few more whys, why are stocks rising? What factors are involved? What does these factors have to do with each other? When we keep asking why, we will be surprised to find that the rise and fall of stocks is ultimately inseparable from the most basic common sense
Not only stocks, all aspects of our lives are inseparable from common sense, take the house price, whenever the house price rises, some people will think that it is caused by factors such as speculation, mother-in-law economy, international metropolis, etc. according to the superficial phenomenon, but some people will use common sense to explain the most fundamental reason for the high house price, because of the supply and demand relationship, uneven distribution, scale effect caused, which shows why the state regulates, some houses have been falling, and some houses are still rising steadily
In the days to come, it is still necessary to calm down and study common sense well, not only to learn, but also to apply it to life, only in this way can we see the essence when we encounter problems