Wait for investment opportunities, not chase investment opportunities

Howard Max said, "You'll do better by waiting for an investment opportunity instead of chasing it." Picking among the things that sellers are actively selling, rather than clinging to the idea of what you want to buy, your deal will tend to be more cost-effective. ”

In the stock market, what is missing is not opportunity, but patience. After all, in this tempting secondary market, which rises and falls every day, it is extremely difficult for most people to do nothing!

When the stock market rises, investors often can't control the impulse of the heart, rush to sell, and then the price of assets is often not cheap, the expected yield in the future will be reduced accordingly, and even the price of many stocks will seriously overdraft the future performance growth. Because many investors do not strictly adhere to the principle of "margin of safety" in value investing, it eventually leads to the failure of investment.

On the contrary, when the stock market falls or even falls sharply, most investors begin to panic again, rushing to sell their assets, often at a lower price. And this is the perfect time for value investors to take a shot.

But as Graham puts it, "When stocks are cheap, those who have the guts don't have the money, and those who have the money don't have the guts." ”

Buffett once gave the example of a baseball game. Presumably, the rate of hitting is higher only if the best position is hit, so just wait patiently for the best point to appear before swinging the bat. But unfortunately, baseball gets out of the game with three strikes if it doesn't hit three shots, so you can't wait forever.

But fortunately, in investing, patience doesn't get you out. You can wait for the perfect investment opportunity to emerge before you swing your bat, rather than investing your money in mediocre or even bad opportunities, and these transactions are the fundamental factors that make you lose money and eventually get out.

We must clearly understand that you do not need to beat the market every year, you just need to beat the market in the long run.

Waiting patiently may make your returns in a bull market slower than your market performance, because the price of the asset is high at this time, and there are fewer opportunities for value investors. However, this also reduces the risk of permanent loss of your funds, and I believe that what we cannot afford is a big loss than making less.

People's big losses in investment are often due to inner impatience and greed, hoping to quickly become rich, seeing opportunities and wanting to seize, then naturally ignoring risks, and value investment is exactly what needs to be done is to control risks, on this basis, to obtain reasonable returns.

Stick to the principle, although there is no guarantee that you will make a lot of money every year, but time is on your side, and as time lengthens, your long-term rate of return is amazing, because there is compound interest. But after the big loss, it may bring you a fatal blow, and it is difficult to go back!

Always remember Buffett's reminder, first don't lose money, second always remember the first!

Patiently wait for the opportunity to appear, instead of chasing the opportunity, in the long run, you will do better!