As ordinary investors, what are our advantages?
I have repeatedly emphasized that the most important thing in investment is not the mastery of professional knowledge, but the exercise of psychological endurance, independent and calm thinking and persistence in one's own investment strategy.
In fact, many investment masters have said this truth long ago, and have repeatedly emphasized it. I believe that many institutional investors and fund managers know it, but very few can do it in actual combat. Why?
Let's look at a real case.
This case comes from the movie "The Big Short" that reflected the 2008 US financial crisis that I mentioned in the article. "The Big Short" has a protagonist named Michael Bree. In reality, this real character is John Paulson who became famous in that crisis.
In the play, Michael Bury saw the clues of the financial crisis and then aggressively shorted subprime mortgages. But at the beginning of his short-selling period, the economy not only did not develop according to the crisis path he expected, but moved in the direction of continued prosperity. And according to his rules for shorting subprime mortgages, when the economic indicators go up, he shorts subprime mortgages not only fails to make profits but continues to lose money. So his strategy of doing the opposite was ridiculed by the whole company.
Finally one day, his boss couldn't stand his seemingly absurd behavior and rushed to his office to force him to throw away all his short-selling chips. He withstood the pressure and told his boss that according to the data he had, the United States had indeed fallen into an unprecedented crisis, which would break out soon.
His boss threw out the most ruthless words: The Secretary of the Treasury and the Chairman of the Federal Reserve both said that our economy is fine. Do you know the economy better than them?
Michael Bray still insists on his views. And his boss is still relentless. Under such pressure, Michael Bray finally reluctantly compromised and withdrew his boss's share of the investment.
In real life, Michael Bury's real character, John Paulson, faced even more pressure. Paulson recalled that during that time, he could not stay in his office every day, and could only go to Central Park in New York to run long distances to relieve his psychological pressure.
In the end, the financial crisis broke out, and he became famous in one battle.
What I admire most in this instance is his strong psychological endurance, especially when the external environment puts him under so much pressure, he can still stick to his own way.
This is the key to distinguish ordinary investors from investment masters.
After the financial crisis, Wall Street conducted a survey and tracked the data at that time. Interestingly, the data showed that there were not many fund managers who shorted subprime mortgages like Paulson at the beginning, but in the end they were like Paulson. There are very few people who persist in that way, and the vast majority of fund managers have thrown away their short-selling chips halfway through and completely compromised.
I believe that many of these compromising fund managers may not have changed their minds, but they may have compromised under the same external pressure as Paulson.
Almost all fund managers face such pressure.
We all know that the domestic securities industry selects the star fund managers of the year based on the performance of each fund in the year. The fund companies to which the fund managers on the list belong can use this result to attract more retail investors to buy their funds, so this result is very important to many fund companies. Therefore, all fund companies will try their best to get on the list, and the pressure will naturally fall on the fund managers.
As for the investment in simple targets like stocks, since there are not many derivatives as hedging tools in my country, the means of investment are often relatively simple, and investing with such relatively simple means often takes time and opportunity to obtain income, so Most of the time, the really good operation is to wait and hold in loneliness, instead of frequently looking for hot spots in the market.
For example, in a bear market, the overall environment is ruthless. In this case, it is necessary to find sectors and targets that can make profits in a very short period of time, and it is only a very small number of fund managers who can achieve such good results in a bear market. of. Therefore, if fund managers are forced to do this, most of them can only be forced to speculate. This is the dilemma faced by fund managers.
If they can't, they'll face the kind of pressure Michael Bree faced in "The Big Short." If there is a three-year bear market (such as the three-year bear market of A shares from 2016 to 2019), under such pressure, how many fund managers can withstand the pressure and stick to their original aspirations? I am afraid that most of them will become a flock of sheep chasing hot spots and huddling together to keep warm. Because it's the safest way - if you lose money, everyone loses, the boss can't blame me, if you want to make money, everyone makes money, and I can do business.
The same is true in the digital currency investment market.
I personally started to invest in Bitcoin and Ethereum during the bear market stage in the second half of 2018. From the second half of 2018 to the end of December 2020, Bitcoin broke through the previous peak, and it took almost two and a half years during this period.
During this period of time, we bought Bitcoin most of the time, and our accounts lost money. If we are dealing with the funds of a fund company, in this case, how would our boss feel when he sees us buying every day and making losses every day?
If we are faced with such pressure, how many of us can withstand this pressure and stick to the fixed investment for two and a half years?
(Thinking about blockchain, cryptocurrency, and investment. Welcome to exchange and discuss, author v: 730730)
(Thinking about blockchain, cryptocurrency, and investment. Welcome to exchange and discuss, author v: 730730)
