The book that had a profound impact on my investment (1)

Some of our readers leave messages asking me to recommend some investment books that they have read.

This reminds me of my experience when I stepped on a lot of pitfalls and was confused in my early years. At that time, I was in great pain, and felt powerless and sad about my repeated defeats, so I thought of reading some books by seniors.

I remember that the earliest book I read was Livermore's "Memoirs of a Stock Operator". This book is regarded by many people as a must-read book for investing. But the strange thing is that after I finished reading this book, the impression I left was not too deep. I don't know if it is because Livermore's experience of going bankrupt four times in his life subconsciously affected my understanding of this book. Cognition, so so far my feelings about this book are relatively average.

Next, I read a biography of Buffett by chance. Because I read this book too early and the title is very long, I forgot the name now. This biography was very attractive to me at the time, and it directly affected my later investment methods and thinking methods in many ways. In retrospect it appealed to me for two reasons:

The first one is a statistic in the book: After decades of investment by Buffett, the average annualized return is less than 20%, which is far from the impression of the so-called "masters" in my impression. Far, but what is important is that this seemingly low rate of return is averaged over decades. To be able to maintain this rate of return for such a long period of time is what makes Buffett so powerful. This point allowed me to see the power of the "ever victorious general", and it also made me no longer have the urge and envy for the so-called sudden wealth. And let me realize that investing is a lifetime.

Zhang Lei of Hillhouse Capital once said,Investment is like flowing water. Flowing water does not compete for the first place, but the competition is continuous.This is a true portrayal of Buffett's lifelong investment.

The second point is that Buffett clearly stated that for most ordinary investors, buying index funds is far better than buying individual stocks, and it is also better than buying some active funds.

This was a very direct driving force for me to invest in the CSI 300 Index. In the process of investing in the stock market later, I also saw the fact that many funds managed by so-called star managers eventually underperformed the CSI 300 Index. Another more ironic example is that after the 2008 financial crisis, Buffett publicly challenged Wall Street: Buffett bought index funds, and another so-called star manager who accepted the challenge took the initiative to choose stocks. Sure enough, the stock chosen by the star manager was not as good as the index fund Buffett invested in.

This book is very thick, I have read it three times, but the condensed essence and the most profound influence on me are the above two points.

Next, I read the "Smart Investor" by Buffett's teacher Graham. After reading this book, combined with my feelings in reading Buffett's biography, I began to try to accept entering the market in a bear market and buying undervalued stocks. Ways to value investment goods.

In addition to Buffett, Jim Rogers is also an investment guru I admire. So I started reading his book "Crystal Ball: Jim Rogers and His Investment Prophecy" as soon as it came out.

There are three things that really impressed me about this book:

One is that his description of Wall Street in the book completely shattered the original image in my mind of the so-called "investment elites" who are smart, rational, and invincible in the investment world, and made me understand that these so-called "elites" are many They all live on the inherent management fees of the fund, and most of them, like Xiao San, have changed their beliefs with the three positive lines.

The reason why they can enter Wall Street is not because of their high level in the investment field, but because of their impressive academic qualifications. And my own investment experience later made me realize that in the investment world, we don't really need such a beautiful degree or profound knowledge.

So since then, I have gradually realized that many so-called institutional investors are just small investors with large amounts of funds. I no longer have the kind of myths about fund managers, and I don't believe in the legend of "star managers", and I am more determined not to buy any active funds.

The second thing that impressed me deeply about this book is that Rogers confessed in the book that he was very bad at capturing price trends and judging short-term price rises and falls. And he also wrote that the price of many of his very proud investment products was not the lowest when he bought them, and even after he bought them, the prices were still falling, but looking back later, the timing of his investment was quite low throughout the long history low position.

His characteristics of not being good at capturing short-term price trends are exactly the same as mine, because I am also very bad at judging short-term price trends, and I often buy an investment product, and its price will continue to fall.

But Rogers believes that it is enough to ensure that the buying is generally close to the low level in the long-term trend.

This point of view gave me great confidence and courage and had a profound influence on me later.

The third thing that impresses me the most is that he is good at seeing big trends and capturing undervalued areas from public information that everyone can find.

I also deeply realized this in my later study and practice.

As I mentioned in the previous investment experience, I think the undervaluation of the Baltic Sea Index, the undervaluation of silver, the undervaluation of oil, etc. are all derived from Rogers' way of thinking.

This book also let me see that even the masters have many deficiencies, and they also have areas that they are not good at, and their success is more about the extreme use of their strengths. Therefore, success is not out of reach, because each of us has our own strengths, and we will be able to find our own position in investment by giving full play to our strengths.

So we find the field that we are best at, the most suitable investment method, and give full play to our advantages.