Text / Xiao Zhigang

In the A-share investment, the word value investment cannot be avoided. After all, the stock itself is an imported product. It is a proper meaning to apply the western advanced theory in this respect. In particular, the Chinese believe in the principle that the winner is defeated by the king, and Buffett said that he relies on value investment, which completely lays the position that the winner of the value investment in the hearts of the A-shares is the leader of the defeat.

According to the business model, we can first position the stock investment in the secondary market as time arbitrage, corresponding to space arbitrage. Let's talk about space arbitrage, which means that there is a price difference in different spatial locations using the same commodity, and the arbitrage is exploited by this spread, which is the case in most industries. Time arbitrage refers to the difference between the same thing at different points in time. The arbitrage of this spread is mostly financial investment, especially the stock investment in the secondary market.

Stock investment, a natural time-dimensional business model, carries out arbitrage now and in the future, so predicting the future becomes an inevitable requirement. By studying past rules and current information, to predict the future, and then through transactions, to achieve profits, this is the whole investment.

Therefore, the investment can be decomposed into two parts: research and transaction. The purpose of the research is to predict future opportunities. The purpose of the transaction is to convert the research results into profits to the greatest extent.

 I. Value investment at the transaction level

Let me explain the transaction first. Suppose we carefully study and predict that a stock can rise from 10 yuan to 20 yuan, and the potential yield is 100%. Now tell a lot of fund managers, the ultimate income of the fund managers in this stock will be huge. If you earn 100%, you will earn 50%, you will earn 5%, and you will lose money. The reason for the difference is not at the research forecast level. At the transaction level, different managers have different trading styles. Some people quickly believe the researcher's recommendation, 10 yuan full position buy, some 10 yuan tentative buy, etc. It is only 15 yuan to buy full; and the 10 yuan full warehouse is likely to be sold out to 15 yuan; those who want to wait until 9 yuan to buy again, maybe dragged to 15 yuan to start chasing. Therefore, a good trading style is a revenue amplifier, and a poor trading style can offset the research results.

In general, we can observe the trading style of a fund manager from four open dimensions, namely, the holding period, the trading time, the position weight, and the combined deviation. These four dimensions are independent of each other. For different fund managers, 16 trading styles can be combined, as shown below.

They are all talking about value investing, but do you know what a real value investment is?

According to the widely accepted view of the public, the long-term holding period can be regarded as value investment. Those with short holding period are not worth investing; the left-hand style of trading, the high-low-selling and low-sucking value investment, always on the right If you have a hundred stocks in a portfolio, if you have hundreds of stocks in the portfolio, you will not be worth investing in the position of the stock, and it is generally optimistic about the company. All in in, is called value investment; in the end, those combinations are all in a certain section, such as liquor or military, can only say that this is a gambling track, value investment is generally balanced configuration, Do not put the eggs in a basket.

Such an analysis only knows that in China, in the A-share market, the term value investment in the public psychology may be closer to a positive vocabulary, representing positive, good, positive energy, and safe investment. Therefore, in the A-shares, the most positive trading style is actually the first one, that is, long-term shareholding, the right to buy and sell on the left side, the stocks on the stocks, and the balance is the most positive, most positive, and the best. The most positive energy, the safest, the most reassuring... a style, if this is not a value investment, what more arguments?

Next, the second style, that is, long-term shareholding, the right to buy and sell in advance, the stocks also heavy positions, but the configuration is relatively deviated, such as white wine. Some people think that they are too deviated, they can't be worth investing. Those who can support it will think that this is also a long-term shareholding. It is also a trade on the left side. It is also a heavy position. How can it not be called value investment? Even if you don't recognize this as a value investment, then this style is positive, good, and positive. Ok, then there is a certain amount of value investment.

This is good, among the 16 trading styles, in addition to the 16th style, that is, short-term holdings, chasing up and down, buying a little bit for each stock, and buying a whole plate, this hot-spot-style hype style, most Sorry to say that you are a value investment, and other dozens of trading styles can be more or less claiming to be value investments, at least some of the value investment components.

The reality is that most institutional investors generally claim to be value investors. Anyway, no one has to go to the bottom and don’t know how to plan. When it comes to propaganda, it is even more, earning money, as long as it is not earned by the 16th style, it is earned by value investment, no problem.

Summarizing this, you can clarify another problem by the way, whether the investment is science or art. If the investment is broken down into research and trading, then the research is scientific and the transaction is artistic. If the investment is anti-human, it is mainly reflected in the transaction level.

It's hard to switch freely in 16 trading styles. It's good to switch in one dimension. For example, in the valuation of the upside, chasing up and down is an enlarged trading style, and in the downside of the valuation, chasing up and down is very bad. At this time, it should be high and low, but there are several people who can do it. After a while, chasing up and killing, and then throwing high and low sucking? Some fund managers hold hundreds of stocks, must see three times the chairman, and buy two points for the day, let this kind of people buy ten points? Even if he is listed in a listed company every day, he does not dare. This is the so-called anti-humanity.

Second, research value investment

Come back and talk about the research, that is, the prediction. According to the simplest decomposition, the stock price fluctuation can be decomposed into EPS and PE. The prediction of EPS needs to study the so-called fundamentals, that is, the factors that will affect the company's profits, including industry supply and demand, and enterprise competition. , technology trends, policy trends, management changes, etc. In predicting PE, it is necessary to study the funds that will affect the participation in individual stock transactions, including the total amount of funds in the whole society, the total amount of funds participating in the stock market, the amount of funds participating in a certain sector, and the amount of funds participating in a certain stock. Can be summarized as the trend of funds.

The usual investment includes stock picking and timing. Some people choose the stock first, and then choose the time around the stock, the so-called bottom-up, band operation. Some people judge the trend and direction first, and then choose the best stocks. This is called top-down. In fact, there is no such order, and you can't avoid these two problems.

I am often asked why I bought this stock to buy that stock. If I answer some reasons for optimistic about those companies, I feel that such an answer is not convincing enough. The convincing answer should be that, looking at A shares of more than 3,700 stocks, I think this stock is the best. In fact, I didn't do it, and I couldn't do it. It was like 3,700 girls in the whole school. I didn't have time to get to know each other and graduated.

In reality, everyone's approach is to classify different dimensions, such as by region, by constellation, by blood type, by hair length, by profession. In the end, 3,700 companies will be able to separate hydropower, thermal power, wind power, nuclear power, photovoltaics, etc. according to their business. According to this calibre, they can also be divided into hundreds of sub-sectors, which are still not fine enough. Therefore, with the division of thicker lines, the most common is divided into growth stocks, value stocks, cyclical stocks, consumer stocks, etc. This is like dividing the girls into the South, the North, the engineering, the liberal arts, which seems to make sense. In fact, There is no practical guidance, but everyone is happy to talk about it.

Regardless of the method, good or bad, in short, everyone finally found their own way, and every investor found his favorite stock. Whether the investor is based on big data, or diligent research, the EPS is calculated, but it may often lose money, because the decline in PE is greater than the increase in EPS. At some point, EPS has not increased much, but the stock price has risen sharply. Everyone will be attributed to capital preference, market style, and in fact, PE has risen sharply. Many investors are very coveted. Behind PE fluctuations is the driving of funds. The back of the funds is driven by investors. Therefore, many people attribute the fluctuation of valuation to the art level, which is anti-humanity, and EPS is on the scientific level. This is not true. If you accept the trade mentioned above is art, then the valuation is not art.

What is the fluctuation of the valuation? Going back to the example of finding an object, if the study of EPS is external beauty, then PE is the inner beauty. Some people who look at the external beauty to find the object, some will find that the inner beauty is not good, this is like the stock selection, clearly the performance growth is determined, the result valuation fell from 50 times to 15 times. Comparing the valuation to the inner beauty is to show that this is also a rule that is part of the social sciences and belongs to the scientific category, not the art category. If inner beauty is not art, then what is it? How to chase, this is art.

By separating the external beauty and the inner beauty, we can divide the research style into two kinds, one is to study the style of EPS, and the other is to study the style of PE. The common investors in the market who focus on fundamental research are actually the styles closest to value investing in the research level. They avoid the volatility of PE research, and they only earn money for performance. This kind of research value investment In fact, it is the beauty control, only to look at the outside beauty and ignore the inner beauty.

Third, values ​​and investment

There is a saying that investment is essentially a cognitive realization. This sentence is a static description of the phenomenon. If from a dynamic perspective, the fund manager should actually raise the level of cognition as much as possible and establish a scientific worldview system. In order to achieve more sustainable and deterministic benefits.

However, the real world is too wonderful. The only constant in the market is change. The main contradiction at each stage is different. It is like we want to predict where a taxi will go next. The real difficulty lies in not at all. Know who the next passenger is. When we still hold Trump as the main contradiction, it is clear that this major contradiction has been turned over. What is the next major contradiction? really do not know. Instead of being so passive, it is better to focus on the driver's movements and to become passive and active.

Is it enough to establish a scientific worldview system to predict external beauty and inner beauty? This is still a research topic. At the transaction level, there are positions that are constrained. Once there is a realistic constraint, the world view will no longer work. Instead, it reflects the power of values ​​and reflects value.

The world view is just how we stand in the perspective of God and see how the world works when we go to see it. This time is detached. The values ​​are how we participate in the operation of the world. At this time, there is a real constraint, and we can’t take it off. At this time, under the realistic constraints of the position, the test is how to choose between good and bad, and test how to choose between good and good. Just like "I am not a drug god", the protagonist should choose between respecting intellectual property rights and saving lives.

(The author of this article is Xiao Zhigang, the director of stock investment of Tianhong Fund, Tianhong Yongding Growth, Tianhong Strategy Select Fund Manager.)

Risk Warning: The above opinions are for reference only and do not constitute investment advice. The market is risky and investment must be cautious!