Investment is the realization of cognition


As an excellent investor, you must have the following characters:

First, investment is a game of probability. What an excellent investor needs to do is to wait for and identify the right opportunities.

Second, time is the most valuable weapon for investors. It is the most wonderful thing to make friends with time and wait for time to bring value and valuation growth;

Third, it is always difficult to recognize your ability circle. Knowing what you know and don't know, and being willing to admit it.

Fourth, greed, hatred, ignorance, suspicion and slowness are human nature. The securities market has magnified these weaknesses for countless times. In addition to cognition, a good system is required to ensure the implementation of correct investment. This is the importance of system.

Your external investment performance is determined by your inner world. What kind of person you are, your net worth will show what kind of curve.

You may have gradually formed your own "investment system" according to your understanding of investment and the world. This system will receive various information from the market. We start to invest such as buying, selling and holding. The output of this system is your investment income. This process is also the process of "realization".

The "investment system" can be seen as the concrete result of our "cognition": what kind of person you are and what kind of world you see. You will form a corresponding "investment system".

If you are an "analyst" and think that the market is an image and the real important thing is the business world, you will pay more attention to the company, business model and corporate culture. You will like to read the books of Warren Buffett and Charlie Munger.

If you are a "trader" and think that the stock price is the result of a group game, you will pay more attention to how to judge the public sentiment.

If you are an "actuary" and think that investment is a game of numbers, it is important to build an investment system of "no prediction, only response". You will give up in-depth research on specific enterprises and pay more attention to probability and odds.

According to our different personality, knowledge and world outlook, we gradually form our own investment philosophy. At the same time, we increase our cognition by this investment philosophy and form our investment system.

When it comes to "cognition", we have to mention the ability.

If someone wants to invest, it is very important to be honest with oneself. However, most people overestimate their cognition.

What matters is not how much you know, but what you know is right. Only those right things can finally be realization as your income.

If you agree that the bottom income of the stock market ultimately comes from the economy and the company, know that the stock price will reflect the internal value of the company in the long term, and understand that market is the short-term pricing of stock prices, you have a preliminary understanding and ability.

If you have this ability, you will choose index funds. You dare to buy in a bear market. You also know that a bull market is not a good time to invest. You also know that you can get an annual income of 8%~10%, which is the result of the wealth accumulation and growth of the whole society.

As you learn more, you will gradually expand your ability range.

Only by establishing basic cognition, can we reduce the risks in investment and obtain good investment returns.