When investing in stocks, many people think that holding a good stock for a long time is a value investment. This stubbornness is actually very dangerous. Because in most cases, you think that a good stock is just a good stock that you think is good. It is not necessarily a good stock worth investing in, and it is not always holding a stock or a value investment.
First of all, we should clearly understand that among the stock markets with many stocks, there are only a hundred companies worth investing in. Among the 100 companies worth investing in, the companies that are worth holding and not selling are even rare. It can be said that there is no such thing. A company can guarantee a good profit in the future. Therefore, as the most taboo as an investor, it is the long-term one that insists that its stock is a good stock, that is, a company that is excellent and great in the future.
The steadfast holding of a stock by many people is actually misled by Buffett’s famous saying: “If you don’t want to own a stock for ten years, don’t consider owning it for ten minutes.” Many people understand this sentence that stocks should be held for a long time, and the great companies that they think should be held for a long time. This is actually a misunderstanding. Buffett’s premise is that the ten-year premise of holding a company’s stock is that the company deserves to be held by you.
Buffett's specific approach is that only 20% of the companies in his investment career are held for more than two years, and 30% of the company's holding time is no more than six months. It can be seen that the stock god is also observing at any time during the specific operation, and he will try to avoid some unnecessary risks.
Therefore, we should not blindly hold a company for a long time, and stubbornly think that we are right. There are at least two points that we should pay attention to when holding a company.
The first point is whether the company's quarterly operations are good. This can be checked through the company's quarterly report. If the business situation continues to decline for two consecutive quarters, then we must be vigilant in the next holding.