For the original text referred to by Mr. Ge Ba, please click “Thinking cannot be outsourced“.
First of all, please see Ge Ba’s view in italic blow:
Regarding your argument that “thinking is important”, I think it is difficult for anyone to refute it. I want to share my extended “thinking”.
Is it possible to be a successful investor without having to “think” like this?
What I mean is, if thinking is so important, please don’t forget, before thinking, you must collect enough information to read, and you must be able to read the collected information to think deeply. These things are brought together to make “success investing” become an extremely difficult job (think about it, how many people can really understand “financial statements”? And how many people are really capable of understanding the companies they invest in?)
In fact, investing is so difficult. No wonder Buffett suggested that most people should only invest in “index funds.” Moreover, I think that except for a few professional investors, most people who read your blog articles should not invest in individual stocks at all if they cannot read financial reports and cannot think independently, right?
However, Ge Ba found some exceptions. I wonder if you have heard the story of Ronald James Read, the cleaner, and Grace Groner, the young secretary? I’m not sure if the two of them know how to read financial reports and second-level thinking (probably not!), but I’m pretty sure they know that they only need to “buy stocks in good companies” and stupidly “hold them for a long time and don’t sell them.” , So there is a chance to get rich (at least they do so).
Of course, the real situation is more complicated than this. For example, someone must be able to cite examples of holding stocks of “good companies at the time they bought” and turning them into wallpaper; and how to hold several companies… and so on.
What I want to say is that if you have to “understand the financial report” and “think deeply” in order to invest, Ge Ba feels that it is very unfair to many people.
Is it possible for us to just advocate everyone “those are good companies that can be held for a long time”, so that the patient and persistent general public can implement the “buy right and hold on” strategy in a disciplined manner (they implement the coffee can portofolio ), just like planting trees, 15 or 20 years later, these patient people can also enjoy the opportunity of a great leap forward in wealth multiples.
After all, it is relatively easy to know “those are good companies that can hold for 15-20 years.” Andy, you should be able to tell a lot about it and share it with everyone.
For such an investor, he only needs to do two things, “know which companies can invest for 10-20 years”, “buy and don’t sell”, and add at most: buy 5-10 companies of this type in a diversified manner. In doing so, ordinary people don’t need to read financial reports, don’t need to think deeply, don’t need to be charged by fund companies, there will be no impact on fund companies’ protofolio rebalancing to lower performance, and there is no need to pay taxes to the government for buying and selling.
Andy, do you think the average person has a high chance of getting rich if he implements such a strategy? (Sorry, the article is very long).
Andy’s feedback to Ge Ba below:
Regarding your opinion:
- Your view of the entire article is really good, and I agree with you.
- The reason why I write very rigorously (for details, please refer to my blog article “Necessary Conditions for Successful Investment Trilogy“), mainly because I want people who are interested in investing in the stock market to have a long term, validated by many successful masters, and can have a successful roadmap to follow.
- You did point out that “long-term investment is the key.” In my blog article “Why long-term investment?” In the last sentence of “, I wrote a special epilogue, “Finally, just choosing two or three stocks in your life can make you very rich; you don’t need to hold too many stocks, but the premise is to hold for a long time, otherwise any super growth stocks will only be what you once possessed.”
- If under actual circumstances (such as the situation mentioned in your article), active stock selection cannot be used, a lot of effort can be saved, which is more in line with the operability of most people. I personally wrote a lot of articles on the blog, or when I had the opportunity to talk to my friends about investing in stocks, most of them I advised them to buy ETFs that track the market, and don’t sell them under any circumstances. This is the reason. But not many people are willing to listen.
- Yes, for those who are confident that they want to take the initiative to choose stocks on their own but do not want to invest in ETFs, this is why I wrote the blog post “Good companies are rare, two or three will make you very rich. Take Texas Instruments as an example“. As long as you choose a company that is worth investing in, keep buying, and you don’t have to consider when to sell, you will definitely get rich. Such a company is not necessarily a newly listed company (I just advise everyone not to touch it), carefully study the listing stocks in the market. However, most people think that stock has been listed for a long time, the market value is too high, the stock price is too high, and other reasons, they are unwilling to buy it. It’s a pity. I have mentioned in many articles that a good company will still be a good company after three or five years, because a good company that can help investors get rich must be a company that can exist for a long time. This seems to be ignored by many people.
- More than ten years ago, I read a book “Grande Expectations：A Year in the Life of Starbucks Stock” on the market. It’s talking about buying Starbucks, the author’s intention behind it was exactly this. Ordinary people, even if they don’t buy ETFs and buy stocks in companies like Starbus (ticker: SBUX) or Nike (ticker: NKE), they can succeed in getting rich in the long run, and they don’t have to buy too many companies, 2-3 is enough. But as you said, the key is to hold for a long haul, keep buying, ignore the short-term noise in the market, do not sell, buy hard.
- The cleaner Ronald James Read and the secretary Grace Groner, yes, I cited three successful long-term retail invesor cases in my first chapter of the book “The Rules of Super Growth Stocks Investing”. These two are two of the three I listed in my book.
Finally, thank you for your message on this article, which has benefited many friends, including myself of course.
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