Bernard Baruch’s famous saying “Don\u2019t try to buy the lowest point, sell to the highest point. No one has a way to do this, except liars.”<\/span> In short, the stock market is not a science. Don\u2019t expect certainty or formulas. In the past hundreds of years, countless people have found out, there is no formula, and no one will find any formula in the future. But there are still some methods or rules of thumb for investment success.<\/p>\n\n\n\nHuman civilization continues to progress. The stock market is an activity that everyone participates in, showing collective consciousness and ideas. As long as there is an idea in the stock market (such as the disclosure of major information from listed companies, wars, and important laws related to the industry) with a high probability of immediate profit (this can be regarded as a short-term investment success), it will definitely usher in the imitation of all investors will cause this idea to be profitable and invalid, that is, everyone will immediately follow up (for example, once the acquired company is disclosed, the stock price will immediately rise to close to the offer price). And if the same behavior is repeated in the future, it will no longer be effective, because it is impossible to have the same person, event, time, place, and thing sitting and reappearing for you to copy. But our social, economic, and political situation, these influencing factors are changing all the time — including human nature, the masses, psychology, daily life, economic supply and demand are more related; not like physics, mathematics, engineering, etc. The knowledge in natural sciences can be verified repeatedly with mathematical formulas, with 100% identical, and correct answers.<\/p>\n\n\n\n
This is why Keynes said: There are two major uncertainties in the market: “speculation and the animal instinct of human nature”, that is, from people’s “involuntary impulse to act”, it is not determined by basic rationality and knowledge. It cannot be calculated by mathematical formulas.<\/p>\n\n\n\n
Buffett said, “Guess the market, that’s what God is doing.” A hundred years ago, when the great banker John Pierpont Morgan was once asked by a young man for his stock market forecast, and he famously replied: “<\/strong>Young man, I believe that markets will fluctuate.”<\/p>\n\n\n\n<\/span>What are the investment behaviors?<\/strong><\/span><\/h2>\n\n\n\nThe following common investment behaviors are actually typical operations trying to find investment formulas:<\/p>\n\n\n\n
\nSuperstition in quantitative investment: retail investors are completely unsuitable for this type of investment method designed for Wall Street or super institutions.<\/li>\n\n\n\n swing trading: Be smart, think that you are comparable to God, can accurately predict stock price trends; back and forth operation can make both ends.<\/li>\n\n\n\n Trying to find mathematical formulas from historical data: Believe the superstitious of science, thinking that he or she is smarter than all human beings in the past hundreds of years, and insisting on using his or her own power and ingenuity to find mathematical formulas to predict stock prices and markets trend.<\/li>\n\n\n\n Bragging about financial models: Almost all financial models are expressed in Greek equations and explained by so-called financial experts. In fact, most of them are cheerleaders of financial management professionals. Anything with Greek letters, calculus, advanced mathematics, or mathematics beyond addition, subtraction, multiplication and division is useless in investment, and spending time on it is just wasting your time means that you are the leek and fooled by liars.<\/li>\n\n\n\n Any prediction: All inferences without factual basis are untenable in investment; whether expressed by mathematical formulas, or predicting the market and the price of individual stocks.<\/li>\n<\/ul>\n\n\n\n<\/span>What investors should do?<\/strong><\/span><\/h2>\n\n\n\nJohn Templeton said “Success leaves traces.” There is no formula for investment success, but there are methods; what we want is to find the method by ourselves, not relying on the stock touted by celebrity. It takes time and a lot of effort to find your own successful investment method, but once you establish your own investment method, these costs are worth it, because you have found the key to invest success.<\/p>\n\n\n\ncredit: Pixapopz<\/figcaption><\/figure>\n\n\n\n