Learn to invest with Buffett

Chapter 53

Chapter 8 Section 5 Choose to sell when the investment goal is achieved
Occasional outbreaks of fear and greed, two highly contagious disasters, will perpetuate the investment world.The timing of these epidemics is unpredictable, as is the duration and degree of contagion of the market delirium they cause.So we can never predict the coming or going of any kind of disaster, and our aim should be appropriate: we are only to be fearful when others are greedy, and greedy when others are fearful.

--Warren Buffett
Buffett has handled at least hundreds of stocks in his life, but his big profits always come from companies with durable competitive advantages.His long-term investment philosophy makes him always hold stocks for a long time and never sell any stocks in his hands easily.Of course, he does not stick to the long-term and do not know how to adapt. Once the stock price is high enough and the investment goal is realized, he will also sell his holdings.As a highly respected myth in the stock market, Buffett's way of advancing and retreating appears to be quite flexible.

The most difficult thing for investors in the stock market, whether they are fund managers or ordinary retail investors, is their own greed.When the stock market adjusts and falls, they panic and are often at a loss. They follow the news and the so-called "bankers" to rush in and out, do not make rational analysis of their behavior, and suffer heavy losses as a result. When the stock market is rising, they hope that they can buy Their stocks go up again and again, hoping that the market will go up without a peak, and hope that their stocks will reach the price they set for them in the short term or even never. Suddenly the situation changed suddenly, and it began to fall, instantly turning the gains already in hand into ashes, leaving eternal regrets for myself.

The most important reason for Buffett's success is to be rational, stick to his own investment philosophy, take the opportunity to choose investment targets when the market is in a downturn, and wait for the opportunity to buy.When the market is rising wildly, be calm and not greedy. Once the stock price reaches your profit expectation, you will decisively take profits.

In the stock market, when the stock market rises, the closer it is to the peak, the slower the rise.This gives investors more time to judge the market trend and sell stocks in time.When the stock market reaches its peak, it may linger for several weeks or even months, instead of falling as soon as it reaches the peak.This phenomenon adds a certain degree of difficulty to the correct judgment.At this time, economic indicators may still rise, but if the stock market is ahead of the economic indicators, it is likely to be at the end of its battle, and it will not go up much.

If you sell stocks at the end of the stock market cycle, although you give up the rise in the end period, you also avoid the risk of staying in the market for too long due to unclear understanding of the end period.This is a smart move to preserve vested profits.

Investment motto:

An investor without an investment objective will not have a systematically generated objective or sell signal.If you want to succeed in investment, once the stock price reaches your expectation, you should consider finding the right time to exit.

(End of this chapter)