Snowball Special Issue No. 015: Looking for Ten-fold Stocks

Chapter 5 You must understand the characteristics of growth stocks

Song Chengjun, individual investor, published on February 2012, 2

If a company's financial statements have reported continuous high-speed growth, then the company's growth has obviously been basically established, and correspondingly its stock price must have been greatly raised by the Davis double-kill effect.Investing in such stocks, although the security has increased, the return has been greatly reduced.In a promising market, how to find the last one or two market winners among many companies with balanced strengths?How to find the next Suning, Xinhecheng and Longjing?

The biggest risk of investing in growth stocks is the uncertainty of the future. To resolve such risks, you may not be able to find the answer just by looking at the previous reports.In my opinion: a market participant who is interested in winning in the end should have the following basic characteristics:

(1) The management is strong and sober, and in most cases such a management should be low-key.

(2) There is at least one main product in the main business or it has achieved amazing success in a certain regional market, which can verify the advantages and replicability of its main product or business model.

(3) The main business is clear, and continuous investment is being made in the main business.

(4) Dare to face up to difficulties, be good at detail innovation, and like to take the initiative to initiate dislocation competition.

(5) Strong awareness of cost and internal control.

Wonderful comments:

Snowball user chenke511:

I think it is very difficult to find growth stocks. For example, the three companies you mentioned: Kelun was listed for less than two years, but it was super expensive when it went public; The gas control policy is still immature. Unless you are a veteran in the industry, at that time who knew that the total amount control would bring such a big market for dust removal and desulfurization. Although it grew every year, it almost returned to the opening price on the first day after 3 ; Only Suning may be the only one that ordinary people can study to see great development in the future when it is listed, but among the thousands of stocks, there is only one Suning.

Song Chengjun replied to chenke511:

Finding growth stocks is indeed difficult, but what is really difficult is not finding it, but continuing to pay attention to it patiently.There is a saying "Don't focus on the market's next two years, but its 10 years".The growth trajectory of Longjing fully illustrates this point.It is the general trend that the environmental protection market is getting bigger and bigger. Although Longking’s performance was flat in the past few years, it is growing year by year, and its operation and management are maturing. Therefore, if we continue to pay attention to and invest in Longking from 2001 to 2007 If so, the risk will only become smaller and smaller, and the possibility of profit will become larger and larger.

Looking forward to finding a dark horse in the future and investing money in it all at once, and then waiting for 10 years to make a fortune, what is the difference between that and waiting for a rabbit?I really like the saying that @穿云狐大哥 compares himself to a farmer and the stock market to farmland.No pain, no gain, what to do when spring comes, and what to do when autumn comes, we should all know.Hard work and patience are important.

(End of this chapter)