I have written hundreds of investment notes, if God stipulates: "After your death, all the notes will be burned and disappeared. People will never remember what you once said, and you can only leave one for future generations." Then I will choose to leave this article without hesitation. I have been in the market for more than ten years, and I have contacted at least more than 2,000 investors, but less than 100 people have successfully achieved financial freedom, that is, the success rate is less than 5%. Those people in the financial industry are excluded here, such as investment bank elites and institutions. They do not make money by trading, but by providing services. I'm talking about those grassroots who started from scratch with tens of thousands of dollars and made millions or even tens of millions.
The structure of the article is divided into three parts. The first part is to discuss why it is so difficult to make some money in the market. My suggestion is to leave professional matters to professionals and stop messing around yourself. But the vast majority of investors will definitely not listen to my advice. They know that there are tigers in the mountains, and they prefer to travel in the mountains. Well, since you want to fight tigers, you have to correct your bad investment habits first, so there is the second part, which discusses the investment misunderstandings that 99% of investors will have. But just knowing your own flaws is not enough to fight tigers, you have to have a few brushes. So there is the content of the third part, that is, what factors are the prerequisites for success. Among the factors that affect investment success, which factor is the most important.
Part 1: Why is it so difficult to make money in the market?
We might as well adopt divergent thinking to explore the answer to this question. Why did Jack Ma, who is an e-commerce company, counterattack and become the richest man in China? However, entrepreneurs in the chemical industry cannot achieve a counterattack and become the richest man in China? Why have so many tens of billionaires been born in the Internet industry in the past ten years, but no tens of billionaires have been born in the chemical industry? Is it because people who work in the chemical industry are fools, and people who work in the Internet are geniuses? After thinking about it this way, the answer quickly surfaced: because the Internet is a new industry, and the chemical industry is an old industry. In an old industry, it is almost impossible for new companies to kill the old ones. Therefore, in these traditional industries, it is very difficult to become famous.
So we came to the number one law of investment in the world: it is very difficult for new players to make a fortune in an old industry!
So how old is the investment industry? The answer is more than 100 years. In the past 100 years, has there been a technological revolution in the investment trading industry? I think there were two times. The first technological revolution was chart technology, that is, technical analysis. The first batch of people who used technical analysis made money, such as Livermore and Gann. But those who imitated them later failed. The second revolution is value analysis. The first batch of people who used it made money, but those who imitated them later did not succeed.
It is also an old industry, why is the oil industry more profitable than the clothing industry? The answer is that oil is monopolized, while the clothing industry is an industry that is completely open to competition.
So we came up with the second largest law in the investment world: the lower the industry entry threshold, the lower the profit. To survive in a low-threshold industry, you must be the first to eat crabs.
I don't know if anyone has thought about a question: There are many generals who have read "Sun Tzu's Art of War" in history, but how many generals are there who have won every battle in the end? Basically zero. Could it be that "Sun Tzu's Art of War" is a big fool? Is it the same as not seeing it? In the same way, in the past 20 years, people who have imitated and learned from Buffett have followed suit, but is there anyone who eventually becomes Buffett's second? Maybe not. Could it be that Buffett lied to us and never told us the really useful skills? Many people may blame their failures on their lack of knowledge, but is this really the case? Is there no one in the world with a higher IQ than Buffett? No one is more diligent than Buffett? Is there no one who is more talented in stock trading than Buffett?
To answer the above questions, we need to introduce the third law of the investment world: trading is a zero-sum game.
What is a zero-sum game? It means that competitors must fight to the death, and only one can survive between you and me. If I live, it must mean you die. If you live, it means I am dead. Extended to the market, I buy means you sell, if you don't sell, I can't buy, until you are willing to sell and I am willing to buy, then the transaction can be made. The money I make must be the profit you lose. There is no result where everyone makes money and leaves. You can think of the market as a casino. Buyers and sellers are gamblers playing mahjong. When the game ends, someone must leave at a loss. There is no possibility that all four people will leave with a profit.
In a zero-sum game, the difficulty of competition depends not only on your own level, but also on the level of your opponents. Because you want to kill the opponent. If the opponent is mentally retarded, of course you can easily defeat the opponent, but if the opponent is as smart as you, then it will be very difficult. What's even more frightening is: your opponent will continue to evolve, because the opponent, like you, is a human instead of a pig!
This explains why after reading "Sun Tzu's Art of War" three hundred times, it will still fail miserably. After studying Buffett for 20 years, he still loses money in investment. Because your opponent has read "The Art of War" 500 times and studied Buffett for 30 years.
This kind of constantly evolving competition from the opponent will cause effective investment strategies to fail in a very short period of time, because the opponent will not fall three times at the same place, and you have earned him the first two times with a certain fixed investment method. After the third time, he will not be fooled again, and your investment strategy will become invalid. Therefore, there is no general victorious in the market at all, and all victories are time-limited, but some people's victories last longer, and some people's victories last longer. As long as your victory lasts long enough, then you will accumulate enough wealth to resist the next failure, for example, from 1 million to 100 million, and then plummeting from 100 million, losing 90%, leaving only 10 million , then you are still a winner in life. But if you start to fall from 1 million to 2 million, and lose 90%, you will only have 200,000 left, and you will be a loser in the market. The time for many people to win is too short, so they are all market losers in the end.
Any one of the three above-mentioned laws can cause 90% of entrepreneurs to fail. The cruelty of the market is that the three laws are in effect at the same time, so less than 5% of people who invest in the market and make a lot of money to achieve financial freedom . This kind of environment does not depend on human will. Even if you have an IQ of 800 and study trading for 48 hours a day, you cannot escape the constraints of the above laws. To put it bluntly, sometimes, you feel that you have worked very hard, but your ambitions are always unrewarding. In fact, the problem is not your own quality cultivation, but that you have chosen a path of no return from the very beginning. Life choices are more important than hard work.
Having said so much, I actually hope to dissuade 70% of investors. The market is not your cash machine, so leave now. But in the end, it is estimated that less than 5% of them can be persuaded to quit. People always have a kind of self-confidence, especially those who have done well in other industries, have spare money, and feel that they are very smart, so they come to the market to gamble. Bundle. The remaining 30% are actually engaged in securities-related work. Since I have chosen this industry, there is no way out. Is it possible to resign and return to my hometown to sell sweet potatoes?
Well, since you choose to stay and fight, you must first know yourself and your enemy. The next part of the second part, I just want to let you know yourself and the enemy at the same time, because 90% of investors will make the mistakes mentioned in it.
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Part Two: Common Fatal Mistakes Investors Make
1) Think of investing as a hobby, but expect to make money from amateur skills
I would like to ask you a few questions, "Have you ever gone to a karaoke hall to sing?"
"have!"
"Are you envious that Faye Wong earns millions of dollars just by singing a song casually? Why does she earn money from singing, but you still have to pay for singing?"
"Because the other party is a professional singer, I'm just a hobbyist."
Have you ever been to the gym to play badminton, swim or something?
have!
Why does Lin Dan get paid for playing badminton, but you have to pay to play badminton?
Because the opponent is a professional player, I'm just a hobbyist.
Do you feel so happy? reasonable?
Very happy and reasonable.
Well, my last question is: Since you regard trading and investment as a hobby, why do you expect to make money from the market instead of spending money in the market?
2) People shop around for a piece of toilet paper, but it only takes 3 minutes to review a transaction.
I know an aunt who told me that in order to help her son buy a house, she ran all over the new real estate in Guangzhou and broke 3 pairs of shoes. I was deeply impressed by her amazing perseverance. But she never did research on trading, she just bought crude oil after hearing someone recommend it to her from various miscellaneous channels. As for why you should buy it, I don't know. What crude oil does, I don't know. The difference between gasoline and crude oil, US oil or cloth oil, I don't know.
I believe that 70% of market investors are like this aunt. They usually have to shop around to buy a roll of toilet paper. They can wait in line for 2 hours for a coupon worth 30 yuan. But when making a transaction decision, he didn't want to delay even a minute, and resolutely threw in tens of thousands of yuan in less than three minutes after seeing a transaction. I call this behavior mystified schizophrenia.
This kind of behavior is committed not only by amateur investors, but also by professional investors. Many people will make excuses, for example, I don't have so much data analysis. I don't know how to analyze. But what I want to say is: when you lose money, and you say "I didn't research it thoroughly, can I do it all over again", you can see if the exchange will refund you.
3) Most people just pretend to be hardworking and thinking
About 50% of the investors usually read "market secrets" online, and go to various forums and WeChat public accounts to collect investment knowledge. They seem to be very diligent and easy to learn, but in fact, they just collect dry goods with one click, and never really absorb and digest the content inside. The things in the collection are often only read once, and then put on the shelf. They are just looking for psychological comfort, so that their hearts do not condemn their laziness.
I can guarantee that after reading this article, most people will click to bookmark it, and they all agree with what is said in the article. But then what? Then there is no more. 90% of people will not take another look at this article. 99% of people will fully agree with the point of view of this article, but for those who really take action to change themselves, 50% of them will be left the next day, only 10% will remain after a week, and 99% of people will forget the content of the article after a month , let alone change anything.
Because of the inferiority of the people, Lu Xun abandoned medicine and followed literature, intending to use writing to awaken people's conscience. But did he do it? What has he changed? Nothing has changed. After reading this article of mine, will you be completely reborn, from a loss to a profit? 99% of people will still stay the same. Slapped myself three times, admitted that I had failed in the past, learned from the pain, determined to change myself from this moment, then lay down on the bed and fell asleep, and felt much better the next day, no longer blamed myself, and went to work happily went. This is what ordinary people try to do with what they call an "alter ego."
4) Fragmentation of knowledge
30% of the investors in the market are actually more diligent and studious, and they are indeed constantly striving for improvement, reading the review diaries written by various Internet masters. But in the end, all of these people will fail. The more you read, the higher the probability of failure. Is this a bit ironic? The harder you study, the easier it is to fail?
Why does this phenomenon occur. Because everything on the network is fragmented, there is no complete system framework. It's like you learn a little Shaolin boxing, practice a little Wudang Qigong, and secretly learn a little Emei swordsmanship, and finally make yourself nondescript and crazy.
Moreover, many so-called big Vs on the Internet are actually half-baked. The trading time has not exceeded 5 years. After reading a few technical analysis books, they come out to play tricks. What they write is like street performers with their fists and legs embroidered. It is very ornamental, but has zero practicality. If you read this kind of article all day long, you can only put on airs, and the key is to feel good about yourself, thinking that once you exert your skills, the other party will be shocked by you so that their meridians will be cut off, and their seven orifices will bleed to death. As a result, he was punched and KO'd as soon as he came on stage, and he made excuses when he lost: I didn't have enough breakfast today.
My suggestion is that if you want to learn, you should find a reliable person, learn a whole set of things from him, and absorb and digest all his things. This is much better than wandering around all day. If you really can't find it, you can learn a lot even if you read the book list recommended in my column several times carefully.
5) Investing with ideas
Many friend trading transactions are not based on facts, but on assumptions. That is, it is difficult to distinguish what is fact, what is reasoning, and what is obscenity. Always regard adultery as the basis for buying and selling. For example, "I think it's time to pull back", "I think it's already fallen, and this is the bottom." But if you ask him to tell the basis, he can't say it, it's just an intuition.
Or it may be far-fetched, for example, if the United States fights Syria, the big A will rise. I don't see why the big A has to go up, and it's not to fight China.
In many cases, you will find that most of the friends are very similar to the three aunts and six women in the countryside. In the countryside, there are various local methods to treat cancer that lack factual basis, such as eating Guanyin soil and worshiping little ghosts. Investors have also invented all kinds of weird ways of predicting trends based on assumptions.
There has always been an old saying in Guangdong: first fate, second luck and third Feng Shui. It roughly means that the key to success in life depends on nature, luck, and Feng Shui layout. Let me modify this sentence, the ranking of success factors: 1 fate, 2 luck, 3 focus, 4 hard work, 5 giving up. I feel that I should have enough qualifications to write this part. I have worked with 4 private masters who started from tens of thousands of yuan to tens of millions of yuan. I am very familiar with their operating methods, analytical ideas, and past fortunes. You can also understand that I have been observing them all the time. These four people have different styles. Through them, I have also summarized their commonalities over the years, so there is the content of the third part. In the next article, I will talk about what factors are needed for success.
Author: Kim Seung-ho
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