Shenyang Linlong Company: Investing in the Reverse and Not blindly Following

Many investors always like to "follow the trend" and "follow the trend". I buy whatever others buy, always thinking that "since so many people buy, it must be reliable.". Of course, in a sense, it may not be a problem. A stock that is highly favored indicates that people believe in its future development potential. After all, the eyes of the masses are bright. However, today, what Linlong wants to talk to you about is the investment method of reverse investment, which goes against the trend.

The more people invest in a certain stock, the more likely it is to attract more people to buy, causing the stock price to rise and attract more people. This is probably a cycle. Investors saw this "prosperous" scene and felt that they could definitely make a lot of money, so they all invested in it. However, this mentality can lead to a trend of inflated stock prices, which is an excessive deviation from the value that stocks should have.


Reverse investment, choosing stocks with lower P/E ratios and P/B ratios but higher than average dividends, and not following the trend to buy so-called high-quality stocks may ultimately yield unexpected returns. After all, stocks that have been driven up will inevitably collapse, while stocks that appear low in price but have real intrinsic value will have more room for appreciation, real appreciation space. However, do not expect any obvious returns in the short term. This reverse investment approach pursues a long-term peace and stability.


For some cyclical industries, buying when their P/E ratio drops to the bottom is a good strategy. The operation of this type of industry exhibits cyclical changes, so it is easy to understand that there will be good returns when the industry rises in the future. If you have sufficient understanding of a company or industry, understand certain patterns, and still be able to buy calmly in times of decline, they will reward you in the future. Compared to short-term gains and losses, long-term investment tests mentality more.


Of course, reverse investment is not simply a behavior that differs from others and is done in order to be unique. It needs to have sufficient understanding of relevant industries when investing, and sometimes can step out of mainstream voices, make its own judgments based on its own understanding, and have enough patience to wait for returns to be realized. After understanding these, I believe that everyone's investment can gradually enter a better stage.


Linlong Company wishes everyone a pleasant investment.