Decades of reform and opening up, China has always been accelerating on the runway, China took off, lifted off, through the clouds, and appeared some great enterprises. In the stock market, these great companies will bring investors rich returns.
Warren Buffett's great success is because he caught up with the era of rapid development in the United States, and it was in the United States that he learned what a great business is.
Coca-Cola in the beverage industry, Microsoft in the computer industry, Marlboro in the tobacco industry, DuPont in the chemical industry, Ford and Chrysler in the automobile industry, Wal-Mart in the retail industry, Lockheed Martin in the arms business, Boeing and McDonnell Douglas in the airplane manufacturing industry, Pfizer (the company that produces Viagra) in the pharmaceutical industry, GE in the electrical industry, McDonald's and KFC in the catering industry, and Dahlmoor in the banking and securities industry, Citi, Merrill Lynch, etc. The great enterprises are all over the world, and most of them are from the United States. These great enterprises basically came to glory gradually after World War II; before that, they were just excellent enterprises or outstanding enterprises. Along with the process of the United States becoming the world's first power after World War II, these enterprises became great enterprises.
The core of value investing is to choose stocks that will become great companies in the future.
Good companies can be divided into three categories: good companies, excellent companies, and great companies. Excellent companies are those that are doing well in the industry, outstanding companies are the leaders in the industry; and great companies are those that are influential in the world.
If one buys into an excellent company, which tomorrow becomes an excellent company, and the day after that a great company, one gets a handsome return, so handsome that we may surprise ourselves.
Choose a company that may become a great enterprise according to the following method:
Choose from the company level
First, it must be the enterprise of its own nation
This is because only the enterprise of its own nation has intellectual property rights belonging to itself, and the technology, products, and orders of a joint venture are all second-hand, and it is impossible for foreign shareholders to leave their own intellectual property rights to the joint venture, so the joint venture will not be able to get the money. The foreign shareholders cannot leave their own intellectual property rights to the joint venture, so the joint venture can never be a great enterprise.
Second, must be the industry leader, unique best
This is because the industry leader, or unique enterprises, they have the brand and core competitiveness, so they will get excess profits, the stock will also get much higher than the market average high valuation. In addition, and more importantly, they are extremely risk averse, not freezing to death in the industry's winter, but instead being able to acquire rivals and expand their market share.
Coca-Cola is the first, but there is Pepsi to compete with it; Maotai is the first, but there are Wuliangye, Guojiao, Shuijingfang, Guofen to compete with it; China Merchants Bank is the first, but there are Pudong Development, Shenzhen Development, Huaxia, Minsheng to compete with it; Yunnan Baiyao, Dong'a Ajiao, Pientzehuang is unique.
Third, must have a complete industrial chain, upstream and downstream second, midstream avoidance
With a complete industrial chain of enterprises, the ability to withstand risk, the ability to obtain profits, so, with a complete industrial chain of enterprises is most likely to become a great enterprise. Such as Baoti shares, Xiamen Tungsten, Nanshan Aluminum, Salt Lake Potash is a complete industrial chain of enterprises. Baoti is China's titanium industry leader, the products of the domestic market share of more than 40%, of which high-grade titanium and military titanium share of up to 80%, is the third strongest in the global industry, the scale of production is second only to the United States of America's timet and Russia's vsmpo, and Boeing, the United States, signed a long-term supply agreement with the Goodrich Corporation, is a truly great enterprise. Xiamen tungsten industry is China's leading tungsten industry, mastering the world's most advanced tungsten and tungsten carbide powder technology, is one of the world's best tungsten carbide billet and tungsten material manufacturers, the world's original tungsten consumption of 25% from Xiamen tungsten industry, the world's energy-saving lamps more than 70% are loaded with Xiamen tungsten industry's "China core" (tungsten wire), Xiamen tungsten industry and treasure Xiamen Tungsten, like BaoTi, is a truly great enterprise. Nanshan Aluminum is the only enterprise in the global aluminum industry that has completed the industrial chain from smelting to aluminum foil within 50 square kilometers, with the world's first cost advantage and the world's first advanced equipment, and it is a deserved leader in the aluminum industry, and it is likely to grow into a great enterprise. Salt Lake Potash is China's leading potash fertilizer, is Asia's largest potash producer, potash market share of about 25%. Has potassium chloride reserves accounted for 97% of the country's proven reserves, monopolizing China's potash resources, 07 years the company's potassium chloride gross margin of 70%, as long as the policy allows (exports), become a great enterprise is not impossible.
If you can't find out the enterprise with complete industrial chain, at least choose the upstream and downstream enterprises.
Upstream enterprises control resources, with the scarcity of resources to take the initiative, or even monopoly. Such as Baosteel rare earth control 62% of the world's rare earth resources, 87% of China's monopoly on the vast majority of the world's rare earth resources, is the king of China's rare earths, but also the world's king of rare earths, is equal to the world's future grasp of highly sophisticated alloy materials "vitamins", as long as the management of the outstanding, no doubt will become the world's influence on the great The company is also the king of rare earths in the world.
Downstream companies contact the end user, it is easy to establish a brand, you can rely on the brand to sell high prices.
Midstream companies, i.e., manufacturing companies, are subject to upstream and downstream constraints, and will never become great companies. In the manufacturing enterprises, the production of end-products of the enterprise is slightly better, the production of parts of the enterprise is the worst, they can only cooperate with other enterprises, they have no bargaining power. Downstream end product price increases, parts may not be able to get a piece of the pie; downstream end product setback, parts production is likely to be finished. For example, the automobile industry is better than the production of parts and components of the enterprise. Another example, although the three ring is China's first, the world's second neodymium-iron-boron magnetic materials suppliers, is a fast-growing energy-saving and environmental protection sunrise industry in the leading companies, products used in wind power, hybrid vehicles, nuclear magnetic *** vibration and other high-end equipment, but it is only a parts manufacturer, both subject to upstream raw materials, Baosteel Rare Earth rare earths continue to raise the price of rare earth materials eat up the profits of the three ring of China's science and technology, but also subject to the Downstream machine manufacturers. Therefore, if Zhongke Sanyuan can not be the world's first, monopolizing most of the world's market share, it is difficult to become a great enterprise.
Four, there must be pricing power
Pricing power has two meanings:
One is that consumers still want to consume in the case of price increase, and there are fewer or no substitutes at all. For example, if the price of Erguotou doubles, consumers may choose other varieties, but if the price of Maotai doubles, there may be no significant reduction in consumption; if the price of Yunnan Baiyao or Dong'ajiao doubles, consumers can only be passive acceptance because they have no substitute products. Consumption of brand-name products is not sensitive to price changes, that is, with price rigidity, so that you can constantly raise prices, raised the price of what? All are profits, all the silver for nothing.
Second, the price can not be regulated. Involving the livelihood of the country's industry is unlikely to come out of the great enterprises, because the government - the government will not allow these enterprises to get high profits, for example, electricity, water, highway and other public utilities.
Fifth, it must be sustained, stable, growth
refers to the earnings per share, gross margin, net interest margin, return on total assets, return on net assets, and other financial data should be sustained first, followed by stability, and finally growth.
Six, the management must be very good
Only with monopoly resources of the enterprise, if there is no excellent management to operate, it is difficult to become a great enterprise. The core competitiveness of the enterprise includes brand, patent, technology, capital scale,, monopoly resources, policy barriers, etc., but the most dynamic core competitiveness is the outstanding managers, excellent corporate culture, efficient management model, excellent and stable workforce. The process of enterprise from good to excellent and from excellent to great is mainly driven by entrepreneurs. Great companies have an excellent business leader, such as Jack Welch of General Electric, Iacocca of Chrysler, Bill Gates of Microsoft, Wang Shi of Vanke, Zhang Ruimin of Haier, etc.
From this point of view, the biggest benefit of buying stocks is not only buying land, capital and labor, but also buying entrepreneurial talent, which contains the most active, positive, and creative elements of this investment, which can not be done with gold and real estate investment.
To put it plainly, to buy stocks is to be a shareholder, is to hire people to work, we are to hire capable people or hire fools? So, choosing stocks is choosing entrepreneurs.
Choose from the product level
Seven, it must be the market capacity is large enough, the market share is high enough
The market capacity must be large enough to feed the big fish; the market share is high enough to show that the company is the big fish in this pool. Market capacity is like a pool, the pool is small, it is difficult to raise big fish, not to mention breeding dragon.
We can think of it this way: how many people drink Maotai wine? How many people use Gillette blades? How many people smoke Marlboro cigarettes? How many people drink Coca-Cola? How many people use Microsoft's system? This is the market capacity.
Eight, it must be stable consumer preferences, at least not shrinking, can expand the best
Maotai wine, Coca-Cola consumer preferences are difficult to change, not easy to be replaced by other products, which guarantees that the market is stable, at least not shrinking.
Selection from the level of the industry
Nine, there must be high barriers to entry, monopolistic barriers are the best
No barriers to entry in the industry can not create great companies, because everyone can do the product can not be sold at a high price, since it can not be sold at a high price, who is willing to make the product perfect? Just like lighters and leather shoes.
Although there are barriers, but the barriers are not high, and can not create a great business, because the barriers are not high, competitors come in easy, a come in industry profits will be averaged.
Barriers include brands, administrative licenses, resources, patents, and capital size. Extremely high barriers discourage competitors, and monopolistic barriers allow competitors to simply not come in. For example, Moutai is protected by the state, gum monopoly of 90% of the country's donkey resources, Yunnan Baiyao has a state-protected formula is also a monopoly, Coca-Cola have patented technology is difficult for others to imitate, the China Merchants Bank has the first priority, and enjoy the monopoly of the national financial barriers. Zhenhua Port Machinery has a coastline of up to 2 kilometers, as a production base, no one in the world and money can not enter, which is a very high barrier. Baosteel rare earth owned rare earth resources, belonging to the state licensed, no one can develop rare earth resources in the area under its control, therefore, belonging to the monopoly barriers.
Tenth, the industry must be a real money-making industry, that is, the good and the industry
Some industries are related to the people's livelihood, although very important, but the good is not necessarily called. For example, although the electric power industry is very important, but the price of electricity by the government - government control, so it is good but not good industry. Another example is that thermal power generation enterprises are burning coal to generate electricity, coal prices are not controlled by the government, the more electricity is generated, the more coal is used, the more coal companies earn, so the coal industry is a good and popular industry.
Then again, wind power generation is not necessarily profitable, but do wind power generation equipment companies will certainly make money. Just like the gold panning may not necessarily make money, but selling shovels must make money.
Eleven, the new national policy to support the industry breeding major opportunities
The country in order to strengthen the national power and the new support policy to encourage the development of the industry, you can get tax, policy support, you can realize the rapid development of the enterprise to help the rapid growth of the enterprise to help the development of a great enterprise. For example, the national revitalization of the equipment manufacturing industry this major strategy involves 16 major equipment special industries, it is likely to produce great enterprises. One of the CNC machine tool industry is the top priority, Shenyang Machine Tool with its leading position in the industry is bound to get more development, with the potential to become a great enterprise. Another example is the railroad rolling stock manufacturing industry in the Jinxi axle is also likely to obtain rapid development, thus becoming the world leader in axles.
Twelve, the state investment in key construction of the industry breeding major opportunities
The state in order to improve infrastructure and a large number of sustained investment in capital focused on the construction of the industry, the market size continues to expand steadily, in which the enterprise can achieve rapid development, contributing to the rapid growth of the enterprise, help the development of a great enterprise. For example, the country's railroad construction, the construction of power grid equipment a few years ago, the next few years of power grid construction (ultra-high-voltage power grids) are the country invested trillions of dollars in the industry, in which the enterprise will be able to obtain huge business opportunities, Dongfang Electric has become an outstanding enterprise and is moving towards great enterprises, and TBEA has already become a great enterprise with a huge impact on the world.
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Summarize the three major characteristics of the big bull stock varieties:
1, or good products, market space, or market space yet to be developed;
2, or because of cultural and unique Advantageous factors, the product is difficult to replace;
3, the policy tendency is a problem that must be considered in China, because China is not a free-competition market economy, but an administrative monopoly-type market economy;
4, excellent corporate management, cost control ability, capital operation ability.
5, why value investing in China, not very popular, because the listed companies in the market, are not for shareholders to make money, but the circle of money, the circle of money is not responsible for making money, making money, he is according to the agency's speculation needs and out of the performance, do not need to be a high performance, he made money also embezzled, squandered; need to be a high performance, he did not have the performance can be created to performance. Many good companies, good products, is always out of performance. This is a defect of Chinese characteristics.
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