A fall in high-value stocks does not mean a failure in value investing

2022-07-01 0 By

Since the second half of 2021, there have been signs of a decline in high-value stocks.Reaction on the disk, often every day there is a white horse stock collapse.In January 2022, the decline of high stocks accelerated, especially the collapse of group stocks, and the collapse of the market index.As A result, the a-share market has questioned the voice of value investment.Because collapse of the high stock, mostly before shareholders recognized value investment targets.Such as Changchun Gaoxin, Wuliangye, gold arowana and so on.There is a cognitive issue here, what is value investing?The so-called value investment is to select stocks with good performance, good potential and low price-earnings ratio from numerous listed companies, buy and hold them for a long time, and then grow together with the enterprise to enjoy the dividends of enterprise development.Value does not apply to stocks whose prices have been inflated to the sky and price-earnings ratios have gone through the ceiling.For example, jinarowana, a company selling edible oil, was listed on the GEM in October 2020. It only took more than three months to raise its stock price to 145 yuan, with a price-earnings ratio of more than 100 times.Golden arowana’s share price has fallen 60% from its peak to 57 yuan now.Even so, it still stands at 63 times.Is this value investing?Apparently not.The essence of value investing lies in the excavation of potential stocks, low into, long-term take, high out.Instead of going up and crashing and complaining that value investing is fake.Value investments may be held for a long time, three years, five years.But value investing requires the ability to tolerate loneliness and suffering.