People yearn for tenfold shares and always feel that they have nowhere to look for their iron shoes, but they ignore the big cattle stocks from around them, such as Angel yeast in the kitchen, Haitian flavor industry, Yili shares, Gree Electric Appliances, Midea, Stone Technology and Kovos in the living room, Chengguang stationery and Li Ning Co. Ltd. in the classroom, Huaxi creature and Peraiya on the dresser.

In investment, the password of Daniel stock is often hidden in daily life. In September 2016, a friend's child was promoted to the first grade of primary school. the head teacher of this classmate is a special teacher who has been teaching for more than 20 years. Paying great attention to the beauty of students' writing and neatness of the paper, the teacher recommended an eraser printed with miffy bunny on the grounds that it was cleaner than other brands of erasers. The maker of this eraser is Chenguang Stationery, which is now in the fifth grade and has increased nearly fourfold in the past five years.

There is no secret book for stock selection. In fact, Warren Buffett and Peter Lynch, the "most legendary fund manager in history," all call themselves "techno-phobias." most of their super stocks also come from consumer stocks that are easy to understand. Such as Buffett's Coca-Cola Company, Candy Candy and Apple Inc, Peter Lynch's The Home Depot Inc, Dawn doughnut and McDonald's Corp and other companies.

Ordinary investors may not be able to understand which companies in the high-tech industry are competitive, the location of macroeconomic cycles, or the leverage of financial companies. however, they have basic judgment on the quality of soy sauce, the popularity of stationery, the popularity of cosmetics brands and the workability of household appliances.

The stock is not a code, but a living company behind it. The first principle of investment is to know what you are buying, and the main reason for investors' heavy losses is to follow suit and buy companies they do not understand.

The consumer stocks around us, such as "clothing, food, housing and transportation", are easy to track and the business logic is clear and easy to understand. As Mingda Investment Chairman Liu Mingda said, "We prefer consumer stocks because consumer stocks are easier to predict and it is difficult to make long-term money without long-term faith in the future." "

As Zhong Zhaomin, chairman of the Oriental Marathon, said, "not knowing business logic is a terminal disease of investment, and researchers who can't smell money are unqualified." "

You invest in a company, not a big market.

After listing on August 18, 2000, one stock unfortunately caught up with the A-share big bear market for four consecutive years, with the Shanghai Composite Index falling from 2100 points to 998 points on June 6, 2005. Since then, it has followed the ups and downs of the stock market, including the big bear market in 2008 and the huge shocks in 2015. So far, the shanghai index has risen only 67% since the stock went public, but the stock has risen nearly tenfold since its first day of trading.

This stock comes from Angel yeast in the kitchen. On August 8, 2000, Angel yeast closed at 30.88 yuan on the first day of listing, corresponding to a price-to-earnings ratio of 70 times. After nearly 22 years, the share price of Angel yeast has risen tenfold, with a recovery price of 330 yuan. Over the past 21 years, although Angel yeast's price-to-earnings ratio has halved, profits have increased 32-fold, and earnings growth is the key to ensuring that the stock travels through bulls and bears. In terms of investment, the excess return of Angel yeast is not obvious, because the price-to-earnings ratio of the company is relatively high at the beginning of its listing.

The tenfold strands that come out of the kitchen are not just Angel yeast. Since listing, Yili shares have risen more than 300 times, Shuanghui Development has increased 45 times, Anjing Food has increased 14 times, Haitian flavor industry has increased 11 times, Hengshun vinegar industry has increased 8 times.

In the big consumption track, light medical beauty stocks have been unstoppable in the past two years. It is easy for more than 40 + female consumers to find that micro-adjustment and light medical beauty have increasingly become a topic of interest in both the "dormitory group" of former universities and the "mother group" where children often gather.

In the view of many more than 40 + female consumers, traditional daily care has been unable to solve the problems caused by skin spots and wrinkles, while "young girl needles", "hydrating needles" and "high body" are subversive solutions. The consumer price of light medical beauty is not much different from that of traditional daily care high-end products, but the effect of the former can be seen almost immediately. Once consumers are exposed to "light medical beauty", the nature of loving beauty will prompt her to buy again in the following years. High gross margin, repeated purchases and increased permeability are the three key factors to produce bull stocks.

Similarly, for teenagers, Li Ning Co. Ltd. 's clothes have become more and more popular in recent years. Even Li Ning's rope skipping has been popular all over the primary school campus. Li Ning Co. Ltd. has gained 10 times the share in the past three years; under the COVID-19 epidemic, because it is difficult to find an "aunt", more and more floor-sweeping robots from Kovos and Stone Technology have appeared in the living room, and Kovos has become a tenfold stock in the past two years.

For individual investors, you are investing in a company, not a big market, and choosing the right company is the key to a successful investment. For investment, even if you avoid all the slump, it is futile not to choose a good company. Only by choosing a good company and being a friend of time can you really benefit from the investment.

Why are the bulls around you more likely to make a lot of money?

For ordinary investors, most of the bulls around them are consumer stocks, and consumer stocks have two advantages: one is that the investment logic is simple, and the other is that it is easy to track.

From the perspective of business logic, consumer goods that occupy the minds of consumers have the ability to raise prices, which will be shown in a certain degree of price increase, and will not cause the loss of customers, while the ability to raise prices will be reflected in the growth of corporate profits, which will eventually push up the stock price.

If you are a housewife, you will naturally notice that the above rising prices of daily necessities in the kitchen: around 2010, 20 grams of Angel yeast is about 1.5 yuan per bag, but now 5 grams of Angel yeast is about 1 yuan per bag. The price of yeast has doubled in the past decade. In early 2000, the price of a barrel of 1.28L Haitian gold soy sauce was about 9 yuan, but now the price of this variety is between 21 and 23 yuan, and Haitian delicious soy sauce is more than 26 yuan, which means that in the past 10 years, the price of Haitian soy sauce has unwittingly more than doubled.

If you are a high-end business person, you will naturally pay attention to the custom of "no wine, no table", while Feitian Maotai represents the host's attitude of "entertaining guests with the best wine". In 1951, the price of Maotai liquor was 1.28 yuan per bottle, while now the ex-factory price of Pfeiffer is 969 yuan per bottle, with an annualized price increase of more than 11%.

The increase in the price of the product will eventually be reflected in the growth of the company's profits and ultimately push up the share price. Peter Lynch once cited Philip Morris International Inc, a big cow stock that makes cigarettes, as an example: if the price of the product increases by 6%, the cost increases by 4%, and the corporate profit margin increases by 2%, it may not seem eye-catching, but if the company's profit margin is 10%, the company's annual earnings will grow by 20% (2%, 10%, 20%).

Second, consumer goods manufacturers have plenty of free cash flow, and their expansion does not depend on capital expenditure. While heavy-asset companies need to constantly upgrade their equipment to ensure competitiveness, their cash inflows will flow out again at some point. If the essence of investment is "to buy stocks is to buy companies, and to buy companies is to buy future cash flow", consumer goods companies are more likely to get high valuations.

For ordinary investors, the characteristic of consumer stocks is that they are easy to track. Whether it is shopping in the supermarket, shopping in e-commerce, eating out or chatting with friends, you can find out the sales of the products you follow from different aspects. For investors, only continuous tracking can form long-term confidence and make long-term money.

Investment needs continuous evaluation

Just because a popular product only reminds investors to pay attention to the company does not mean that the listed company that produces the product is worth investing in. Although a great company needs to have great products, the popularity of products does not necessarily mean that the company has investment value. Good products are just important signals to willing investors.

The slogan "Weiwei soy milk, happy" makes Weiwei soy milk a household name, but Weiwei's share price is less than 20% higher than the first day's closing price on June 30, 2000. Black sesame was also the standard king of CCTV, and the slogan "a strong fragrance, a wisp of warmth" can evoke many consumers' childhood memories, but so far, the share price of black sesame is still lower than the closing price of its first day on April 18, 1997.

Despite the poor performance of Weiwei shares and black sesame shares, it is not difficult for investors to detect changes in consumer habits and avoid losses on their investments. In fact, with the improvement of living standards, milk has gradually replaced soy milk and sesame paste as the main drink for breakfast, and Yili shares have also become a big cow stock.

Overall, however, the chances of winning for consumer goods companies are relatively large. Statistics from brokerage Chinese journalists show that 85 of the 118 food and beverage stocks have more than doubled since 2000, of which 25 have risen more than 10 times, while only 7 have fallen.

In addition to perceiving the competitiveness of products, investors also need to continuously read the annual report and conduct comprehensive research and comprehensive evaluation of the enterprise. the more details they master, the stronger their ability to predict the future.

In the era of the ubiquity of the Internet, the words and deeds of entrepreneurs, the strength of enterprises to launch new products, the competitive pattern of the industry, the brand power of enterprises, the channel power of enterprises and other information can be searched piece by piece like a jigsaw puzzle. The richer and more detailed the information obtained, the stronger the investor's ability to predict the future of the enterprise. All this needs to be based on the understanding that buying stocks is buying companies.

In addition, investors should also have a basic judgment on valuation, but valuation does not mean that 50 times is overvalued, 20 times is undervalued, and the valuation of the company should match the texture of the company. Buffett invested in Xi Shi Candy in 1971, and the company has contributed more than a hundredfold to Buffett in 50 years, so how should companies that like poem Candy be valued? In any case, overvaluation means that it may take a lot of time to digest the valuation, and it will be costly if you read it wrong.