There are some penny stocks around 3 yuan in the A-share market. If one has a capital of 100,000 yuan, is it suitable to invest in these low-priced stocks?
I have found that some people believe the question posed is a typical "loser" mentality, and I think this direct definition is debatable.
1. Market preferences change every year, with high-priced and low-priced stocks taking turns to perform.
In 2017, there was a wave of rising quality stocks, and the popular voice in the market was that the era of value investment had arrived. As a result, the herd mentality led many people to buy those quality stocks that were at high positions after the surge and were in a state of high fluctuation. What happened next? In 2018, they also entered a continuous state of decline. Those who bought quality stocks thought they had boarded the wealth train, but in fact, they were just on a slippery slide.
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The high-priced stock, Moutai, is a hot topic for everyone, and those who hold Moutai are also complacent. I think those who have held Moutai for more than ten years have indeed made the average market returns, while those who bought Moutai halfway may not have made as much as buying a low-priced stock, which is more cost-effective. I can compare it with a stock of China Metallurgical Group Corporation.
China Metallurgical Group Corporation (601618) hit its lowest point of 1.23 yuan in June 2013, and two years later, in April 2015, the highest point was 11.35 yuan, an increase of about eight times. At the same time, the lowest point of Guizhou Moutai in June 2013 was 104 yuan, and in May 2015, it was about 240 yuan, just a onefold increase. That is to say, China Metallurgical Group Corporation far outperformed Moutai in the same period, while Moutai only rose continuously in the later market after the bear market, triggered by the concentration of funds and some institutions, and finally approached 800 yuan. Later, there was high-position fluctuation. Who says low-priced stocks don't have opportunities? Wild lilies also have spring. High-priced stocks are resistant to falls and will also be resistant to rises in the later period, which are things that have happened many times in the market. Those experts who have not experienced several bull and bear markets do not understand what investment is.
2. In the historical low area of the market, the performance of low-priced stocks is better than that of quality stocks.
From the end of 2013 to the first half of 2014, the market was full of two-yuan stocks, and in the end, some stocks soared, even creating a fivefold increase, which is the low-price surge market. This scene has happened at the two historical points of 998 and 1664. Low-priced stocks do not mean they are junk stocks, because the stock market has been falling for a long time, and funds are scarce, causing many stocks to fall continuously, but the fundamentals of the listed companies have not had too many problems. When the par value of these stocks has broken through the net assets, and the price-to-earnings ratio, price-to-book ratio, and dividend yield are low, they have already had investment value. This time point is the best time to buy.If there is capital, I believe that the period from 2019 to 2020 is a relatively good cycle for investment. It is advisable to start with industry research and analyze stocks seriously, but I do not recommend investing directly in a single stock. Instead, you can look for two or three suitable stocks to configure, which helps to guard against unpredictable risks.
Low-priced stocks in poor performance are not worth our investment.
Some low-priced stocks are low in price due to poor company performance. Such low-priced stocks are caused by the company's own reasons. If the company itself has problems, its value will be greatly reduced, and its investment value will be even smaller. For example, this year's penny stock, Zhonghong Shares, has a stock price lower than one yuan, but investors have little value in such low-priced stocks, and there is only risk; another example is Baoqianli, which has a stock price that has plummeted due to huge losses. The company cannot find the reason for the loss, and it does not know how much it has lost. Who would invest in such a company even if the stock price is low!
Low-priced stocks with stable performance have investment value.
The low-priced stocks worth our investment are those companies with stable performance. The decline in the stock price of these stocks is mostly due to market issues or the industry being temporarily not favored. For example, low-priced stocks in the securities and power industries, the reason for the low price of these stocks is the long-term decline of these two industries, but many companies have no problem with profitability. Another example is pharmaceutical stocks and large-cap stocks; although the stock prices of these types of stocks have fallen, the company's profitability has not declined. Some companies have even performed better than before. For such low-priced stocks, they are the focus of our investment.
There are more than 3,500 listed companies in the two boards and three boards, among which there are 176 companies with a stock price below 3 yuan, and the lowest price is 1.14 yuan per share. Speaking of investment, it cannot be said to be non-existent, nor can it be said to be present, it can only be "different strokes for different folks." Why do we say this? When the bull market comes, the vast majority of stocks will show an upward trend. What about the bear market or the volatile market? It is more about falling, with no market. Can you invest with a fund of 200,000?
The following are low-priced stocks with a dynamic price-to-earnings ratio of less than 20 times:
There are two points to note when investing in low-priced stocks:Do not invest in a single penny stock; instead, adopt a diversified investment approach.
A low-priced stock does not necessarily mean it carries a low risk. For example, if a listed company's stock price is 100 yuan and it falls to 50 yuan, the drop in terms of money is 50 yuan, but in terms of percentage, it is a 50% decrease. What about penny stocks? If the price is 3 yuan and it falls to 1.5 yuan, although the drop in terms of money is 1.5 yuan, the percentage decrease is also 50%.
Therefore, penny stocks also carry risks.
So, why do penny stocks have good investment potential? It is because when there is a market trend, many investors are willing to invest in penny stocks. Due to being "hotly pursued," there is a higher likelihood of a surge in demand. In such situations, the most likely event to occur is an increase in the stock price.
However, not all penny stocks can be "hotly pursued."
It can be said that no one knows which penny stock will be "hotly pursued." With the inherent risks of penny stocks, it is necessary to diversify the risks. So, how should one diversify?
The answer is, do not invest in a single penny stock, but invest in a range of them. This approach can both avoid the potential risks of a single stock and achieve a comprehensive return, spreading the risk.
Of course, if the stock market has a good trend, the overall average increase in the price of penny stocks is often quite significant.
2. Set a certain time frame for the investment.
Investing in penny stocks is not something that can be completed in a day or two, nor does it mean becoming a permanent shareholder. Therefore, it is necessary to set a time frame for investing in low-priced stocks.The renowned American investment master John Templeton's "claim to fame" was investing in low-priced stocks. His investment in low-priced stocks had two characteristics, the first of which we have discussed, namely the range-based approach. The other is the time frame.
There are three ways to judge the time frame:
1. Based on the rise and fall of the stock market, that is, to judge whether to sell according to the fluctuation of the stock market;
2. Based on the rise and fall of the stock holdings, that is, to judge by the rise in the stock holdings, such as John Templeton selling all the stocks when the profit reaches 300%;
3. Having a time limit, John Templeton will sell all the stocks in the fourth year of holding.
What stocks to buy in the current A-share phase
Below, I will share with you the general outline of the stock market, the basics of K-line, moving average, cutting line, index analysis, stock selection, sector rotation, and various scams in the stock market, hoping to provide you with a comprehensive review of stock knowledge.
(Note: If the following pictures are not clear, you can ask me for high-definition pictures, which will be compressed here)
1. General outline of the stock market map2. Basic K-Line Knowledge
3. Basic Moving Averages
4. Basic Trigonometric Lines
5. Indicator Analysis
6. Statistical Analysis7. Stock Selection Methods
8. Sector Rotation
9. Various Scams in the Stock Market
Top Ten Short-term Insider Mnemonics
Insider Mnemonic One: Do not sell without a surge, do not buy without a plunge, no trading during a sideways market.
This mnemonic reveals the secret of the stock market in one sentence. It is the simplest and most basic principle, which is actually the most fundamental and effective. Without understanding this mnemonic, even if you trade a thousand times, you will still be like a blind man riding a blind horse in the stock market, and you will inevitably meet a tragic end. Before you touch the market, you must recite this mnemonic silently and keep it in mind. Over time, develop a habit, and you will become as strong as steel. The first two sentences are easy to understand, and the last one, "no trading during a sideways market," is something that should be paid special attention to in warrant operations. When trading during a sideways market, if the market reverses, you will inevitably cut losses or chase the rise, both of which are undesirable. During a sideways market, the price difference is not significant, and if you lack patience and trade multiple times, you will inevitably incur losses in transaction fees.Inside Tip Mantra II: Buy the shadow, not the light; sell the light, not the shadow. Act against the market to be a hero.
This mantra is somewhat similar to the first one, which talks about the principle of acting against the market. The first one is about short-term, while the second one is about medium-term. That is, when buying, choose to buy when the K-line closes with a shadow; when selling, choose to sell when the K-line closes with light.
Inside Tip Mantra III: High and low consolidation, wait a bit more.
The content of this mantra includes the content of "no trading in the horizontal" in the first mantra, but the main meaning is that when a stock or warrant has continued to rise or fall for a period and then enters a state of consolidation, there is no need to sell all positions at a high position, nor is there a need to buy all positions at a low position, because after consolidation, there will be a change in the market, so the period of consolidation should not subjectively decide to build or clear positions. If it changes downward from a high position, clear the position in time, and there will be no loss; if it changes upward from a low position, chase in time, and you will not miss the opportunity.
Inside Tip Mantra IV: High position consolidation and then a new high, seize the opportunity to sell quickly; low position consolidation and a new low, a good time to buy all positions.
This mantra is a further specific explanation of the third mantra, describing the best opportunity in the third mantra. Stock prices and the market often have a new high after high consolidation, and a new low after low consolidation, so it is said that you should wait for the direction of the market change to become clear before starting. For example, if the market changes upward after high consolidation and reaches a new high, this is the best time to sell; and if the market changes downward after low consolidation and organizing, this will be the best time to buy all positions.Internal Reference Formula Five: Admit your mistake before you even start, better to buy less than to buy more.
The great way is simple, and this formula is another seemingly simple yet not easy to practice principle. It is about the allocation and use of capital. You cannot buy all your capital at once. The real master is the one who can buy at the low point, and selling is not so important, it's just a matter of how much you earn. Before you start buying stocks, you must admit that your purchase is wrong, and be prepared for how to add positions at a low level when the stock price falls and you are trapped, instead of the so-called technical stop loss, which is to cut your flesh and is all harmful nonsense. Since the stock market has been around, only the "pyramid buying method" is the only eternal truth in the operation technique. The pyramid investment method is a method of buying and selling stocks in batches. That is, when buying stocks, buy less and less; when selling stocks, sell more and more.
Internal Reference Formula Six: Being trapped and replenishing positions to save the principal, seeking profit is greed.
This formula talks about a common mistake people often make. When you are trapped, you have supplemented a position on the technical support, or added a volume to supplement a position, but you must clearly recognize that your goal for doing this is just to recover the principal. When the rebound is not a loss, you should sell in time, but many people see the stock price rising, and they think if it rises again, I will make a profit, how much I will earn, but the result is that it falls back again, and is trapped again, this time even the self-rescue funds are gone, only waiting to be helpless. Therefore, this is listed to show everyone.
Internal Reference Formula Seven: One push and two recommendations do not rise, and can only go down and shake the warehouse again.
This formula is very important and is an unwritten rule of the stock market. It is mainly aimed at stocks. This situation is generally: a stock has been adjusted for a long time, close to the end, mostly in a state of platform consolidation, and people start to recommend it one after another. You see that the fundamentals are indeed good, but when you buy it, it doesn't move much. One day, it suddenly breaks down, and you curse and sell it, but you will see that its K-line has been rising up after making a pit shape and easily broke through the original consolidation platform, leaving the dust behind. You are thrown away like this. Everyone is optimistic, but it just doesn't rise, and 20 days later, it suddenly breaks down, and the K-line easily breaks through the previous platform after making a standard pit, and has already set a new high.Internal Reference Mantra Eight: A streak of red amidst the greenery, seize the opportunity to buy without letting go.
This mantra suggests that when a stock or warrant has been continuously adjusted downward for several days, such as 3, 5, 7, 9... consecutive bearish candles, presenting a sea of green, and one day you notice that the K-line for the day may close as a positive star or a small bullish candle, there is no need to analyze the reasons, whether it is the main force shaking the warehouse, absorbing goods, or any volume delivery, just dive in, and the next day will generally see a long bullish candle rebound. This phenomenon in warrants is more likely to appear in the selling rights, and the response requires a more rapid reaction.
Internal Reference Mantra Nine: A slowing downtrend, a slow rebound; an accelerating downtrend, a quick rebound.
The downtrend pattern can generally be divided into two types, one is the slowing downtrend type, and the other is the accelerating downtrend type. The meaning of this mantra is that in a continuous downtrend process, from the daily K-line, the amplitude of the decline is becoming smaller and smaller, then its rebound generally starts slowly, and you have plenty of time to follow up. However, if you look at the daily K-line, the trend of the decline is getting bigger and bigger, its rebound is suddenly started, fast and large in amplitude, you must respond quickly to catch up, otherwise, when you find it, it is already a big bullish candle with a long lower shadow from the bottom, and the profit space is not large. Mantra eleven is mainly aimed at the slowing downtrend pattern, so for the accelerating downtrend pattern, if you wait until the K-line turns red to enter, it is a bit late, so you have to "act according to the time", that is, you have to grasp the best time by yourself. Generally, it is decisive to intervene at the "most dangerous moment".
Internal Reference Mantra Ten: A wave rises on a calm water surface, be careful of the big waves behind.
A small military exercise is followed by a big battle. These two sentences have the same meaning, which is to observe the technical characteristics at the initial stage of the bottom start from the continuous time-sharing line. That is, when a stock or warrant has been horizontal at the bottom for a long time, its continuous time-sharing line for several days will show a very gentle shape, such as a gentle slope or a calm water surface, and when one day the water surface suddenly rises a wave that is relatively high, and then can no longer return to the original water surface, then there will often be a more astonishing big wave behind. The small wave in front is also like a small military exercise, and the big wave behind is a real big battle. In the K-line pattern described in the mantra "A streak of red amidst the greenery, seize the opportunity to buy without letting go", this "streak of red" small bullish candle is the first "wave high" to rise, which is the "small exercise", and the "big wave" "big battle" is the long bullish candle that will appear the next day.
The method and principle are in the trend chart, once you understand it, the wealth will naturally come rolling in.Who is the true teacher? The trend chart is the true teacher. It is the only one that patiently teaches, supports, and helps you without being conservative or lying. The key to having this master as your teacher is a word "enlightenment". Speaking of this enlightenment, it is a very important word, and I hope friends can pay 100% attention to it. Nature determines life, called life; life determines fate, called destiny; fate determines spirit, called luck, the key is enlightenment. A genius is 99% sweat plus 1% inspiration, and this 1% inspiration is the most important, it is enlightenment. A very obvious phenomenon among traders is called the 20/80 phenomenon, that is, among a group of traders, 20% of people make a profit, and 80% of people suffer losses. Why does this phenomenon occur? People all have a herd mentality, feeling that being with everyone is safe and correct. However, this mentality sometimes leads to correct phenomena, and sometimes it is difficult to succeed.
A trader's 80% of time and effort before achieving a goal can only obtain 20% of the results, and 80% of the results are obtained in the last 20% of time and effort. This is a very important phenomenon. Many people lose confidence and give up when they have been pursuing a goal for a long time without seeing obvious results. It is necessary to know that fate is a long-term thing, and there must be enough patience. Do not expect to gain a lot from the first 80% of efforts. As long as you do not give up, the last 20% of efforts will make significant progress. In the learning process, there is a center that must be paid attention to: the book should be read thinner and thinner, and simplifying complexity is the center. Complicated market trends are just appearances, and simple and useful methods are the truth of trading. Understand and be firm in a truth, the world has no good or bad, right or wrong. The market has no more or less, rise or fall. Life has no gains or losses, successes or failures. Good or bad, right or wrong, more or less, rise or fall, gains or losses, successes or failures, these binary opposite words are all considered from a self-centered perspective, and may not be understood in this way from another perspective.
The foundation of successful trading is thought, method, capital, and mentality.
Do you have your own trading strategy now? If not, please study hard. The purpose of learning is to form your own trading strategy.
The ancients said, "There must be a teacher among three people." Speaking of persistence, everyone understands, but the key is whether everyone has done it? We should persist in learning like breathing, only by learning can we make progress; only by learning can we understand. There is another purpose for persisting in learning, which is to form your own trading strategy as soon as possible.
Those who can change can survive. The wisdom of ancient China has given full attention to this, so-called "adapt measures to local conditions", "adapt measures to the times", "adapt measures to people" and so on, is to say that only by changing to change, being flexible and mobile, can we stand in an invincible position. Because of change, there are reversals and turning points. There is no perfect trading strategy, so don't try to improve your own trading strategy. When you adjust the old problem, new problems will inevitably arise. Learning is followed by actual combat, and you have to survive in the actual combat. The knowledge from the book is always shallow, and practice is the standard to test the truth. Actual combat, understanding, actual combat, that is, action, knowledge, action. Only with the unforgettable experience in actual combat can your thoughts possibly change in quality and take a leap. The unity of knowledge and action is the way to profit.
In your spare time, communicate and learn with stock friends about "Shuanglong Short-term Battle Method", "Limit Up Copy to Capture the Bull Battle Method", "Medium-term Main Force High Control Battle Method", "Capital Compound Interest Unstuck Battle Method" and other practical operation skills. Stock friends who are interested and willing to learn are welcome to communicate and learn with me, and I will definitely help you to the best of my ability. A gentleman respects and is upright inside, and is righteous and square outside.
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