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Which is more important, stock selection and valuation?

Time: January 9, 2020 14:27:54 China Finance
In the investment process, two problems are actually solved. One is stock selection, which is to choose which company to invest in. Another question is what price to buy and what price to sell, which is the issue of valuation. This valuation problem determines the direction of operation. Which of these two aspects is the core of investment? Who is the solution? The key is stock selection or valuation?
From my personal understanding, stock selection is as important as valuation, or a good company must have a good price to be a good stock. Stock selection solves the problem of good companies, valuation solves the problem of good prices, and only the two aspects are solved, then the problem of investment is also solved, so I think it is equally important, and there are no trivial issues It is two aspects of a coin. It cannot be separated which aspect is more important. This is a whole and must be solved.

From another perspective, if I choose a good company, even if the purchase price is slightly higher, of course, it cannot be too high, and it cannot be bought several times higher, such as 30% higher to buy, then there is actually no Whatever the problem, we just need to be more patient to solve the problem. Just give it time and wait for the company to grow up slowly. Natural value will be reflected in the price. Then we will make money.

On the other hand, even if the company's texture is not so excellent, if it can be bought at a very low price, it will certainly make money. This is the issue of cost performance. If the stock is worth 5 yuan, it has already been I have sold 3 yuan, so if you buy it now, you will also earn this part of the undervalued money without any problems. This is also a profit method. The problem is that everyone ’s starting point is different. Slightly higher prices bought high-quality companies, followed by very low-quality companies with low-quality companies. These are two different ideas, but both can make money.

Selecting a company is still based on valuation, or whether the texture or price is the priority. In fact, it does not seem to be a problem. You can do it whenever you have the opportunity. You have the opportunity to make money, but the methods are slightly different. When do you enter and exit, this solves the problem. (. Shares.)
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