How to capture long bull stocks?

If a company wants to become increasingly valuable, it must have higher growth potential and stronger profitability in the future.

The profitability of the enterprise is calculated as follows:

1. The overall profit of an industry: the total demand of the industry multiplied by the profit of individual products

2. The profit of a company: market share * overall profit of the industry.

Therefore, if a company wants to have good profitability, it requires three conditions:

1Being in a promising industryThe larger the total demand of the industry, the better, and it is best for the demand to continue to rise;

2In the high profit stageThe enterprise is located in a link with high selling prices and profits;

3Belonging to a leading enterprise in the industryHigh market share and discourse power.

In addition, the better the prospects of the industry, the greater the market demand, and correspondingly, the better the market's risk appetite for the industry, resulting in a higher valuation level for the industry.

Therefore, the value of a company is determined by its profitability, and the stronger its future profitability, the greater its value; And valuation is determined by both its profit expectations and external market environmental factors.

So, in order for a stock to become a "bull", it must meet the following conditions:

　　1. The prospects of the company's major industry are very promisingThis will affect the market's judgment of the future profitability of companies in the industry, and thus give these companies high valuations. Meanwhile, this is also a prerequisite for the company's increasing profitability in the future.

　　2. The company is located in the high profit sector of this industryThis can ensure that the company's products have relatively high selling prices and profits.

　　3. The company is a leading company in the segmented marketIf the company is the leader in the market, it means it can have a higher market share and achieve higher profits. In addition, if the company is a leader, it can ensure higher profitability in the future.

A long bull stock must meet at least the above conditions. In today's market, brand and quality determine a company's market position. With the improvement of the brand, the industry concentration will become higher and the market share of the enterprise will become higher and higher. This is an era where the desire grows stronger and stronger. The probability of choosing such a long bull stock to overturn will be much lower.