For investors, the most important thing is not profitability, but safety. The first focus of an investment is not on how much money can be earned at most, but on the probability of loss. The hero in the investment market should be the one who survives the longest, rather than measuring who is the most brilliant at a certain point in time. Of course, investors are naturally willing to choose stocks with good safety, profitability, and liquidity for investment. However, in the stock market, such stocks are desirable but not available. Investors must flexibly grasp and master investment skills and discretion based on the actual situation.

In a bull market, any stock you choose is the right one. But bull markets are not common, and in the more than ten years of history of the Chinese stock market, there have only been a few real bull markets. But it's different in a bear market, we must adhere to principles, otherwise we may suffer serious losses. When you choose a stock, at what level, when you can operate, and when you cannot operate, you need to have a plan, reasons, and strictly follow them.

How to choose stocks in a bear market? Simply put, the best thing to do in a bear market is not to act. But some people feel bored when they don't have any stocks in their hands all day, always wanting to keep buying and selling, constantly entering and exiting to earn the price difference. As a result, I couldn't play against the banker. Of course, there are stocks available in a bear market, and some stocks have also risen well. So, if you insist on operating in a bear market, there are still stocks to choose from.

So when will we have the opportunity to find cheap stocks that have been severely suppressed in terms of value but have sufficient safety margins? Be greedy when others are afraid, and be afraid when others are greedy.

When others are too greedy, the market will be clearly overvalued. At this time, you should have a fearful heart and not buy easily; When the market is too fearful and excessively suppresses stock prices, it can lead to many stocks being severely undervalued, causing others to be too afraid to buy. At this point, you should be bold and greedy, buying at low prices. Many of us enjoy a sharp rise in the stock market, but Buffett likes a sharp drop in the stock market. "A sharp drop in the stock market is actually a major positive news.

When the stock market falls sharply, investors sell at low prices due to fear, which creates a greater margin of safety. Buffett can take advantage of this opportunity to greedily buy a large amount of high-quality and low-priced cheap goods, and of course, he is very happy. Buffett likes big drops because they give him the opportunity to buy a large number of good stocks at low prices and make big money in the future. Only when the capital market is extremely sluggish and the entire business community generally feels pessimistic, will investment opportunities for obtaining very lucrative returns emerge

On the contrary, when the stock market surges, investors chase after the high price due to greed, and the sharp rise in stock prices reduces or even disappears the safety margin. Buffett, who wants to buy stocks but cannot find good and affordable ones, is naturally unhappy. Contrary to most people, the more popular a stock is, the less interested Buffett is. Most people are interested in stocks that everyone is interested in. In fact, the day when no one is interested in stocks is when you become interested in stocks. Popular stocks are actually difficult to make money from

So how to choose good stocks? Regarding the evaluation of listed companies, there are mainly the following 10 indicators:

1. It is best to have a continuous operating record of 5-10 years or more for examination: that is, having experienced at least one complete economic cycle fluctuation, only by comprehensively understanding its business performance during peaks and valleys can one truly understand the business philosophy of this enterprise, such as whether the business results faced after actively expanding during peaks or valleys have significant differences.

2. The intrinsic value growth rate over 10 years: This is the most important business indicator, although simple, it is often overlooked. Different enterprises have different internal value evaluation criteria, for example, bank stocks value the growth of net assets the most; Gree Electric Appliances, represented by light assets, should value the growth of net profit; For e-commerce that has not yet made a profit, the growth of operating revenue is used as a reference indicator.

3. Long term ROE level: This also involves specific situation analysis, and each industry and even each enterprise has different evaluation systems. A general return rate of 15% is considered excellent in heavy asset industries, while a net asset return rate of over 30% is considered excellent in light asset industries.

4. Industry attribute: Does it require continuous huge capital expenditures? Or is it the excellent model of 'one capital, ten thousand profits'? Are technological updates and business model changes slow? Is there any competitive force outside the business ecosystem intervening?

5. Market capacity: Does there exist a sustainable demand? Where are the approximate locations of bottlenecks and ceilings?

6. Behind financial statements: not only listen to their words, but also observe their actions. Essentially, financial statements are a true description of a company's operating behavior. The interpretation of the three tables can reveal whether the management is honest, whether the business philosophy is conservative or radical.

7. Business model: In the long run, whether it has the characteristics of a "moat model".

8. Equity structure: whether the management holds shares, shareholder structure.

9. Corporate governance structure: Well structured, systematic, and smoothly operating.

10. Management level: The most important reference indicators are the business philosophy revealed behind public statements and long-term financial data, whether words and actions are consistent in the long run, whether they comply with business common sense, such as whether research and development expenses are capitalized or expensed, which shows whether a company's accounting treatment is conservative or aggressive, and so on.

To make money in the stock market, the first step is to do a good job in stock selection. But how can we choose such bear market bull stocks?

1. Bull markets chase hot topics, while bear markets talk about value. Persist in value investing in bear markets and invest in stocks with sustained performance growth. There are also individual stocks with policy guidance.

2. The trend is upward and is accompanied by trading volume. Without trading volume, it is difficult for any stock to rise. Simply put, it is a stock where the K-line rises from one bottom to another, buying at low prices and selling at high prices.

3. There should be technical indicators. It's difficult to choose stocks in a bear market, and technical indicators are not the only ones. However, you should still look at them. At least the MACD trend is upward, and it's safer to see a red bar just appearing on the 0-axis.

4. Control the position. The best way in a bear market is to take a short break. You may get it right 9 times in the short term. As a result, once the heavy warehouse made a mistake, it was a waste of effort. So it is necessary to strictly control the position. It depends on the level. 20-30% of the position. This way, you can advance, retreat, and defend. Don't worry about not making money. Financial security is the top priority.

Finally, I would like to quote a famous quote from Mr. Dan Bin, a master of value investing in China: When it comes to investing, it's about who can see far, see accurately, dare to invest heavily, and persist. It's really explained too thoroughly.