Recently, the market has exhibited a pattern of fluctuating and bottoming out, indicating that market confidence remains weak and requires more positive factors to drive the next wave of opportunities. On the policy front, policies supporting stable growth are expected to be further intensified, thereby boosting the speed of economic growth. The central meeting has made strategic deployments for economic development in the coming years, emphasizing the market as the decisive factor in resource allocation, adhering to the socialist market economic system, supporting the development of new quality productive forces, promoting economic transformation and industrial upgrading, and also pointing out the direction for future economic development. The current market is still below the 3000-point threshold, and from a value investment perspective, some high-quality stocks or funds that have been mistakenly killed have a good layout opportunity. For value investors, using the layout opportunities brought by market mistakes is an important aspect of obtaining excess returns. On the other hand, it is by growing together with great companies that one can obtain significant excess returns. In other words, the excess returns from value investment mainly come from these two points: one is buying good companies, and the other is entering the market when market confidence is extremely low. These investment masters have profound judgments on investment value, and I want to guide everyone to learn value investment and practice the value investment concept by sharing the views of these investment masters.

Duan Yongping's summary of value investment is that buying stocks is equivalent to buying a company, and buying a company is equivalent to buying the discounted cash flow of the company's future. Duan Yongping describes value investment from the perspective of cash flow, believing that buying a company is buying the cash flow that the company will generate in the future. He also emphasizes that the most important, perhaps the only point, to distinguish whether it is value investment is whether investors are buying future cash flows. In other words, enterprises that can continuously bring cash flow to investors in the future are good enterprises, because sufficient cash flow is the support for enterprise development. I liken the cash of an enterprise to the blood of an enterprise, and many companies go bankrupt not because they have no income or no profit, but because the cash flow is interrupted. Therefore, maintaining sufficient cash flow is very important. So when we choose a company, we must pay attention to the cash flow index. There is a famous saying on Wall Street: You can put cash flow in your pocket, but you can't put profit in your pocket. Because some of the net profits of an enterprise are accounts receivable, which have not actually generated cash inflow. If you only look at the net profit of an enterprise without looking at the cash flow, you may fall into a trap. Companies with abundant cash flow can survive the economic cycle and wait for the next round of economic growth. According to the general experience formula, the operating cash flow of a company should be 1 to 1.1 times the net profit, which is a relatively healthy number.

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Buffett believes that all real investments must be based on the assessment of the relationship between price and value. Strategies that do not compare price and value are not investments but speculation. Speculation is just hoping that the stock price will rise, rather than being based on the concept of the price paid being lower than the value obtained. In other words, the stock price is the price you have to pay, and the value of the company is what you get. This is actually about how to value stocks. Buffett explained this in his 2000 letter to shareholders. General measurement standards such as dividend yield, price-earnings ratio, price-book ratio, and even growth rate cannot be used for valuation unless they are linked to the amount and timing of the company's cash inflows and outflows to a certain extent. This clearly shows that only by basing on the future cash flow of an enterprise can the value of the enterprise be correctly assessed. Investment pays the price and gets the value, and the value is the discount of future cash flow. Buying stocks is equivalent to buying a company, which is equivalent to buying the company's future cash flow, which is equivalent to buying the intrinsic value of the company. Buffett starts from the relationship between price and value, and the final focus is still on cash flow. Only by basing on cash flow can the intrinsic value of an enterprise be correctly assessed.

In fact, many people do not have the concept of cash flow in their hearts when buying stocks. The reasons for many people to buy stocks are more short-term factors such as policy benefits, trend hotspots, and mergers and acquisitions, rather than cash flow. In fact, what determines the long-term investment value of a company is the ability of the enterprise to create profits for shareholders and the ability to create cash flow. In summary, buying stocks is equivalent to buying a company, which is equivalent to buying the business behind the company, which is equivalent to buying the profits behind the business, which is equivalent to buying the cash flow behind the profits. Investment earns the profit growth brought by the company's operation, which is unrelated to the rise and fall of stock prices, so you only need to focus on the enterprise value and don't have to care about the market price. The market price only tells us what price we can buy a good company at. Of course, we hope the price is as low as possible. That is to say, when we see the market in a state of despair, and many stock prices are greatly discounted, we should feel surprised. Because at this time, you can buy a good company at a lower price, and you should not be pessimistic and desperate. The mentality of many investors is that the higher the stock price rises, the more optimistic they become, and the more they fall, the more pessimistic they become. This is actually wrong. It should be that the lower the stock price of the company you are optimistic about, the more confident you are to layout, and the higher it rises, the more fearful you should feel. In other words, investing is actually a lot of the time against human nature, and the people who can do it are actually very few.

Recently, I have met many long-term investors in the A-share market who have defeated the market by doing Chinese characteristic value investment, that is, buying more shares when the stock price is low, and reducing positions at high points. Some have even achieved financial freedom. So value investment is still applicable in the A-share market, but some people find it difficult to overcome their inner greed and fear, and cannot truly do value investment. Value investment is not an empty talk, and it must be implemented. And by being a shareholder of a good company through value investment to cope with the short-term fluctuations of the market is also the best investment strategy. Chasing rises and killing falls, frequent trading is the root of many people's losses. Because from the perspective of the market, emotions are often the archenemy of many people's investments. Emotional fluctuations are too large, always being led by the market, and it is often difficult to defeat the market at this time, and it may even be eliminated in the market fluctuations. So I suggest that everyone insists on the value investment concept in practice, do not chase rises and kill falls, do not pay too much attention to the short-term fluctuations of stock prices, but adhere to the value concept, adhere to good companies and good funds, and wait for the next round of the market to come. We believe that the bull market in the A-share market will only be late, not absent, believe in the national fortune, this is the best mentality to embrace the future.