Source: smart investors

When it comes to Fidelity, the first thing that comes to mind is investment guru Peter Lynch.

At Fidelity, however, there is also a legendary fund manager who is not only the heir chosen by Lynch himself, but also maintains an annualised return of 13.8 per cent over the past 30 years, well above the index.

He is Joel Tillinghurst (Joel Tillinghast), a legendary investor known as the "T God".

In 1989, Tillinghurst founded the Fidelity low-price stock fund. In 28 years, the average annual return was as high as 13.8%, and the size grew to more than $40 billion.

Tillinghurst is as diligent as Peter Lynch and has an amazing memory. When it comes to the more than 900 stocks held by the fund, you can count them.

Peter Lynch called him the "best rock flip" in the investment world.

As an active fund manager, he would also say, if you think of stock selection as an interesting technical job, and believe that you have the ability to solve all kinds of puzzles in the market, I will be very happy, because our views are the same.

On the contrary, if investment research makes you feel boring and the stock market is just a boring probability game for you, then index funds are more suitable for you. "

In his book thinking about Big money, Tillinghurst gives a very comprehensive introduction to his past investment methods, including how to deal with market uncertainty, how to pick a company, and how to view technology stocks.

Many "old theories" are the same.

Smart investors read the book carefully and extracted 56 of the most valuable golden sentences of Tillinghurst about investment and shared them with you.

First, holding patiently is the key to answering the question of "what is it worth?"

1. A good company needs a good price in order to have investment value. Even if you find a good company, it doesn't mean that investors can buy shares in the company at any price.

2. If you are in a hurry to sell your shares, the price you sell is the market price, not the value.

3. Mr. value usually arrives late. In most cases, value is not proved until long after it is bought or sold, and is not shown in a direct way.

4. Holding patiently is the key to answer the question of "how much is it worth?" Constantly predicting "what will happen next" will prompt investors to trade frequently.

Patience is an excellent quality for investors, but for speculators, it represents the risk of unease in the process and outdated information. Patience is valuable for companies that have long-term advantages.

6. Focus is also a sharp weapon for my investment. I only buy stocks of companies whose business is easy to understand, management is honest and reliable, and products are monopolistic at low prices. Of course, I also unabashedly admit that my investment performance is very mediocre in the magnificent bull market.

7. All investors should have the concept of fair value, which is the bright light on the investment road.

8. When people focus on the future, they will not be arrogant, because the uncertainty of the future is awesome.

9. You should spend more time collecting information about the target of your investment instead of tracking its price. If the relevant news becomes irrelevant within a year, just skip it. Paying too much attention to price changes may cause you to miss a real turning point.

10. as the saying goes: keep your eyes open before marriage and turn a blind eye after marriage, which is the secret of a good marriage, and it also applies to stocks. Why make a hasty decision? You may see more clearly tomorrow.

Second, how to predict a company?

The facts I seek often look old, but they stand the test of time. For example, a company's competitive position in the industry, how management uses the company's cash flow.

12. in the process of predicting the growth of a company's profits, there will not be a clear signal of market timing as you might think. Everyone is trying to predict the future, and you can only be rewarded if your expectations are different and correct from others.

13. You can't make a profit quickly through TV programs or the Internet.

To successfully apply macroeconomic data and theories, you must use historical cases as a reference, carefully study the causality between each event, and be wary of your blind spots.

You have to reflect on the effectiveness of the financial model you learned in class, and the background of the application of the model, and eventually come to a series of vague conclusions.

14. Unlike the subject of studying the grand universe, when studying specific stocks, it is easier to know what you do not know.

Third, the best managers are "enthusiasts" of products.

15. In addition to key skills such as leadership, I will focus more on two characteristics: the unique talents of managers and the ability to allocate capital.

16. Why do I focus on traits, not managers, on the success of a business decision? In short, it's because the traits don't change, and the business strategy changes all the time.

Everything that happens in the development of a company shapes its characteristics. A company must constantly try new opportunities to ensure its survival, but only some opportunities may be suitable for the company.

17. When it comes to business and investment, the secret of success is to do something valuable that no one else does. The manager's job is to protect and expand the characteristics of the company, because once someone imitates, it will lose its freshness.

18. The important basis for judging whether the management team has management ability is whether the team can explore and cultivate the unique characteristics and abilities of the company.

The best managers are product enthusiasts who are willing to buy their own products.

Fourth, when investing in technology stocks, we should pay attention to the company's innovation ability and stable daily income.

19. High-tech companies generally have strong initial growth and shocking profitability, and investors tend to flock to them. Unfortunately, these companies either have a short life cycle or have a great deal of uncertainty.

20. Billionaires in the tech world need not only great insight, but also great luck. Having both allows them to reap huge profits from an undiversified portfolio.

The element of luck is often overlooked because success is too prominent. In fact, failure is everywhere, but no one pays attention to it. For every Zuckerberg, there are hundreds of technology entrepreneurs and employees whose years of efforts before success are almost unknown.

22. Sometimes when you expose yourself to manageable risks, luck may also pay off. My so-called luck is not to allow investors to buy lottery tickets, but to select technology stocks according to certain principles when the risk is manageable.

23. Investors in technology stocks often ignore value, regardless of industry competition and out-of-date products.

Crazy, hasty deals often end up disappointing. If they make a little improvement, focus on profitable, cash-flow companies, and fully consider the price and value of the stock, then their performance will improve significantly.

We have got a valuable inspiration from venture capitalists: when investing in technology stocks, we should pay attention to the company's innovation ability and stable daily income.

5. Four elements directly related to corporate value: profitability, life cycle, growth and certainty

24. The four elements directly related to corporate value (profitability, life cycle, growth and certainty) reflect the law of human social behavior, which is different from the law of physics.

For example, high profit margins can reflect the buyer's desire for the product, but this degree cannot be quantified and it is not known how long it will last.

History has proved countless times that the value of many companies will eventually return to zero after the lack of a profit driver.

26. The models behind most knowledge industries have economies of scale, that is, the larger the scale, the lower the marginal cost. In other words, the cost of a product launched by a small start-up company will not be the lowest in the market.

Scale effect is also the reason for the rapid development of Silicon Valley companies.

27. Unlike consumer goods, once electronic products have better or cheaper alternatives, brand loyalty has little effect.

28. Generally speaking, I avoid investing in fashion products or products that are obviously out of date, and I also avoid industries where competition is too fierce.

I will not invest in a company that is already losing money unless the future profit margin is clearly visible.

6. Attach importance to "thinking" and find evidence and reasons to refute your own views.

29. If we believe the rumors, there are only two reasons: one is that we are not thoughtful, and the other is that we come to the wrong conclusion after using the wrong information.

Most people like to study other people's investment notes. These investment notes are often all-inclusive, lengthy, and even record the author's entire investment career.

After a circle of research, you will find that at this time, other people's decision-making model is not applicable to you, and then fall into the cycle of prediction failure.

31. Anchoring dislocation and the concept of "what we see is everything" make us ignore the important step of thinking and one-sidedly think that we are close to the truth.

32. Try thinking in reverse. It may work wonders. Look for evidence and reasons to refute your point of view, and then think carefully about whether the evidence and reasons are reasonable.

33. Separate ideas from people, and let ideas compete, rather than people and ideas being entangled.

7. Firmly believe that you are right and do not know what is wrong with the market. This is not confidence, but arrogance.

There are some questions you can never answer, and no one else knows the answer, so you should choose to accept the status quo. You can evaluate your circle of abilities and find answers to questions that you have the ability to answer. Investors who are unable to face the facts objectively need others to manage their finances for them.

Wall Street is like a magnet, attracting a lot of self-righteous people.

36. You firmly believe that you are right, what is wrong is the market itself, and you do not know where the market is wrong. In fact, this is not confidence, but arrogance.

37. It is necessary to have proper confidence in your skills, knowledge, logic and patience, but when the market is not sure, you should find your limitations.

38. The stock market will punish human-specific feelings or behavior, and of course it will compensate in other ways.

8. Stocks with low volatility can make investors patient, which is my "favorite"

39. Only when the tide recedes does we know who is swimming naked. Only after the stock market crash will investors look at market risk with awe. In the final frenzy of a bull market, people tend to turn a blind eye to risks.

There are hidden costs for many of the things that human beings want, such as action, excitement, fun, comfort, identity, fame and privileges.

Of course, there is always another side to the coin, patience, boredom, anxiety, courage, pain, loneliness, being like a nerd, or even acting like a fool, which can benefit people.

41. Spiritual victory and panic are the two most expensive emotions and the root causes of unprincipled trading.

42. Only stocks with low volatility can make investors patient, and my job is to accept these "boring" small fluctuations, which are my favorite.

43. There are always people who predict that the sky will fall. If it does, neither you nor I can change it.

Ignoring the margin of safety is bound to learn a lesson

44. If you put the investment principle of "don't lose money" first, then how to reduce the "margin of insecurity" is the key issue you need to consider.

45. Speculators who ignore the margin of safety are bound to learn a lesson.

46. The safety standards for my assets are as follows: (1) avoid hasty decisions. (2) avoid misunderstanding the facts. (3) avoid investing in projects with foreseeable risks of credit abuse. (4) avoid investing in obsolete, commoditized and highly leveraged projects. (5) avoid investing in projects that are unpredictable for future development.

47. Leveraged trading is as intoxicating to investors as alcohol, mired in over-optimism and overconfidence.

48. Whether long-term or short-term, the use of leverage when investing will deal a heavy blow to your principal and will eventually be wiped out by the market.

Realizing that something is crazy doesn't mean it will stop.

49. if you want to find it in the early stages of a bubble, you must first ask yourself "what is it worth" rather than "what happens next".

Realizing that something is crazy doesn't mean it will stop. Similarly, investors who do not hold continuously rising assets will be forced to buy to maintain growth.

51. In social life, if the views of the general public are the same, then the society will be more harmonious, but in the fields of investment and science, discovering the truth is the top priority.

Investors should not expect too much from any one trading strategy. Whether the trading strategy can beat the market, the key depends on what absolute advantage the strategy has, and whether the strategy is easy to be imitated, preferably supported by theory or data.

Lifelong study is the best defense

53. invest in areas you understand and are familiar with. This principle is the amulet of your investment journey.

54. One person may be competent in all industries, but some people are more likely to become elites in some fields. This order of abilities is very important.

55. Successful people focus more on the most important things and actions by simplifying their lives. If you don't, you'll find yourself either running in a cycle like a hamster in roulette, or stuck in trifles.

56. your circle of reason and ability is something you need to stick to forever when you invest, and you must never compromise. If you have a wide circle of abilities like me, then lifelong learning is the best defense.

Edit / lambor