Author: London trader
"in the face of 200000 reports a year, investors who make good use of research reports win more easily."
Why make good use of the report?
The research report is called the cornerstone of the investment industry. However, there are a lot of reports in the market at present.A-shares alone generate nearly 200000 research reports a year!What is the quality of most of them? you must have a stroke in your mind.
In this era of information explosion, all investors will face a problem:How to read the research newspaper well?After all, in the face of 200000 reports a year on the marketInvestors who make good use of research reports win more easily.
We divide it into specific categories.Three small topics:
1. Is it worth reading?
two。 What should I read?
3. How should I pronounce it?
How to read the research newspaper well?
1. First judge whether the research paper is worth reading?
Should do ≠ could do ≠ would do ≠ will do
It is extremely easy to predict the behavior of market participants, especially policy makersConfuse should do (should do), could do (can do), would do (want to do), will do (to do)。
The ultimate goal of the analysis is will do. But a lot of research and analysis are oftenBased on should do to do analysis, mistakenly equate should do to will do。
This bias is particularly evident in domestic researchers with a doctoral background in social science. The possible reason is that in the social science papers of domestic colleges and universities, the foothold of research is often policy recommendations (will do).
A lot of research and analysis often overstep the business.Unconsciously conduct research in a way that finds the best path for markets or policy makersIn the end, it is not surprising that its research unconsciously replaced will do with should do.
Those.The research report of "public knowledge" especially needs to be vigilant.Because it implies that the researcher's analysis path may already existSystematic bias。
Predicting the reasonable posture of will do should be carried out from the angle of a large set. ThisThe large set contains would do (clarifying motivation), should do (path judgment), and could do (conditional restrictions). On the basis of this comprehensive analysis, the final judgment of will do (final result)。
Using this analytical framework can help you improve the accuracy of prediction on the one hand, and it can also be used on the other hand.Help youQuickly judge whether the report is worth reading.
2. What should I read in the research newspaper?
Let's start with the core conclusion:
＊Logic> Conclusion＊
＊DifferentViewpoint> sameViewpoint＊
＊老Report> 新Report＊
＊UnpopularResearch > PopularResearch＊
＊Know the truth at a glance＊
Logical framework > indicators > data > conclusion
Logic
When it comes to research reports, it is estimated that the first thing that comes to mind is the seller (brokerage / investment bank) report.
However, most of the seller's research reports are more or less sales-oriented, that is, the so-called:"the logic can be seen, and the conclusion can be deleted directly."。
Most people are concerned with the conclusion, but if you come with a learning attitudeMost of the time, the conclusions of research reports are actually the least important.。
Because the conclusion can be very wrong, but the logic and research framework can remain unchanged for a long time.
Why are Marx, Coase, North and others?Not because of its conclusions, but because of the discovery of a new framework.To examine the current situation and analyze problems.
The most important thing for a good report is a careful, beautiful and unique way to cut the cake. Once the essence is absorbed, it may take 10 or 100 years.
If we only follow the conclusion, the consequence is that after a few years, apart from a lot of facts that have already happened, we still do not have an effective analytical framework, and our so-called professional experience can only comfort ourselves. That's what London traders often say.Want knowledge accumulation, not knowledge experience'
Logic and research framework are the core of all research, which cannot be overemphasized.This is the metaphysical, which is called the way.
Index
On the basis of Tao, there must be skill.
The effective indicators mentioned in the report should also be paid attention to. This is usLearn what observations can be used to dissect the marketAn important way. Moreover, the author's real thinking can be deduced from it.
There are times when the framework and logic of a report are very plain, but the indicators used are eye-catching, such as (the following are all good reports, and I'll just give you an example):
*Ten years ago, the inflow of migrant workers in southwest China was observed through the sales of chili peppers in Guangdong to reverse the trend of foreign demand.
*Some time ago, Gao Shanwen reversed the inflow of population by observing the number of pupils entering school.
The choice of these indicators can give readers a lot of other inspiration.
data
Then there is the data and information in the report.
When doing investment research, a lot of data may not be easy to obtain directly, but many seller reports have helped us calculate indirectly, which has greatly saved time and energy, such asThe example of Maotai mentioned above。
However, when using the data and indicators reported by the seller, we must pay attention to the assumptions and methods behind these calculation results, so as not to be brought into the pit by fake data.
Conclusion
As mentioned in the previous paragraphs, the conclusions of the study should be the last to be concerned.
In general, a good report has logic, analytical framework, indicators and data, and the conclusion generally does not deviate too far.
但Even if the final conclusion deviates far away, we should not talk about heroes in this way.. Like Carl. Marx, his research conclusion may be problematic, but even if he reads it two centuries later, he will still be impressed by his grand and exquisite framework of problem analysis.
Conclusion 'being beaten in the face' is not necessarily something wrong with its framework and logic, it may be something wrong with the data or the standing point of the research. But this does not prevent us from learning its exquisite analytical framework.
In addition,No matter how good the report is, it can't replace my final decision.If we fantasize about finding a research report from someone or a company so that we can compete in the market, we have already lost in the first place.
Different views > the same point of view
In a swarm of big A shares scattered again, if there are a total of 10 reports on Company A, 8 are recommended to buy, then the remaining 2 should be worth looking at.
after all,It takes courage to follow the general direction of the market.And this courage often comes from detailed and reliable arguments-that is, why do you not like this company when most people are optimistic about it?What's the reason?？
After we have a basic analytical framework, independent discrimination, plusHumble self-confidenceAt the same time, you mustDeliberatelySeek different opinions. Only after colliding with high-quality dissent can we better improve our analytical framework.
I'm looking for the smartest people to question my point of view. Only when I fully understand their ideas, I choose to refuse or accept their opinions. This repetition year after year not only increases my chances of being right, but also allows me to learn a lot of true meaning.
-Ray. Dario.
Old report > new report
Reports are divided into two categories, one of which isEvent-driven class(for example, a study of the short-term impact of Brexit), the other isNormalized research.Here we focus on the latter (most of the reports belong to this).
Most of the timeIf we feel that this research paper is meaningless after a year, then there is a good chance that it is not worth reading carefully.。
Good old bottles can be filled with new drugs.A good report can be published 10 years ago, but maybe just updating the numbers will soon turn into a great new report.
Time is a good discriminator.For exampleThe 2004 Merrill Lynch report on the investment clock is a classic.
Unpopular Research > Hot Research
What everyone is talking about and what everyone is looking atIn fact, there is no need to spend too much effort to repeat the research, because there is a high probabilityHas been included in the current pricing (priced in). When you go in at this time, most of the time you are the catcher.
In addition,Hot research because there are too many people studying, and the report convergence is too high.It's hard for us to get a lot out of it, on the contraryUnpopular research, because there are few people who follow it, the probability of finding treasure from it is very high.。
Of course, if you can find high-quality non-mainstream views in hot research, congratulations, you may have found an opportunity for excess returns:
Your (correct) view-mainstream view | = Cognitive bias = > excess return
Know the truth at a glance
The most important thing in the domestic financial circle is to teach the truth, especially the 'philosophy' and 'realm'.
When you turn on the mobile phone, your eyes are full of 10W + pushed by the major self-media: 'several layers of investment', 'the Bible of the investment world' and so on.
Even professional sellers often throw out items such as' baby bottom 'and' diamond bottom'in order to attract the attention of investors.The concept of popular style。
Buyer's fundThe report is usually morePay attention to detailsExamine investment from the bottom up with a solid industry survey. After all, the buyer's internal research team is usually more specialized than the seller, and considering the professional reputation in the eyes of investors, the buyer will not easily publish a flawed research report to fool the market. Because of this, once a big buyer dares to speak out in public, there must be something good to see.
However, in the domestic financial environment, the buyer's internal report is not available to most people.There are several reasons.：
When the buyer's fund wants to be long. As in the previous example, domestic buyers and sellers are often deeply bound communities of interests, and they have enough industry tacit understanding to push up a certain class of stocks.The seller can act as a gun for the buyer, and the buyer can safely stay behind the scenes.；
When the buyer wants to go short. The most important thing to short against the market is not only logic, but also to win market recognition. Overseas short funds are particularly keen to make their detailed short reports public in order to maximize their market impact. But,Since there is no domestic short selling mechanism, there is no reason for the buyer's fund to issue its own bearish report.。
Therefore, the domestic high-quality buyer research is actually insulated from the majority of investors.
Fortunately, there are many "big bears" for newcomers to learn from in overseas markets. Muddy water (Muddy Waters), whose name comes from the Chinese word "fish in troubled waters", is a good example.
The Muddy Waters report is usually illustrated, but it is not a common investment bank chart, but it is more about photos and evidence from field surveys.
Muddy Waters attaches great importance to data, but does not focus on the disclosure of financial statements, but a lot of grass-roots research (for example, counting inventory one by one, interviewing employees / suppliers one by one), using the most 'stupid' 'local' approach to verify the authenticity of the data, and then using bottom-up logic to deduce the true value of the company.
This kind of insightful research reports often give people a great shock. To borrow a famous saying from Luo Zhenyu:There is no road to sincerity. Sincerity itself is the road.
3. How should I read the research newspaper?
The core points are as follows:
Read more to read less
Frame carding, logical notes
First pull out the framework, and then sort out your own thinking.
Don't be superstitious about the sign, what is written is more important than who wrote it.
Read more to read less
At the beginning, you can read a lot of reports freely, and the more, the better. There are several purposes:
1. Form a preliminary perception of the analytical framework and method system in the market
two。 Only after reading what is a junk report can you recognize a good report and cherish a good report.
So read more first and then read less. That is, what teachers often teach at school: first read the book thick, then read the book thin.
The so-called less reading is to pick out a number of classic reports and read them carefully (personal advice for seniors to recommend).
Frame carding: logical schematic notes + critical thinking
How to read it intensively?
It is recommended that when reading the report, the whole framework of the report should be extracted by means of logical map.
PS: there are a lot of mind mapping software on the market, one search a lot, personally recommend ProcessOn. A series of articles on the dollar cycle published by the official account of traders in London were based on it.
# Yes, I have advanced lazy cancer. The dragging time is in years, and the time is one and a half years (╥ years ╥) o. Recently, after being urged to complain by readers, I quickly fished out this dusty thinking note from my notebook for almost a year. #
The advantage of this approach is that only when we sort through it ourselves can we really understand the core ideas of a report, and we can still recall it clearly even after a few years.
First pull out the framework, and then sort out your own questions and thoughts.
When sorting out the analytical framework, you must read it with a mean and critical eye.
Remember that when we read the report, our posture is not a passive receiver, but an active recipient.
Our reception of information should be a presumption of guilt rather than a presumption of innocence (that is, we need to assume from the beginning that the reports we read are biased and misleading, unless they are logical enough to convince us)
# for example, pull out the argument in the report: 1.1meme1.2 and 1.3 below the three points of the report, respectively. Ask yourself what the supporting arguments are and what are the data. What is the relationship between the arguments? Is interconnectedness strictly prohibited? Does the logical chain run through all the time? Does an assertion have an implied hypothesis (implied consumption)? when is this assumption valid and when is it invalid? Does it miss some important points in the analysis? What are the risks it analyzes and predicts? May it be overestimated or underestimated? If there is a prediction, then which part of the analysis is more likely to come from? Wait... #
As for how to systematically conduct critical thinking (critical thinking)
In addition to reading the classic reports (recommended) through the above methods, overseas students can also find online logic training questions similar to GMAT, search handouts and practice.
Develop the habit of critical thinking, so that we are no longer passive receivers of information, but discerning readers. This is a necessary condition to be a good investor.
Knowledge accumulation, not knowledge experience.
Detailed examples of the importance of output have been given above:
Whether it is note collation or report release, all kinds of cloud notes can help you continue a good habit of data collection + note collation. At present, nearly 10,000 notes + reports have helped me build my own database and help me build and constantly improve my investment knowledge system.
What is admirable about Qian Zhongshu is not only the masterpieces such as besieged Fortress, but also his reading notes that read the book thoroughly. Some people say that many people say that it is only after reading Qian Zhongshu's notes that they know what a real writer is.
Qian Zhongshu has a good memory and never forgets. He himself does not think that he is so "divine". He is only good at reading, willing to work hard, not only to read it, but also to take notes; he will not only read it twice, but also read it three or four times, constantly adding to his notes, constantly connecting his new understanding with the feelings of the past, forming his own knowledge network.
Therefore, although Qian Zhongshu reads a lot, it is not easy to forget. His wife Yang Jiang once recalled: taking notes takes a lot of time. Zhong Shu takes about twice as long to take notes as he does when reading this book. He said that if you read a book for the second time, you will always find that there are a lot of negligence when you read it for the first time. The most wonderful sentences have to be read several times before they are found.
The manuscript Collection of Qian Zhongshu can be regarded as an example of notes. Friends who have time are recommended to read it. If they have no time, they can spend half an hour reading the preface made by his wife Yang Jiang.
Don't be superstitious about the sign. What is written is more important than who wrote it.
* what is written is more important than who writes it.
Investors force GE Gao (especially big brands like Goldman Sachs Group and Morgan), but don't be influenced by the name of the company or the author when reading the report. When we read many reports, especially those of the so-called top investment banks, we will find that those bullish gold-lettered signboards are not necessarily the best or even good.
Newcomers should pay special attention to not seeing those dazzling names, almost kneeling, and don't disdain what it writes just because the other person is unknown. In fact, I have read some lesser-known professional research companies, because they do not have investment banking business and rely on research for a living, but do research with very high quality.
Here I would like to pay tribute to the anonymity of its articles. As for the reason, it replied: "The main reason for anonymity, however, is a belief that what is written is more important than who writes it." (simple rough translation: what is written is more important than who wrote it).
Source: London trader