In early July, Tencent's market capitalization reached a new high, becoming the largest stock by market capitalization, and Ma Huateng once again became the richest man.

By July 21, the share price closed at HK $564, and Tencent's market capitalization exceeded HK $5.38 trillion. Recently, the projects invested by Tencent have risen sharply, which has become the focus of the market.

However, the market did not think so in 2018, when the lowest share price fell to HK $250, less than half of what it is now, and investors generally questioned such issues as the company's single profit model.

Interestingly, BABA, who was in the limelight at that time, was now attacked and questioned by investors. Think back to why Tencent, who had great scenery in 2017, was so questioned in 2018 and became a star again in 2020. How can he understand that investor sentiment fluctuates so sharply?

My views are as follows:

Investors tend to make decisions in the immediate future, while ignoring the long-term value. "short-sightedness" is a problem often encountered in investment. In the process of investment, many excellent leading companies are ignored due to short-term operational difficulties, which is likely to be a cost-effective speculative opportunity in the long run.

Tencent reached a new high, and the "richest man" changed ownership.

If you go up, you will have a good heart, but if you fall, you will be questioned. Tencent is still that Tencent.

In 2017, people jokingly called China's TMT (Tencent, Maotai) not for sale, while from the summer of 2018 to the fall of 2019, most people in the capital market were not optimistic about Tencent, and many people in the Internet industry were not optimistic about Tencent.

There are both short-term and long-term reasons:

For example, the game version number was suspended for more than half a year, but Battle Royale Games could not be cashed out; Wechat's traffic growth seems to have peaked; Douyin has sucked away Tencent's user time and advertising revenue; netizens will also say that Tencent's corporate culture and management are considered too "Buddhist", no dream, not enough "wolf nature" and so on. In 2018, BABA is considered to be invincible.

It took two years to find out that most people were wrong again.

As soon as the painting style changes, Tencent's investment enters the harvest period. At present, the hottest investment has become Tencent. The article, BABA, has been forced to the edge of a cliff by Tencent. In addition to Tencent, Pinduoduo, JD.com and Meituan are not only e-commerce transaction service companies, but also direct competitors of BABA. The article is also very sharp, the sinking market is expanding upward, JD.com has obvious advantages in logistics and self-credit, and Meituan has more than half of the market share of local life services. these three companies surround BABA's core business.

According to the Economic Observer, citing data from QuestMobile, the proportion of Amoy APP hours fell from 66 per cent in October 17 to 51 per cent in March 2020, while users of Pinduoduo increased from 13 per cent in October 17 to 26 per cent in March 2020.

From the Perspective of Behavioral EconomicsInvestors pay too much attention to the short term.

Irrational discount is an important part of behavioral economics.

When people evaluate the value of future income, they tend to use a lower discount rate for a recent period and a higher discount rate for a farther period. The study found that people take into account the uncertainty brought about by the passage of time when making decisions, which can cause most people to make seemingly "irrational" choices.

In the process of investment practice, the phased operation of listed companies is hindered. Under the premise of high market expectations, investors transfer from optimism to disappointment and short-term pessimism, which can easily lead to irrational behavior.

If investors pay too much attention to the short term, they will ignore the long-term "beauty" of listed companies.

Focus on cost-effective investment opportunities

BABA, who was "invincible" a few years ago, changed everyone's attitude by 2020, and market investors realized that BABA was also a strong enemy on all sides. Tencent's user stickiness was never suspected before, until the popularity of Douyin, and now everyone seems to have underestimated Tencent. Many industries and companies have been "questioned" by everyone, and with the change of the environment in a few years, the perception has changed.

At present, everyone is pessimistic, which will have a restraining effect on the rise of stock prices. But is there any cognitive misunderstanding here? Will the view change in the future?
Once it changes, there will be a lot of investment opportunities.

This is the way we look for investor misunderstandings, the process of correcting our cognitive bias, and the process of making a profit.