First, how do the masters deal with the slump?

• Buffett: stay calm and hold it for a long time

In the view of Warren Buffett, the best way for investors to face the sharp fluctuations in the stock market is to remain calm and stick to the long-held investment principles.

As a stock god who has invested for more than 50 years, Buffett warned investors in an interview in 2016: "when the stock market falls, do not pay close attention to the performance of the stock market." If an investor is worried about a fall in the stock market and then wants to sell his stock when the stock market picks up, such an investor will not get the desired return in the end. "

Buffett has always stressed that long-term investment is an important factor in achieving ideal returns. He believes that the return on investing in the stock market comes from long-term holdings of high-quality companies. If investors buy shares in high-quality companies and hold them for 10, 20, 30 years, then they will eventually get a good return.

Buffett explained in his annual letter to shareholders that the market is always volatile, so for every investor, regardless of the depth of investment experience, the best option is to remain calm.

While markets are usually rational, markets occasionally go crazy, he wrote. For investors, seizing opportunities does not require much wisdom or economics degree.

All investors need is the ability to ignore market panic or frenzy and focus on fundamentals. In addition, it is also important to maintain boring or even stupid intentions for quite a long time.

• Graham.

First, never lose money; second, never forget the first rule.

Graham is Buffett's mentor, the father of securities analysis, and the ancestor of value investment. In September 1929, the Dow rose as high as 381, and then began to fall. On October 29th, the Dow Jones index fell 12%, which was described as the "worst day" in the 112-year history of the New York Stock Exchange. It was the most famous "Black Tuesday" in history.

In November 1929, the Dow fell as low as 198 and then stabilized and rebounded. By March 1930, it had risen to 286 points, a rebound of 43%. So many investors think the worst is over and the stock market is about to turn upside down. Graham felt the same way, so he began to go to the bottom.

He copied all the good stocks that were very cheap in terms of valuation, and in order to achieve a higher yield, he also leveraged the margin. But the stock market rebounded until April and then plummeted, with the Dow falling 33% in 1930, while Graham's fund lost as much as 50.5%.

By July 1932, the Dow had hit a low of 41, down 89% from its peak of 381, while Graham's fund lost 78% over the same period, a super-bear market that nearly wiped out his fortune.

Graham later made a comeback and wrote the investment bible "Securities Analysis" and "Smart Investor", summing up an eternal basic principle of value investment: margin of safety.

Safety first, profit second.

• Dario: stay calm and operate in reverse

Like Buffett, Dario, founder of Bridgewater, the world's largest hedge fund, believes that investors need not panic in the face of stock market falls and should remain calm.

Mr Dario says it is always easy for investors to sell when the market falls, but succumbing to fear is not a wise strategy because it will not succeed.

On the contrary, when the market is going down, investors need to do the opposite, that is, when you are no longer afraid, you may need to sell; when you are scared, you may need to buy.

At present, the Bridge Water Fund has become the largest hedge fund company in the world, with $150 billion in assets under management.

In principles, Dario shares three things he learned in a market crash: first, you should not be ridiculously overconfident and indulge yourself to be swayed by emotions. No matter how much I know, no matter how diligent I am, I should not confidently make absolute assertions.

Second, I once again understand the value of studying history; third, it is very difficult to grasp the timing of the market. One of the keys to being a successful investor is to make risky bets on your highly confident investors and fully diversify them.

Wise people always focus on sound fundamentals when they go through all kinds of ups and downs, while frivolous people follow their feelings, react emotionally, flock to hot things, and give up when they are not hot.

The surest way to have many advantages without being exposed to unacceptable disadvantages is to make a series of good, unrelated bets that balance and complement each other.

• Peter Lynch

The historical law of stock market volatility tells us that all sharp falls will pass and the stock market will always rise higher. Historical experience also shows that the sharp fall in the stock market is actually a good opportunity to release risks and create investment, and to buy stocks of very good companies at very low prices. But bottoming is not that simple. Instead of constantly copying the "bottom" and being trapped, it is not too late to intervene after the bottom appears.

When the US stock market crashed in 1987, many people went from millionaires to abject poverty, had a nervous breakdown and even committed suicide. At that time, American securities superstar Peter Lynch managed more than $10 billion of the Magellan fund, which lost 18% of its net asset value, or $2 billion, in one day.

Lynch, like all open-end fund managers, has only one option: sell stocks. Lynch had to sell all his shares in order to cope with the unusually large redemption.

More than a year later, Peter Lynch recalled that he was still scared. "at that moment, I was really not sure whether it was the end of the world, or whether we were about to fall into a severe Great Depression." or is it that things are not getting so bad, just that Wall Street is coming to an end? "

After that, Peter Lynch continued to experience many stock market slumps, but still achieved very successful performance.

First, don't sell all the shares cheaply because of panic. If you sell desperately in the midst of a stock market crash, your selling price tends to be very low. The market in October 1987 was frightening, but there was no need to sell the stock on this day or the next.

The stock market began to rise steadily in November of that year. By June 1988, the market had rebounded by more than 400 points, or more than 23%.

Second, have firm courage to hold good company stocks. Third, dare to buy good company shares at a low price. A slump is the best opportunity to make a lot of money: great wealth is often made in such a stock market crash.

• Soros.

The history of the world economy is a series based on illusions and lies. The way to gain wealth is to recognize the illusion, invest in it, and then quit the game before the illusion is known to the public.

Soros thought before 1987 that the Japanese stock market was in a huge bubble and shorted Japanese stocks, resulting in a fiasco. The Japanese stock market was bullish in 1989. Soros advocated in the Wall Street commentary that the US stock market would be strong and the Japanese stock market would collapse, and the result was just the opposite: the US stock market crashed, but the Japanese stock market was strong.

In September 1987, Soros transferred billions of dollars of investment from Tokyo to Wall Street. However, the first major collapse was not the Japanese stock market, but Wall Street in the United States.

On October 19, 1987, the Dow Jones average plunged 508 points in New York, setting a record at that time. In the following week, the New York stock market fell all the way. On the other hand, the Japanese stock market is relatively strong. Soros decided to sell several large shares of long-term shares.

After capturing the relevant information, other traders took the opportunity to smash down the sold stocks, reducing the cash discount on futures by 20%. Soros lost about $650 million to $800m in the Wall Street crash.

The collapse caused quantum fund's net worth to fall by 26.2%, far more than the 17% decline in the u.s. stock market, and Soros became the biggest loser of the disaster.

In the final analysis, Soros's fiasco was caused by speculative psychology, speculating on the timing of the market and went to a situation of huge losses.

The mistake is not shameful, the shameful thing is that the mistake is obvious and not to be corrected. Take risks, beyond reproach. But at the same time, remember, don't put all your eggs in one basket. It doesn't matter whether you are right or wrong. The key is how much you lose when you make a mistake and how much you earn when you judge correctly.

• Jim Rogers: buy what it's worth and sell it crazy

Wall Street investment guru Jim Rogers once pointed out that you should wait patiently for a good time, make money and take a profit, and then wait for the next opportunity. Only in this way can we defeat others.

Market trends often show long-term depression, in order to avoid putting money into a stagnant market, investors should wait for the emergence of catalytic factors that can change the market trend. Buy what it's worth and sell it crazy.

• Philip Fisher

Philip Fisher is one of the pioneers of modern investment theory, the father of growth stock investment strategy, godfather investment master, and one of the highly respected and respected investors on Wall Street.

You have to learn to spend a lot of time studying, and you are in no hurry to buy. In a continuously falling market environment, don't buy unfamiliar stocks too quickly.

In 1929, the US stock market was in a crazy bull market before the crash, but Fisher found that the outlook for many American industries was unstable and there was a serious bubble in the stock market.

In August 1929, he submitted a statement to senior bank executives that "the worst big short market in 25 years will unfold." "the report. This can be said to be the most amazing stock market forecast in Fisher's life, but it is a pity that Fisher is "bearish and long".

"I can't help being bewildered by the power of the stock market," he said. So look everywhere for some relatively cheap stocks, because they have not yet risen in place. "American stocks suddenly collapsed in October 1929, and Fisher was not spared. He suffered heavy losses in the stock market crash, and Fisher lost all his money.

Fisher is beginning to understand that the main factor determining stock prices is not the current Pmax E, but the expected Pamp E in the next few years. He said that if you can develop your ability to determine the possible performance of a stock in the next few years within a reasonable upper and lower limit, you can find a key that will not only avoid losses, but also make a huge profit.

• Bill Miller

"I often remind my analysts that your information about the company is 100% representative of the company's past, and the stock valuation is 100% dependent on the future. "

In the 15 years from 1991 to 2005, the Legg Mason value trust fund managed by Miller beat the S & P 500 index continuously, created the most brilliant performance record of fund managers in history, and was praised as the most successful fund manager of this era. However, in just one year, the honor was ruined by him himself.

During the subprime crisis, many previously very good companies' stocks fell sharply in succession, and Miller thought investors were overreacting, so he bought against the market. He thought the crisis was a great opportunity to make money, but it turned out to be the worst bear market since the Great Depression.

Although his reverse investment decisions over the past 15 years turned out to be correct, he failed miserably this time. Miller's stock list is like a list of martyrs in this crisis: AIG, Bear Stearns, Freddie Mac, Citigroup Inc, Washington Mutual, etc.

"I failed to properly estimate the seriousness of this liquidity crisis from the beginning," Miller, 58, said in an interview in 2008.

Although Miller used to make money from market panic, he said he didn't expect the crisis to be so serious and fundamental problems so deep that all the high-quality listed companies that were once the market leader collapsed.

"I'm still inexperienced," Miller said. "it's terrible that every decision to buy stocks is wrong. "

Lessons learned "any portfolio that excels well can succeed within a certain period of time because of the insurance nature of misplaced prices." The market's estimate of this future number is wrong. By comparing the market, the valuation of the company and our own valuation of the company, we use a combination of multiple factors to find out the price mismatch. "

Second, if the stock market plummets, what should ordinary investors do?

• Situation 1: the stock in hand has fallen to the cost zone

Suggestion: in this case, cautious investors should choose to leave the market, the more radical should also set a stop price, and then observe for a day or two before making a decision. Do not blindly kill down, and do not have emotions about the stocks you buy. At this moment, you must be clear-headed.

• Condition 2: the stock in hand has already lost money.

Suggestion: this kind of loss also needs to be classified, investors can check the relevant information, if the stock belongs to the fund heavy stock, then do not blindly cut the position, even in the case of the rapid collapse of the market, can cover positions in batches, spread low costs, and fund to the end. (this advice is not appropriate in the event of a bear market decline or a stock market crash.)

And if, by looking at the data, it is found that the main force of the stock is mainly controlled by individual large investors, when the market continues to be poor, investors should be resolutely out of the game to preserve cash and strive for greater initiative. Because the main force of this kind of stock generally does not protect the market when the market really plummets.

In addition, there are some stocks with relatively light turnover, and there are no obvious signs of main intervention, so we must set a stop-loss price. The nature of this kind of stock is mainly to follow the trend. Once it falls below the platform formed for a long time, we must resolutely leave the market.

• Situation 3: half is money and half is stock.

Advice: if investors make a profit on this part of the stock and the market trend is always unclear, then sell the stock and keep the cash. After all, there are many opportunities in the market, so keeping cash can have a greater say in the market.

If this part of the stock has lost money, then investors should choose to replenish their stocks quickly after a sharp fall in the market and when there is a stabilizing trend. And if after filling positions, the stock rose a lot on the same day, it can be done in disguise to lock in part of the profit that day.

• Situation 4: all the money in hand wants to enter the market.

Suggestion: if you are a radical investor and have a certain ability to watch the market, you can rebound according to the market situation, but you should give priority to short-term thinking.