The odds are that this year will not be a good year.

The sequelae of global water release are beginning to show signs, years later, A shares all the way down, whether it is new leek or old leek, all complain incessantly. A year ago, "hundreds of billions of funds ran out in a day". Now I should have known this with breast-beating. Maotai, which was blown to the sky yesterday, was beaten by ten thousand people in the twinkling of an eye.

Before the shadow was over, Warren Buffett released his annual open letter to shareholders on Berkshire Hathaway's website.Balao's wisdom comes at the right time.。

01 Three key points of letter to shareholders

The 90-year-old investment legend has issued an open letter for 60 years in a row and has become a must-miss event for the global investment community.

This year's shareholder trust has a lot of important content, involvingThe origin of Berkshire Hathaway, how Buffett and Munger find partners, how to investigate businesses, and how to observe and predict economic changes in the next decade!

Pick up a few key points.

1. Performance and positions in 2020

In accordance with generally accepted Accounting Standards (GAAP)Berkshire's profit in 2020 was $42.5 billion, down nearly 50% from $81.417 billion last year.. It consists of operating profit of $21.9 billion, realized capital gains of $4.9 billion in shareholdings, unrealized net capital gains of $26.7 billion from floating shareholdings, and writedowns of $11 billion dragged down by some subsidiaries and affiliated companies.

As of December 31, 2020, Berkshire Hathaway announced the top 10 positions at the end of the fourth quarter of last year as follows:

BYD is worth mentioning, which was not yet in the top 10 of Berkshire's stock portfolio at the end of 2019. BYD's share price soared 3.08 times last year, inflating the value of the investment (38 billion yuan). Overall, the market value of his position in BYD has increased nearly 25-fold in 12 years.

Never short the United States

At present, there is a growing concern about the collapse of US stocks, especially the soaring US bond yields and the market panic caused by the expectation of raising interest rates in advance, which together with the media public opinion makes many investors feel as if the financial crisis is coming again.

But Buffett has great confidence in the United States:

Today, many people around the world have created similar miracles and created a wide range of prosperity that benefits all mankind. However, in a short 232-year history, there is no incubator that unleashes human potential like the United States. Despite some serious disturbances, the economic development of our country has been amazing.

In addition, we retain the desire given to us by the Constitution to be a 'more perfect federation'. Progress in this area is slow, uneven and often frustrating. However, we have moved forward and will continue to do so.

There is no doubt that the perspective of this elder who has invested long enough is a period of several decades or hundreds of years. Indeed, stretching the timeline, every collapse of US stocks and even the financial crisis is just a pullback on the K-line, a hill that will inevitably be crossed after a rally.

Buffett has said before:No one makes money by shorting their own country。

This is an investor's belief in the development of his country, non-committal.

The market always follows the country, and the essence of investment is to bet on national luck. Buffett's success is largely due to the ten-year growth of American stocks. Similarly, A shares would be unattractive if they did not believe in China's development potential.

As for whether there is a bubble in the current US stock market, it never seems to be a problem in the eyes of the Don.

3. Monkey darts are also more reliable than short-term trading.

As we all know, Buffett is a believer in the concept of value investment. There are many commendable stories, such as Coca-Cola Company, Apple Inc and BYD, the shortest of which is as long as 12 years.

Every time a letter is sent to shareholders, the stock god will give his own understanding of his own value investment.

In this letter, Buffett saidHolding stocks is to a large extent a "positive sum" game.。

In fact, a patient and cool-headed monkey, by throwing 50 darts at the listed companies of the S & P 500, over time, as long as it is not tempted to change its original 'choice', it will enjoy dividends and capital gains. "

Productive assets, such as farms, real estate and, of course, corporate ownership, can generate wealth-a lot of wealth. Most people who own these assets will be rewarded. All that is needed is the passage of time, peace of mind, adequate diversity, and minimization of transactions and costs.

It's a pityMost monkeys are impatient, active and dissatisfied.。

02 How to copy the homework of the stock god?

The core of investment is to find logic and future trends.

Buffett's letter to shareholders often reveals Buffett's expectations for the future and Berkshire's investment direction between the lines.

60 years to build up a legendary image, will not be aimless.

Or pick up the important ones and say.

1. Be optimistic about new energy sources

Buffett believes that renewable energy has a bright future, and Berkshire Hathaway Energy (BHE), a subsidiary of Berkshire, will be the leader.

New energy is the trend of the times, after 2020, everyone can understand, the stock god said there is not much additional information, after the launch of their own BHE, more or less suspected of advertising for themselves, but the stock god of new energy definitely makes people feel more at ease.

Photovoltaic, wind power and new energy vehicles will be long-term investment hotspots.

2. Bonds are not good investment targets.

It has always been Buffett's public idea to depose a hundred families and only respect the stock. He has always believed in equity investment, firmly believing that the return on equity investment is much higher than that of bonds, commodities or gold. Judging from his investment history, this is indeed the case.

The recent rise in bond yields has attracted many refugees from the stock market to the bond market, but the stock god's words poured a lot of cold water on it.

Is the yield on the recent 10-year Treasury note (year-end yield 0.93%) down 94% from 15.8% in September 1981? In some major powers, such as Germany and Japan, investors receive negative returns on trillions of dollars of sovereign debt.

Buffett even assertedBond investors around the world-whether pension funds, insurance management or pensions-face a bleak future。

3. Buy high-quality enterprises

A real investorNever ask the market, just look at the intrinsic value of the target.。

Buffett believes that owning a non-controlling stake in a good company is actually more cost-effective economically and spiritually more relaxing than managing a struggling 100% holding company himself.

This is exactly what we often say about buying only excellent companies that are expensive, not mediocre companies that are cheap, not to mention that the valuations of mediocre companies with cheap prices are not lower than those of good companies.

To put it more simply, it is the "leading method of warfare". Such a strategy does not require much effort, it can even be said to be effortless, but it can show the cleverness of the strategy. When you play a game, you can score points based on the "degree of difficulty" of your movements, but in the business world, there is no such thing.

As President Reagan once said, "although no one has really died of hard work, why take such a unnecessary risk?" "

03 There are stock gods every year, and Buffett will always be Buffett.

There is a saying on Wall Street:Investment is as old as a mountain.。

Big waves clean up the sand, the new "stock god" appears year after year, and is forgotten year after year, while Buffett always stands on the top of the mountain.

Berkshire's market capitalization grew by only 2.4% in 2020, compared with 18.4% for the s & p 500, and Berkshire lost by 16 percentage points. In addition, the company's share price has underperformed the U. S. stock market in the past year, five years and ten years.

But in the long run,From 1965 to 2020, Berkshire's market capitalization per share grew at a compound annual rate of 20%, significantly exceeding the 10.2% of the S & P 500 index.Berkshire's market capitalization grew by an astonishing 2810526%, or more than 28105 times, from 1964 to 2020, while the s & p 500 index grew by 23454%, or more than 234 times.

In a year or two or even five or six years, there are countless people whose returns exceed Buffett, but their long-term and stable investment results are second to none.

In the 2020 domestic fund income list, none of the top 30 returns is less than 110%. It seems that all of them are stock gods, killing Buffett in seconds.

However, Da A's compound interest return over the past 30 years is 10 per cent, while none of the 2502 fund managers have compounded 10 per cent in 30 years and only 46 in 10 years, according to Tiantian Fund Network.

In five years, everyone is Buffett; in more than 10 years, Buffett has only one.

Over the years, the investment logic of the stock god has been studied over and over again, in fact, there is only one core point:Find wet snow and long slopes and wait patiently。

Buffett believes that the difficulty of investing is to find the right company beforehand. With the idea of "closing positions for ten years", evaluate the company's long-term competitive advantage, management capabilities and expertise, as well as price, and then look for opportunities to buy. The rest is less important, because good companies create value on their own, and investors can only add icing on the cake to help managers develop ideas so that they can be at the forefront of the industry.

Of course, mistakes are inevitable. Berkshire's $11 billion writedown last year was the price Buffett paid for his 2016 acquisition.

From the main road to Jane, the game of the stock god has never been anything new. But over the years, there have been many learners and very few people have learned it. In fact, in the final analysis, there are only two words:to know is easy , but to do is difficult。

Look at BYD. Even copying homework, not many people are patient. Six times in 12 years, Buffett earned 25 times, but most people left the game.

Ask ourselves, now we all know that new energy (photovoltaic, new energy vehicles) is the future trend, and the long ramp is right in front of us, but how many people will be able to wait patiently for 10 years?

04 Conclusion

When a person is hailed as a god, over-interpretation is inevitable, there are always people who like to dig out the hidden things behind the strong, stubbornly thinking that Buffett's success can not be replicated because they do not understand him, so they study it over and over again.

The letter to shareholders once a year has the wisdom of the elders, but there is no secret of the god of shares.

During the 56-year shareholder meeting, the legendary man almost always repeated the same thing, and he always did what he said.

As an ordinary investor, it is true that most people do not have the conditions of a boss, such as low-cost leverage, resources in the interpersonal circle, and even A-shares have no soil for valuable investment, but in fact, even on Wall Street, of the nearly $12 trillion entrusted to mutual funds over the past 40 years, the proportion of being able to comply with the simple and rational investment principles adhered to by Buffett and Munger is equally negligible.

Buffett's way is easy to learn, but difficult to copy.

Finally, at the end of a paragraph:

Bezos meets Buffett.

Bei said, "you are the richest in the world. Your way is so simple that no one follows the monarch's way and shares the same wealth and evil with you."？」

Bazi said to him, "I have never seen anyone who is willing to walk in full swing, accumulate steps and get rich slowly." "