At the top of the A stock market in the past several big bull markets, such as the main board in 2000, the main board in 2007 and the small and medium-sized board bull market in 2010, the overall PE valuation of the related stocks is 70 times, 65 times and 60 times, which is much more expensive than it is now.

However, many investors can still find out the reason why they continue to hold the gem which has already reached 60 times PE: if the valuation ceiling of the market is 70 times? If it is 90 times? After all, the top of the main board bubble in 2000 and 2007 is about 10% higher than the current gem valuation. In the US's 50 bubble in the 70s of last century and the technology bubble in 2000, the PE valuation of related assets can be up to 90 times. If we follow this yardstick, is there any room for making money for gem assets? Why do we abandon it now?

Similarly, the idea of "abandons pity" is not only perplexing today's GEM investors but also plaguing many other investors.

In 2008, the yield of the 10 year treasury bonds in China approached 2%, but the central bank still cut interest rates. Is it to go or stay? In 2013, the A share index fell to 6 times PE, but the economy was still sluggish, or did it enter or not? Recently, the premium of stock index futures has reached 100 basis points, and the overall premium of the classified funds has often reached 10% or more. But the market is still crazy enough, and spreads are still widening.

Of course, for most researchers, this kind of investors' troubles do not exist. They can always advocate their own views without worrying about the dilemma of "if the position is used up, the market is not over, so it will be useless to see it again". But for investors, such trouble is inevitable.

When encountering these investment opportunities that are "tasteless and abandoned", and feel puzzled, investors need to realize that the problems themselves show that they are not facing a perfect investment opportunity. The risks and benefits of this investment opportunity are already equivalent. risk Already greater than revenue.

However, many Investor But often at this point can not extricate themselves, hoping to earn the last few cents in the market. They either earn a lot of profits on such assets, thus leading to blind confidence in their own judgement ability, or being controlled by the herd mentality, unwilling to leave the popular assets, or lacking the cognition of the market, or by the agent mechanism, so as to overdo the residual, meager and dangerous profits.

In fact, as a result of capital market The volatility is so great that no sophisticated investor can earn the last few cents in the market. For the last part of the market, efforts will either expose investors to excessive risks or make investors ignore the sound gains. In any case, this will endanger investors' long-term performance.

Therefore, in the face of the temptation of "an asset that is already very expensive, but perhaps still a little higher", experienced investors must abandon their last remaining profits and invest their assets in a safer, more secure and more secure place. Because they understand that the last few cents in the market are definitely not that good.

Let's end the discussion on the last few cents with a story. In a public meeting, Warren Buffett's partner Charlie Munger once asked Buffett, "I see you often talk about the concept of free cash flow discounting, but why have I never seen you calculate this figure in investing?" I know that Wall Street investment bank often writes thousands of lines of Excel formula to calculate the company's discounted value. Buffett replied: Charlie, if the return of an investment needs to be precisely calculated, then the investment opportunity will be too mediocre.