Haitian Flavoring Company reaches new historical high! If you bought 50,000 yuan of Haitian Flavoring Company at 5178 points 5 years ago and held it until 2026, how much would you earn?

(Source: A-shares Collection)

How to operate in a bull market? Remember these three key elements

1. Timing.

People often ask, when will the bull market come?

I don’t know either, but as long as the bull market arrives, you can seize it. Before that, the most important thing is to stay alive.

In investing, there’s very little you can do—mainly improving your trading system (people) and choosing high-quality investment assets (location). The rest is just waiting for the right time, a major upward trend.

Ancient saying: “Timing is not as good as terrain, terrain is not as good as harmony among people.” Without a solid trading system, even if the bull market comes, most people won’t be able to catch it. Even if they do, it’s not guaranteed they can turn unrealized gains into actual profits.

Stop blaming bad mentality and psychological counseling everywhere. Behind all mental issues, there’s a lack of ability.

2. Plan carefully before acting.

Many people missed this wave of the ChiNext bull market, but what’s gone is gone; the future is the only thing you can change.

There’s a saying: “利益令智昏” (profit makes people lose their wits), meaning the temptation of profit can cause people to lose reason and become confused. In my view, what’s more likely to make people lose their wits is jealousy when they see others making profits but they don’t.

Don’t get flustered when others make big money. Plan carefully before acting; the stock market is never short of opportunities.

Most popular heroes today are labeled with “desperate battle,” “all-in,” and stories of small bets turning into big wins, reversing fate, or soaring to success overnight. For those who fail, I just smile; for those who succeed, I regard them as gods.

Every bull market has some latecomers who, after missing early gains, try to make up for it by full positions with leverage. Most of these people don’t end well.

3. Add to your positions.

After buying a stock, when its price starts rising, should you add to your position or reduce it?

If you really don’t know what to do, think about what the masses do—go against the crowd.

What do the masses do? When they see a little profit, they want to cash out quickly, unable to tolerate the floating gains.

The correct approach is to hold your position; rising prices are not a reason to sell, it might mean you picked the right stock. A higher-level strategy is to add more as the stock rises. The result: the best-performing stocks have the heaviest positions; the wrong ones have the lightest.

Why is adding on the way up a higher-level approach? Because it’s farther from the crowd’s mindset.

This method of adding based on price increases is still somewhat rough. Here are some tips: the best entry point is during a correction in an uptrend—when the stock price consolidates with oscillations, usually over weeks or months. When the correction ends and the stock breaks new highs, that’s the ideal point to add.

Why not add during a one-sided rally?

Any long-term great stock will experience oscillations and corrections during its rise. If you add randomly, only to face corrections afterward, what should you do? Frequent stop-losses incur high friction costs.

Only after the stock emerges from a correction and hits new highs again can we “assume” the upward trend will continue. That’s the best time to add.

This is my thought on adding during an uptrend. I hope it helps. If you’re a beginner, you can start by buying and holding. As long as you can hold on, you’re already ahead of most people. Once your skills improve, consider how to add to your positions.

Warren Buffett once said: “Invest with great companies.”

Since we lack the ability to run a company, the key is to find high-quality companies, gather talented people, and entrust our assets at the right price. Therefore, value investing first and foremost involves choosing quality companies. But how to identify these quality companies among hundreds?

Peter Lynch gave an answer: as long as you pay attention and do some research on stocks, ordinary investors can become stock experts, achieving results comparable to Wall Street professionals. By observing daily life—shopping, visiting exhibitions, eating out—or paying attention to emerging industries with growth potential, you can find stocks that make big money. This method—using common sense to pick stocks—is easy enough for even elementary students. But adults often dismiss it as “not technical enough” or “too simple,” thus rejecting simplicity and missing out on wealth.

1. Use common sense to pick stocks

Most high-quality companies are familiar in daily life. For example, Moutai at banquets; Ping An Insurance, which everyone pays premiums to monthly; China Merchants Bank credit cards; Vanke in real estate; Suning Electronics in retail.

Using common sense to pick stocks is that simple—no need for complex economic theories.

History shows that human nature tends to oversimplify things. The greatest truths are simple; the world is inherently simple, but as adults, we tend to complicate it.

2. Think clearly about three questions regarding a company:

(1) Will this company still exist in 10 or 20 years?

(2) Can its profits continue to grow in the coming years?

(3) Does the company have good mechanisms and management systems?

3. Long-term vision and patience after buying quality stocks

Buying quality stocks doesn’t mean they will rise immediately. On the contrary, during market downturns, they might fall more sharply than others; during good times, they might rise more slowly.

Good companies often lack exciting stories or hype, appearing as plain as water. So, in the short term, their stock prices may not seem promising. But the difference between quality and junk companies is that quality stocks, after falling, tend to recover over years; poor companies’ stocks might never rebound.

Therefore, investing requires a broad vision and patience. The farther you look, the more you can earn; the more patience you have, the more you can profit. Don’t focus daily on short-term price fluctuations.

What if you had held 100,000 yuan worth of Haidilao stock for five years? What dividends and gains would you have?

First year: On January 9, 2015, opening price was 41.57 yuan. Buying 10,000 yuan worth, you hold 2400 shares, with 232 yuan remaining.

On April 15, 2015, 10 shares split into 8, and dividends paid 8.5 yuan per 10 shares. Your dividend: 240 * 8.5 * 0.9 = 1836 yuan. The stock opened at 38 yuan that day, not enough to buy a full lot. After the split, your holdings: 240 * 8 + 2400 = 4320 shares, with 2068 yuan remaining.

Second year: On April 15, 2016, dividends of 6 yuan per 10 shares; total dividend: 432 * 6 = 2592 yuan. Opening price: 30.38 yuan. You buy another lot, now holding 4420 shares, with 1622 yuan left.

Third year: On April 25, 2017, dividends of 6.8 yuan per 10 shares; total: 442 * 6.8 = 3005.6 yuan. Opening price: 35.23 yuan. Buy 100 more shares, now holding 4520 shares, with 1104.6 yuan remaining.

Fourth year: On April 26, 2018, dividends of 8.5 yuan per 10 shares; total: 452 * 8.5 = 3842 yuan. Opening price: 62.8 yuan, not enough for a full lot. Remaining: 4946.6 yuan.

Fifth year: On May 7, 2019, dividends of 9.8 yuan per 10 shares; total: 452 * 9.8 = 4429.6 yuan. Opening price: 95 yuan, not enough for a full lot. Remaining: 9376.2 yuan.

By January 9, 2020, Haidilao stock closed at 107.79 yuan. The total value: 4520 * 107.79 + 9376.2 = 496,587 yuan.

Total dividends over five years: 1936 + 2592 + 3005.6 + 3842 + 4429.6 = 15,805.2 yuan. Total dividend yield: 15,805.2 / 100,000 = 15.805%.

Total five-year return: 496,587 / 100,000 = 496.59%. Profit: 396,587 yuan.

Currently, what stocks to buy in A-shares?

1. Stock market overview

2. Basic K-line analysis

3. Moving averages

4. Trendlines

5. Indicator analysis

6. Statistical analysis

7. Stock selection methods

8. Sector rotation

9. Various scams in the stock market

10. Original pattern strategies

“Buy on a downtrend, sell on an uptrend”

Buy on a downtrend:

First, focus on the strong stocks in this round of market, market hot stocks. Buy during a downtrend, preferably near support lines—mainly around the 10-day moving average (or 5, 20, 30, 60). The key is how to select support lines; methods include: box method, trendline, moving average, neckline, Fibonacci retracement, percentage method, Gann lines, etc. Focus on the moving average method.

Conditions for buying on a downtrend:

• The stock shows a bearish candle but will rise afterward; in extreme cases, you can earn 20% on the day and buy.

• When a downtrend is about to end and trend reversal is imminent, the risk is exhausted; buy when three or more large bearish candles appear, and the fourth bearish candle shows exhaustion.

• When a small correction occurs with one or two small bearish candles or a large bearish candle retracing to the 10-day moving average, it’s a shakeout, a good buy point (smaller trend within the larger trend, low risk).

Six principles for buying on a downtrend:

1. Wait for the 10-day moving average to be crossed or touched before buying; don’t rush.

2. Intraday bearish candles also count; often confirmed by the lower shadow touching the 10-day MA.

3. Strong shakeouts usually don’t reach the 10-day MA; buy when it approaches with a few cents.

4. Watch volume: breakout with volume, consolidation with decreasing volume.

5. Higher success rate when breaking out near the bottom; avoid participating in high-level consolidations.

6. Same applies to weekly and monthly charts.

Box breakout strategy:

(1) When a stock consolidates in a box for a long time and suddenly breaks out with volume, watch for a pullback to the top of the box to buy on a bearish candle.

(2) Breakouts should have volume but not too large (turnover rate within 20%), and pullbacks should be with decreasing volume.

For example, Hesheng Co., Ltd., broke out on March 19 with a turnover rate over 12%, volume increased, and after breakout, the stock continued rising with three consecutive limit-ups.

(3) Combine with fund flow and other indicators to improve success rate.

(4) Stop-loss: if the stock falls below support again, wait for a rebound and sell decisively! Even if wrong, sell!

(5) If some stocks break out but don’t pull back, better to give up—don’t chase highs!

(6) Operation mantra: Breakout—pullback—buy! Even if wrong, buy! Fall back—rebound—sell! Even if wrong, sell!

Of course, there are many ways to buy on a downtrend; I won’t detail them all here. The methods are fixed, but you need to adapt flexibly, considering your capital and market hot spots, to maximize the effect of stock selection.

Sell on an uptrend:

Stock trading is probabilistic; it’s impossible to be 100% accurate. If you realize you bought wrong, what to do? Don’t sell just because the price drops.

Sell on a rebound with a bullish candle: when you see the stock’s price rebound to a key moving average, consider exiting. This is a way to escape. But use pre-dividend data for analysis. Gann’s eight-line moving averages, after market analysis and research, are very effective.

Practical example of selling on a bullish candle:

Case 1: In Shenyang Machine Tool, the first thing to check is the daily K-line chart. If the stock stops making new highs and keeps lowering its center of gravity, and can’t break the “Dark Horse No. 5” line, it indicates a decline. So, the rule: sell on a bullish candle, even if wrong!

Case 2: SAIC Motor’s short-term opportunity formed a golden cross buy signal, and after a correction near the working line, a bullish candle appeared. Buying on a bearish candle is okay, but don’t buy blindly. When a bullish candle appears, it’s often the best selling point to lock in profits!

Buffett: Playing the stock market well requires constant calculation

Buffett loves bridge; he said: “It’s the best way to exercise the brain. Every 10 minutes, you have to reassess the situation. In stock decisions, it’s not about market trends but about rational judgment… Bridge is like weighing the probabilities of winning or losing. You’re constantly calculating.”

As a new investor, you must focus on fundamental knowledge and skills before entering the market.

1. Master basic securities knowledge and trading rules.

Many investors don’t even understand basic concepts like trading hours, stock codes, dividends, earnings per share, when companies release quarterly reports, or where to find official announcements. Entering the market blindly is like gambling.

To prevent your hard-earned money from being lost, before placing your first order, make sure you understand the stocks you want to buy and their trading rules.

2. Master essential skills.

Stock investment can be viewed in three levels: technical analysis, game theory, and value investing. Mastering skills in any of these increases your chances of success.

Before entering, investors should also be aware and prepared in these areas:

First, manage your time and energy well. Observe successful investors—they pay close attention to macroeconomic, policy, industry, and company news daily and persist over years. New investors should not only see their gains but also recognize their efforts and consider whether they have enough time and energy for this.

Second, have a systematic plan for your funds. Many new investors lack understanding of risks and may be overly optimistic or impulsive, risking all savings or even borrowing or selling property to invest. This is dangerous. Investment should be part of family financial planning. Use surplus funds so that market fluctuations and liquidity issues won’t impact your family life.

Third, understand your risk tolerance. Analyze your family situation, income stability, investment goals, and resources to determine your risk capacity. Don’t overestimate your risk tolerance initially. Start with moderate risks and gradually increase.

Fourth, control your emotions. The market often triggers herd mentality—chasing highs and selling lows. New investors must learn to control emotions, avoid being influenced by others, and stick to their goals. Each person’s investment purpose and style are different; blindly following others leads to mistakes.

Of course, after these preparations, you still might not be a winner. Always calculate risk-reward ratios. Find an investment style that suits you; independent thinking is essential for successful stock investing.