Apr 08, 2021

To establish a stock pool, we need to choose valuable leading companies.

Leading companies often have the following four aspects in common.

1.The leading company, as soon as you say, is well known by others and has a high reputation.

2.The leading companies are often well-known industry companies with high brand awareness, strong industry competitiveness and strong profitability.

3.Leading companies rise earlier than the same industry companies, and the increaserangeis often bigger, but the adjustment range is smaller than other companies.

4.Leading companies tend to start ahead of the turning point of the industry cycle, and then resonate with the turning point of the industry cycle to produce a higher level of rising market.

We need to find the goal of our own investment, and following the leading companiesshould be our eternal criterion. According to ourown endowments to find familiar industry, establish ourown stock pool, track the market and industry trends, and pay attention to the relatednews. To establish a stock pool, you need to choose valuable leading companies, and find out their industry, prepare for the future outbreak of the industry or ambush ahead of time.

There is the rule of 20/80 principlein any industry: the best 20% of the enterprises make 80% of the profits of the industry. And this kind of influence to concentrate onthe head will be more and more obvious.

Investment should buy the leader, and commercial speculation should participate in the best quality assets.

Leading companies with good performance and long-term follow-up of the industry cycle and its impact are perfect investment strategies. We need to establish a pool of high-quality leading stocks, make clearlywhich industry they belong to, prepare for the lowest point of the industry, or even ambush in advance, and wait for the dilemma reversal andDavisDouble Play effect brought by the industry cycle reversal. The upward trend of industry cycle will be the constantly strongof Matthew Effect, highlighting the value of leading companies.

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