"This is the most basic valuation method, of course, there are more complex calculation methods, such as the discounted cash flow valuation model DCF, DCF belongs to the absolute valuation method, is the free cash flow that an asset can generate in the future discounted cash flow valuation model, usually to predict 15-30 years according to a reasonable discount rate discount, to get the current value of the asset, if the discounted value is higher than the current price of the asset, it is profitable, you can buy, if it is lower than the current price, It means that the current price is overvalued and needs to be avoided or sold. Lin Shi continued.

"It's not that simple, is it? There must be some flaw. Zhou Yunmeng questioned.

"Of course, no valuation method is 100% perfect, but DCF is a theoretically impeccable valuation model, especially for those industries with high cash flow predictability, such as utilities, telecommunications, etc., but for industries with frequent and volatile cash flow fluctuations, such as the technology industry, the accuracy and credibility of DCF valuation will be reduced. In practice, due to the difficulty of accurately predicting cash flows in the next ten years, DCF is rarely used as the only valuation method to price stocks, and simpler relative valuation methods such as price-earnings ratio are used more frequently. DCF is generally seen as the most conservative valuation method, and its valuation results are used as the floor for the target price. For investors, regardless of the final valuation standard to price the stock, a DCF model will help to form a quantitative grasp of the long-term development of the invested company. ”

"At the end of the day, this valuation method can only estimate the value of some consumer stocks with stable cash flows, right?" Lu Yindong groaned.

"Of course, the speculative component of high-tech stocks is relatively large, unless there are high technical barriers and very low valuations, otherwise the profit margin is very small, and you will be trapped if you are not careful, so we only talk about value investment here, value investment largely relies on fundamental analysis, and traditional value investment is completely dependent on fundamental analysis, and the traditional value investment is generally like a girl getting married, which is carried out with the attitude of 'making a promise to each other', advocating that she will hold it forever after buying, so she married this 'man' The fundamentals are the only ones, and there is no room for speculation. ”

"Of course, we know that you are a solid fundamental analysis stream, but Huaxia Guo is largely relying on technical analysis, experts live on the APP, experts on TV, and stocks that pop up at random on online websites are all talking about K-line technical indicators, and fundamentals may not be very popular in the Huaxia stock market...... Zhuang Yingying looked at Lin Shi and said softly, for fear of hurting Lin Shi's self-esteem.

Lin Shi smiled, and then said: "Of course I know, there is no financial indicator calculation formula can compare with the last 45-degree angle rise K-line chart, but we all know that it is used to deceive shareholders, the past rise and the present have little to do with it, the company may go bankrupt next year, or there may be losses that lead to the stock price Davis double kill, of course, the sudden collapse of the company is a black swan event, is unpredictable, but we don't have to fool the shareholders, we just need to do our job." ”

"Okay." Seeing Lin Shi insisted, everyone did not reluctantly use technical analysis, they have been doing analysis for so many years, naturally they know that technical analysis has a relatively large limitation, in a bull market technical analysis has a 70% success rate, in a bear market...... There should be 10 percent, 90 percent of which are manipulated by market makers, but they still don't use technical analysis to analyze stocks, which can be said to cater to the preferences of retail investors, retail investors have a headache when they see financial indicators, only K-line charts and price limits can stimulate their desire for the stock market, but ...... They won't think so when they stand tall.

"Now the K-line of the market is slowly rising, some stock market experts and economists are saying that the slow bull is coming, but the China Securities stock market has been fluctuating up and down for so many years, except for the bull market, and there is basically no unilateral upward trend, but now looking at the monthly line of the China Securities market, it is a unilateral rise!" Du Wenjian said while looking at his phone.

"There is no slow cow in ten years!" Lin Shi's words were shocking, and everyone was stunned.

"If large-cap stocks keep rising and bancassurance also pulls up, maybe it's really a slow bull......"

"I said, stock speculation is a brainwashing process, it depends on whose brainwashing technology is good, who is brainwashed is a leek, who will be slaughtered, China Securities large-cap stocks have risen is a good thing, I said before, if it rises a lot, it is not a good thing, you say to think with speculative thinking, what is the purpose of the stock rise?"

"To cut leeks......, of course," said the crowd without thinking.

"Every bull market in the stock market is related to the people's deposit move, the stock market rises by 20 percent, it will attract the attention of the people, the stock market rises by 50 percent, residents will take out part of the money to speculate in stocks, the stock market rises by 100 percent, residents will use all the money they can use, including online loans, usury, over-the-counter allocation, and even embezzle the company's money, the result? In 2001, the Internet bubble burst, some stocks whose stock prices had doubled tenfold that month fell by 99.9% in just one hour, tens of millions of people's assets were destroyed, and the subprime mortgage crisis in country M in 2008 caused the collapse of Lehman Brothers, Bear Stearns Bank was acquired by JP Morgan, and the collapse of a bank meant that all depositors' money disappeared, and the global economic loss reached at least five trillion dollars that year! ”

"That's all history, it doesn't mean it will be repeated in the future......"

"History has something in common, for example, greed in the process of rising almost infinitely magnified the weakness of human nature, so that some people with high IQ are still passing on to each other*, whoever is unlucky, who will be blown to pieces, you can see that every sharp rise in history is caused by greed, history will of course repeat, but it will not be a simple repetition, it will always change tricks to trick greedy people." Lin Shi was thoughtful, he could write down almost every incident of the sharp rise and fall, and he also knew that the deep-seated reason behind each crash was nothing more than a game of greed, to see who recognized the reality first.

"Haha, but I can't see where the greed of Chinese investors is, on the contrary, I often see their fearful looks." Lu Yindong said with a smile.

"I think you're right." Lin Shi smiled, and then said: "But it is difficult to make money after a long period of up and down shocks, and retail investors are desperately short-term trading, and they will naturally walk on thin ice if they lose more times." ”