How to choose high quality listed companies?

First, look for leading and monopolistic companies or companies with a large share in a market segment.

This may not be the same as the mentality of many retail investors, most of them like low-price stocks, so that the transaction cost is very low, enter the value depression, and hope that one day can soar.

But what I do not know is that the US stock market has two very big characteristics compared with A shares, one is that the proportion of US stock institutions is large, and companies that fail to get the favor of institutions are difficult to emerge even if the price is low. So, Tesla, Facebook, Amazon, and so on should be our top picks. Of course, the emerging China concept stocks are also a very good choice, because they are behind the rapid economic development of China. The dividends of rapid economic development have not retreated, and there will be more mainland companies landing on the US stock market in the future.

Second, the proportion of US stocks delisted is larger, and low-value stocks are more easily delisted than leading stocks.

According to statistics, between 1995 and 2005, a total of 9,273 companies delisted from the three major stock markets in the United States. Among them, the New York Stock Exchange has a total of 1,906 delisted in ten years, Nasdaq has 6,257 delisted in ten years, and the US exchange has 1,010 delisted in ten years. In the five years from 1997 to 2001, the three major stock markets combined delisted an average of about 1,000 companies a year. About half of this is voluntary delisting, mainly privatisation; The other half is forced delisting. Therefore, investment in US stocks must avoid the risk of US stocks delisting, and the consequences of blind bottom-diving can only be to let foreigners cut leek.

Second, look at the fundamentals of the company and the organizational structure of the company. Generally, the selected companies should have a clear main business, only one main business, at most two main businesses, unless it is an integrated capital platform that can operate across industries, and companies with more than three main businesses are never considered. Focus can go further, whether it is the old king Amazon, or the new baby Tesla, their company’s main business is very single.

Third, in-depth analysis of a company’s main business.

Some people own a company for a long time, the stock price has risen a lot, they think they are a value investment, and they know the financial data by heart, but if they don’t figure out the business relationship, the financial data is simply not comparable. Just like the same liquor stocks, Moutai and Wuliangye must be inherently different, and the US stock is the same.

The value of the company is the discount of future free cash flow, free cash flow is closely related to operating cash flow, and operating cash flow depends on the difference between “money” and “money”, and the upstream of a company’s industry is the direction of “money”, and the downstream is the source of “money”. The relationship between an enterprise and the downstream determines the profit model of the enterprise. If you don’t know how the company’s business makes money, you don’t know how you make money, and the result is that you end up losing money in a confused way. After peeling the cocoon, you are qualified to talk about value investing, to talk about how to work with the company.

Fourth, choose familiar industries.

With the increase of age, experience will become more and more rich, we will have our own cognition and views on things, and it will be easier to pay attention to the industry we care about, such as Internet e-commerce, game IP, national short video broadcast and so on. Especially in the industry you are in, the familiarity with the industry will make it easier for you to get in touch with the nature of the industry, and the role of intrinsic value will be infinitely amplified. Whether it is in time or energy, it has a very big advantage.