Coca-Cola(US:KO) Xin Lang Cai Jing·2025-09-27 09:33Core Insights - The article emphasizes the importance of understanding companies and their fundamentals rather than being swayed by market volatility, highlighting that true value investing is about thriving amidst fluctuations [2][3][4][5] Group 1: Understanding Companies - Value investors view stock price fluctuations as temporary waves, focusing instead on the intrinsic value of companies, akin to a ship's keel [2] - Historical data from the S&P 500 shows that despite 12 bear markets since 1957, the annualized return rate remains at 10.26%, indicating that quality companies endure through cycles [3] - Familiarity with a company's products, research, and cash flow helps investors remain calm during short-term price changes [3] Group 2: Avoiding Leverage - Leverage can amplify both gains and losses, with historical examples like Bear Stearns during the 2008 financial crisis illustrating the dangers of excessive leverage [3][4] - The nature of volatility changes with leverage; a 50% drop can wipe out an investor's capital if leverage is involved, whereas it may only represent a paper loss without leverage [4] - Behavioral finance suggests that leverage can lead to irrational decisions, such as panic selling during downturns, which is contrary to Warren Buffett's investment principles [4] Group 3: Staying Away from Market Noise - The principle of "holding stocks without being emotionally attached" is crucial for managing volatility, as excessive trading can erode returns [5] - Data indicates that investors with a monthly turnover rate exceeding 200% have a median three-year return of -18.7%, significantly lower than the 34.2% return of low-frequency traders [5] - Successful investors focus on analyzing quarterly reports and conducting field research rather than obsessively monitoring market movements, allowing them to make informed decisions without succumbing to market noise [5]