Since the market peak in 2021, it has been more than two years into a bear market.

Each cycle of bull and bear markets gives people a different feeling, and even changes the logic of stock trading.

The reason for the high earnings in the last bull market was because the logic was correct.

From the adjustment in 2015, the repair in 2016-2017, to the bottom in 2018, the core of the market was in the blue-chip stocks of the Shanghai and Shenzhen 300 and the Shanghai 50.

Therefore, the bull market from 2019 to 2021 was also a bull market for these blue-chip stocks.

The adjustment in 2021, the repair in 2022-2023, and then the bottom in 2024, the core of the market is no longer in these blue-chip stocks.

From 2022 to 2023, the most popular were information technology innovation, TMT, AI, robots, Huawei, smart cars, etc., and the core of the market was in the big technology.

That is to say, the future bull market is also likely to be in these stocks with big technology themes.

The core logic is that in the bear market, which sectors are concerned by the funds, which sectors will become the future main line.

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The core logic here actually has two points.Firstly, large capital has a much stronger judgment of trends compared to ordinary retail investors.

Sectors that are positioned against the trend will definitely experience a comprehensive outbreak or high growth at some stage in the future.

Therefore, capital will take the risk of losing money and enter the market in advance during a bear market to lay out their positions.

And those sectors that plummet during a bear market, even in a bull market cycle, will also rise, but it is just a rebound.

Because capital will not liberate the chips that were trapped at high positions in the last bull market, and there is no need to do so at all.

It seems easy for retail investors to judge industry trends, but in fact, it is very difficult.

So-called research reports are optimistic about all industries and cannot serve as an effective reference.

Once the choice of a major industry is wrong, whether it is a rebound market or a bull market, retail investors will definitely miss out.

Secondly, once large capital enters, it is determined to make money by all means.

Capital is profit-driven, and the capital that enters during a bear market is definitely also laying out a layout, and it is a big layout.Because they know that once the bear market cycle ends and turns to a bull market, when the funds are abundant, it becomes impossible to buy cheap goods.

Buffett's way of positioning is actually a typical bear market mindset.

Many people call this value investing, but in fact, it is because the large scale of funds makes it impossible to position in a bull market.

So, these funds, in the long bear market, will take over the chips of others, because only at this point can they buy a large amount of cheap stocks.

But since the funds are making a layout, they want to make money, and capital does not do charity.

The first core logic determines two points.

First, do not touch the high-positioned sectors in the bear market, such as big white horses, such as new energy, these sectors are easy to trap people.

Second, try to participate more in the sectors where funds enter in the bear market, such as AI, such as technology, these sectors will not trap people.

This large core logic, no matter in which round of bull and bear market alternation, is actually applicable.

Behind this logic is actually the cycle theory of the large economic industry.It may seem to be a logic of capital, but in fact, when capital chooses industries, it also refers to the economic cycle and development trends for layout.

So, no matter where the bull market starts and which year it starts, the general direction has actually been set.

Those who can understand this logic will understand where the big opportunities in the future are, regardless of whether they are participating now or not, and whether they are laying out or not.

The main line is not determined temporarily, there are not so many impromptu, most of the time it is already determined at present, written in the cycle.

The logic of the bear market is to keep the good and eliminate the bad, this point must be clear.

In addition to the core logic, there is also a trend logic of investment and the way of layout.

To put it simply, it is the logic of stock selection and layout.

There is actually a lot to say about this aspect, and the article will be very long, so I will share a few points to pay attention to with everyone in a concise and concise manner.

1. Before the trend has reached the bottom, do not easily talk about the bottom.Do not predict the bottom, because there is nothing the market cannot do that you cannot think of.

This kind of thing has been proven many times in 2005, 2008, 2013, and 2018.

If the trend has not bottomed out, there is no bottom to speak of in the market.

Many investors like to talk about the bottom, which is actually the desire to pick up the bottom, and picking up the bottom is one of the main factors leading to losses.

From the perspective of trading logic, it is safe to only follow the uptrend and give up the downtrend, and not to make any positions.

2. Valuation, this thing, can be high or low, buying high and selling high is the correct approach.

Valuation, to put it bluntly, does not need to be believed, because it is floating.

It can be high or low, and does not completely determine the rise and fall, but only determines the risk.

Good investment opportunities often appear in the high valuation range, which is to buy at a high valuation and sell at a high valuation.

The reason for high valuation is that the market has a higher premium space for this stock, indicating that the stock is in the growth period and in the period of market pursuit.High valuations imply risk, but also opportunity.

There are some stocks that have fulfilled their performance, and their valuation levels have come down, along with their stock prices, because the era of high growth has passed.

So, if you want to refer to valuations, first understand the logic of valuations before talking.

3. Trading in batches can lead to less profit, but the risk will also be much lower.

Trading in batches is a very good method for the vast majority of investors.

Many people will criticize batch trading as being messy and making less money.

But in fact, for retail investors, making more or less is secondary, whether to make money is the key, not losing money is the first priority.

Whether it is controlling positions or controlling risks, using the method of batch trading is the most reasonable.

This is not a profound strategy, but a very effective way and method.

4. Prioritize the story, and then look at the performance expectations.Stock Market = Storytelling.

In the stock market, storytelling is by no means a derogatory term, because stocks always start with a story.

No one knew that Tencent would become so powerful today; it initially told the story of a penguin's social life, and even this story was imitated from others.

The stock market speculates on expectations and imagination, while performance only confirms these expectations and imagination.

Therefore, in the stock investment market, the highest priority is actually storytelling.

Even the big white horses are essentially just a story, and they are not profound or complicated.

It's not that performance is unimportant, but if the performance is good but there's no story to tell, there won't be any big market movements.

5. Don't engage in lurking, just look for hotspots and main lines.

The most feared thing in stock trading is lurking, because it's easy to end up as an undercover agent, becoming a sacrifice.

If there's a market, then trade; if there isn't, then don't trade.Do it as the leader, focus on the main line, chase hot spots, rather than looking for opportunities that are not at the forefront of the trend.

In this market, one of the criteria for stock selection is to find hot spots.

They are good at seizing opportunities because they can find where the money is.

The rise in stock prices is due to the fact that there are more funds that want to buy and fewer chips to sell, so the more money there is, the safer it is.

Investment logic is one thing, but investment principles are actually more important than investment logic.

Prioritize setting your investment principles, and then repeatedly review your logic, which should be able to withstand scrutiny and the test of the market.

The cycle is long, do not be discouraged by temporary losses, but reflect more on what you did right and what you did wrong.