People who often watch the stock market in the A-share market will notice a phenomenon: stocks with poor performance in the same industry sector seem to be more frequently seen in the list of gainers, while stocks with better performance in the same industry are the opposite, rarely seen in the list of gainers.

It is reasonable to assume that stocks that frequently enter the list of gainers and become short-term hot spots should ultimately have a significant long-term increase. However, looking back at their historical performance, one can see that their overall increase over ten or twenty years is very small, and some even show no increase at all. For example, BAIC BluePark, Jiangling Motors, Dongfeng Motor, and so on.

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By carefully observing their long-term market trends, one will find a common characteristic - the market has been fluctuating back and forth for ten or twenty years, with huge market fluctuations like an electrocardiogram, making their trends like an electrocardiogram, with rapid rises and severe declines.

From a fundamental perspective, the performance of these companies has been relatively mediocre or even at a loss for a long time. This shows that poor performance and unremarkable fundamentals are the reasons why these stocks often become the target of hot speculation, but their long-term stock prices rise slowly or not at all.

In contrast, BYD, a stock with a good fundamental in the automotive industry, is rarely seen in the list of gainers, but it has a significant long-term increase over ten or twenty years. What is the reason for this?

Looking at the market trend chart, it is because although they do not rise often, once they rise, it is difficult for them to fall back completely. A relatively small market pullback is a common characteristic of these excellent companies in the industry.

Why do the stocks of these excellent companies have a small pullback? Because their fundamentals can support their stock prices to maintain a relatively high level for a long time. This is the so-called "focus on quality when falling." The stocks of these companies with excellent fundamentals are more resistant to falls, and the overall decline is relatively small.

Since the stocks of these companies with excellent fundamentals are generally large in circulation, their rise requires a lot of capital to drive. Therefore, the rise of blue-chip stocks requires a strong market consensus. And obtaining market consensus is not an easy thing, only in a super bull market or when the company's performance exceeds market expectations, blue-chip stocks will rise significantly.

Fortunately, due to their excellent fundamentals, although they rise less frequently, once they rise significantly, the fall is slower, and the pullback is smaller. Therefore, the long-term stock price trend is one step forward and two steps back or one step forward and three steps back, so after a few decades, it is still a significant long-term increase.

However, stocks in the same industry with poor performance, due to their inability to support their stock prices with performance, often fall back to their original position after each round of significant increases. The market trend shows one step forward and two steps back, or even one step forward and three steps back. Fortunately, because their market value has not increased significantly over the years, and their capital is relatively small, they are easily pushed up by a small amount of capital, and therefore often become the focus of market speculation.In other words, there are two patterns of stock price increases in the A-share market: one is that it is not easy to see a significant rise, but once it does, the pullback is relatively small, and it can hold at a relatively high position, which is the pattern of blue-chip stocks with good performance. The other is that it often sees significant increases, but if you fail to sell in time after the surge, the gains will basically fall back to the original level. This is the pattern of stocks with poor performance and concept stocks.

Understanding these two patterns of stock price increases has significant investment implications. When buying, when we are interested in an excellent company in an industry, we generally should not expect its stock price to fall back to five or ten years ago, because its long-term decline is relatively small. When we are interested in a company with poor performance, we should not rush to buy, because we may have the opportunity to buy at a low price five or ten years ago.

When selling, when we are selling the stock of an excellent company, we can sell in batches slowly, because it is relatively resistant to falls and falls slowly. If we are selling the stock of a company that is hyped by concepts, we must clear out quickly, because their decline is very rapid and the decline is huge.

In short, from a long-term perspective, the stocks of companies with good performance should be bought quickly and sold slowly, while the stocks of concept-hyped companies should be bought slowly and sold quickly.

Note, I am not here to let friends participate in concept speculation. What I want to say is that there are many stocks of emerging industries in the current A-share market. When they have not yet achieved substantial performance, we should be patient in investing in them, waiting for their buying points, and buying at a very low position. Then, when their performance has not yet been demonstrated and the stock price has surged, we should sell quickly. Many years later in the future, when they start to have substantial performance and become real blue-chip stocks, we should adopt a strategy of selling in batches slowly.