What is the snowball investing method?

1. The snowball investment method refers to an investment method in which once an initial advantage is obtained, the snowball will get bigger and bigger, and the advantages will become more and more obvious. It is a metaphor that this investment method adds up to a small amount and its advantages gradually become stronger. This is the classic stock trading method of American stock god Buffett. The snowball investment method comes from Buffett's famous saying: "Life is like a snowball. The important thing is to find very wet snow and a long slope."

Referring to It is to invest funds that can continue to grow in a suitable environment. Changpo refers to a company that allows enough time for capital to grow and become stronger.

2. The so-called snowball effect: Once an initial advantage is obtained, the snowball will get bigger and bigger, and the advantage will become more and more obvious. Metaphor: A little adds up to a big advantage, and the advantage gradually becomes stronger. There are also books with the same name.

Extended information:

The reason:

In the early stages of rolling, a small snowball needs to be pushed by external force. When the snowball is large enough, When it can rely on its own inertia to push forward, the external power will be relatively weak. As the snowball continues to roll, the snowball presses on the snow on the ground. The pressure causes the snow on the ground and the snowball to lower the melting point of the snow and slightly liquefy some liquid water.

This liquefied water is likely to stick to the surface of the snowball that is in contact with the ground. In this way, when this surface rolls with the snowball and is not in contact with the ground, the liquid water attached to it will not be affected by the previous impact. Under great pressure, the melting point rises and turns into snow again and sticks to the snowball, which increases the volume of the snowball.

This principle is actually like an interesting math problem: There is a lotus leaf in the lotus pond. It will double every day and will cover the entire lotus pond in 30 days. In the first 20 days, people are likely to ignore the changes in lotus leaf area. Until the 27th day, the lotus leaves only accounted for 1/8 of the lotus pond, and on the 28th day, they only accounted for 1/4.

Baidu Encyclopedia-Snowball Effect