Crystal Fly Swatter: An Independent Investor's Investment Insights

1、

What a professional investor needs to do

Although I haven’t been involved with stocks for a very short time,

but truly treating this as the sole family income source and a career,

I have indeed gone through some struggles and weighing.

First is the inertia of thinking and physical habits,

My career has spanned over 10 years,

Taking a few months of phased rest feels great,

but then I would find it hard to immediately give up the 9-to-5 routine,

and for a while, I really felt some discomfort.

Additionally,

The volatility of the securities market is well known,

Putting family assets’ growth in this area always feels uneasy,

and the title of “stock trading”,

seems less appealing than it used to be.

This was my typical mindset two years before I took a break.

This gradual shift in feeling is a step-by-step process,

Adapting to the lifestyle is one aspect,

more importantly, through persistent learning and thinking,

I began to understand the essence of stocks,

what the securities market is,

what investment really means, and other questions I had never clearly understood (although I once made a major stock investment that yielded good returns,

I knew well that it was purely luck,

with no possibility of long-term replication).

Once I started learning,

I couldn’t stop,

the more I learned, the more problems I found,

the more problems I encountered, the more I tried to find answers,

the more I learned, the harder it was to synthesize and I even felt contradictions,

the more contradictions, the more I kept thinking and summarizing,

like being immersed in an online game, endlessly killing bosses to level up, unable to extricate myself,

until one day,

suddenly I felt “smooth”,

the mental block in my mind disappeared.

From that moment,

I gradually experienced the “beauty of investing” — investing is no longer about price fluctuations,

no longer about fighting against countless opponents,

no longer about risking everything or hesitating,

no longer about weaving anxiety with desire; investing is about the historical process,

it’s about social trends,

it’s about the essence of business,

it’s about philosophy and values,

it’s about thinking patterns,

it’s about cultivation,

it’s full of rhythm and beauty…

Naturally,

through learning and continuous practice,

I gradually explored an investment model that suits my personality,

strengths, and financial characteristics.

When this moment arrived,

I began to realize: my life is about to turn a completely new page.

I still remain cautious and walking on thin ice, and many questions remain unanswered or unverified,

but from that moment,

I no longer hesitated or wavered,

I knew what my new life goal and direction were,

and I found joy in it.

Actually, professional investing is not mysterious at all,

it’s no different from the essence of going to work every day: making money.

But frankly, the life of investing is quite satisfying,

for example, no longer rushing out of bed in the morning,

but sleeping until naturally waking up; no longer caught in the endless cycle of boss-client-employee chaos,

but enjoying reading, gaming, shopping, watching movies peacefully; no longer flying around, saying goodbye to family frequently,

but quietly staying together; no longer fighting for hotel rooms and tickets during Golden Week,

but theoretically having the ability to go anywhere at will; no longer enduring office politics and various cautious words,

but acting freely; no longer exhausting oneself to beat competitors just to climb higher,

but forgetting what life’s true meaning is… What is the ultimate meaning of pursuing financial freedom? It’s actually about the freedom of personality,

the freedom of body and mind.

Although real industry can indeed bring me unforgettable professional honor and achievement,

this sense of achievement is also present in investing, sometimes even more intense — if one can experience both simultaneously,

then it’s not a wasted journey.

So,

for me,

investment might be the best job I can find in this world — it entirely depends on your own brain to win or lose,

it’s always fair and impartial,

it’s simple and straightforward.

2、

Four years of insights

These four years of professional investing are just a short chapter in my life,

but a very meaningful one.

Perhaps it represents the end of one way of life and the beginning of another.

Clearly,

regarding stocks,

my entry into the market has not been long,

roughly about 6 years in total (including two years when I didn’t even know what PE was,

thankfully unscathed, blessed by heaven).

But frankly,

I believe time is both a problem and not a problem.

Not a problem because I see value investing as a collection of many key success points,

each success point separated by a thin barrier,

and opening these barriers requires not “time” but “thinking mode”.

And thinking mode is not a matter of time accumulation( For example, Buffett’s recently designated successor Todd Combs is only 39,

which makes one wonder how big the gap between people can be),

but it’s a kind of “insight” that combines many factors.

As for time being a problem,

it’s because investing is a practice-intensive activity that combines science and art,

“experience” plays an irreplaceable role in improving investment ability,

a person too young or with too little securities experience is unlikely to truly mature.

Therefore, my conclusion is: investors with the correct thinking mode can grow stronger over time,

but for those holding wrong thinking, “trading stocks” is meaningless.

The former’s one year might equal the latter’s five or even ten years,

the latter’s ten years may not equal the former’s 2-3 years.

Even within these few years of investing,

I have witnessed the rise and fall of a legendary figure in the stock market.

They once shined brightly,

but then fell sharply and even became infamous.

Like the saying in “The Ming Dynasty’s Stories”: “A person is very impressive on this page,

but on the next page, they are already timid,”

but the efficiency of the securities market is much higher than history,

haha.

I don’t know if these figures have value to others,

but to me, they are very meaningful,

and I can summarize into two points:

1、

It’s easy for a person to become a firework,

but very hard to become the sun.

When someone claims to be the sun,

we’d better think whether they are just a firework.

2、

Stock gods are not pretenders,

Sun Tzu is the real master.

I regret that,

this market still daily floods with opinions and news that are very unfavorable to investment,

and they are always the most popular.

Although I understand this is very human and follows the laws of the securities market,

it’s still a bit sad.

Fortunately, in my limited investment career,

the time spent on that is only a few months in total,

though I also fell into the same traps of human nature trying to find flowers and fruits,

but soon my personality and thinking mode prevented me from believing those things — later I learned,

Buffett also once strongly obsessed with technical analysis and short-term trading,

but before age 30, he completed all the unfavorable aspects of human nature,

and started on the path of value investing,

ultimately becoming the greatest investor in history.

From this perspective,

I am lucky.

The principle of value investing is forever valid, but its practice can never be widespread.

About 80% of the market participants will never understand the significance of value investing,

and among those who do, another 80% cannot understand or master enough “concrete methods” for various reasons.

Therefore,

this contradiction provides a long-term and huge opportunity for the few who are fortunate enough to enter the door of value investing.

From this angle,

I am also lucky.

Not everyone in any country or era has the chance to get major investment opportunities,

even if they are smarter than Buffett.

And China is at a critical and golden stage of national development,

this historical phase is a huge lottery ticket.

China’s rise is not just a possibility but a reality,

and the rise of China means the rise of millions of Chinese families and individuals — today,

you and I have this historic opportunity.

From this perspective,

I am still lucky.

So,

lucky me,

must seize the opportunities given by this era seriously.

What does “seriously” mean?

It means treating investment as a serious job,

without pressure from bosses but with self-education,

without client urgings but with a sense of urgency,

without expert evaluations but knowing your own strength.

Investment is so free,

how far you go or whether you want to go forward is entirely up to yourself.

I remember Stephen Chow in “The King of Comedy”,

when he was down and out,

still opening “A Actor’s Self-Cultivation”,

which contains a strong hope for success,

but I think more likely it’s from a deep love or even obsession for this career.

Therefore,

I titled my blog “A Retail Investor’s Self-Cultivation”,

which reflects this idea.

Why do some people keep growing in the stock market while most others stay in place forever? The biggest difference is not in IQ or professional knowledge stages (which are easy to catch up with),

but whether they treat investing as a matter? Especially as a real opportunity to change destiny seriously? If “yes”,

then they will undoubtedly develop a long-term “personal growth plan”,

I call it “planned incremental change”.

That is, based on long-term goals,

and always proactively,

with a plan to improve one’s “experience” in all aspects,

leading to “continuous upgrading” — just like in the workplace,

to move upward, you must improve your qualities,

whether it’s certification, reading, training, or further education,

all naturally and with initiative,

right? What about investing? We never think we can leap from intern directly to CEO,

right? So,

why believe that without hard study and long-term磨练, you can harvest abundant fruits like successful predecessors?

This “planned incremental change” will eventually lead to a widening gap in thinking modes,

vision,

judgment,

behavior patterns, etc.,

which I call “compound interest of learning” — this may cause a group starting together to eventually stagnate,

and those behind to no longer understand what the leaders are saying,

not an exaggeration.

This is the key secret why a small number of people ultimately gain huge benefits while the vast majority waste this historic opportunity.

Unfortunately,

only a few will ever understand this,

and among those, even fewer are willing to act — in fact,

this is the biggest barrier to joining the “club of successful investors”…

I said long ago,

people who learn and people who don’t learn,

appear no different daily; monthly differences are minimal; yearly differences are obvious but seem insignificant; but when viewed over five years,

it’s a huge divide in wealth! When looking at ten years,

it’s an insurmountable gap between one life and another… seize the moment,

start learning now,

take action on your dreams,

this is my most heartfelt advice to all good friends.

3、

Four years of investment insights

If I had to say what my biggest insight over these years is,

it’s probably: don’t overcomplicate simple things,

and don’t oversimplify complex things.

Many people like to add as many variables as possible to their investments,

macro,

micro,

technical,

fundamental,

gambles… all the best known are used,

thinking that this makes their approach “comprehensive”.

In reality, they fall into their own “variable maze” unknowingly.

Or they mystify and complicate simple things, even turn them into玄学,

to make themselves feel proud of being mysterious and profound.

Many also treat investing as a pure art form and seriously neglect that investing is first and foremost a rigorous science,

or overemphasize one aspect while neglecting others,

such as “great companies don’t sell even if they die,”

or just read a few brokerage reports to analyze a company,

or stubbornly insist “buy only when below net assets,”

or “find the fastest-growing companies in the past two years,” etc.

All these,

even if you spend another 10 or 20 years in the stock market,

are unlikely to yield good results.

The fundamental principle of successful investing is very simple: follow common sense,

use compound interest,

margin of safety,

moats,

stay rational,

circle of competence… in short, 50 words or less is enough.

But the specific composition of successful investing is very complex.

A qualified or mature investor should not be limited to abilities in one area,

but should have skills in risk and opportunity recognition,

business understanding,

financial data analysis,

emotional self-control,

multi-angle valuation,

macro foresight,

understanding of historical regularities,

highly logical thinking,

and even the ability to see truth from small details, etc.,

making it very difficult.

This is unlike technical analysis,

which at first seems like a天书,

but the more you learn, the clearer the key issues become, focusing on a few points,

and value investing at first glance is plain language,

but the more you delve into it, the more knowledge points are involved,

and the higher the ability requirements become.

I believe that if only driven by profit without genuine interest,

it’s really hard to persist.

Having said so much about “what to do,”

then “how to do it”? Or,

are there shortcuts in the growth of the investment path? Yes,

that is: stand on the shoulders of giants.

The saying “Read three hundred Tang poems thoroughly,

even if you can’t recite poetry, you will learn to recite,”

applies to investing too.

When a large number of classic works and profound thoughts of investment masters enter your mind,

it’s a process of continuous elevation of thinking realm.

Extensive reading is the best “九阴真经”,

it may not make you leap to the top instantly,

but at least it can save you more than ten years of detours.

For example,

even if there are huge differences in investment styles,

almost all investment masters advise: avoid frequent short-term trading,

don’t think you can predict the market,

don’t let your rationality lose control… use compound interest,

respect common sense,

stay away from risks… we can think more about,

why? Do you still want to challenge these?

How does the “feeling” for the market and business come about? Why is it that the same enterprise,

placed in one person’s hands, is like a master chef slicing through beef, precise and to the core,

but in another’s, it’s like a lion biting a turtle, unable to get a grip? Although personal talent differences are involved,

I believe the more important factor is whether one has fully “opened the book” and then persistently “practiced”.

First stand on the shoulders of giants, then become skillful through practice,

sometimes the difference is just like that — because the answer is so simple and plain,

it can’t satisfy many people’s dream of “getting rich overnight,”

and thus always remains on the edge,

and always able to gain market returns — some things in the world are just so ironic.

After extensive reading,

it’s important to learn dialectical thinking and to master “subtraction” — conversely,

most people I see are trying to build an increasingly complex investment system, thinking that’s “professional,”

but I personally can’t agree.

Based on extensive reading and thinking,

how to make your own investment model more simple,

the so-called “practice makes perfect,”

the simpler and more time-tested, the more repeatable.

For the coming years,

my most important task and focus is:迎接大牛市的到来并确保全身而退。

Since the peak of 6124 in 2007, three years have passed,

and based on the time cycle, 2011 and 2012 are the most likely periods to start the next bull market (the bull market of the SME board and emerging industries has been established since 2009).

For this inevitable moment (no need to fuss over which year, month, or day, or what twists happen in between),

since the comprehensive layout of 2009 and 2010 is nearly complete,

the subsequent bull market strategy is very simple,

just a “hold” approach,

and even with a neutral scenario, the expected returns are quite satisfactory.

But history and market laws tell us,

the long-term average return of the market is only about 6-8%.

After a period of super-high returns, a strong mean reversion is inevitable.

Whether it’s corporate performance or securities market returns,

mean reversion is an unescapable law!

Therefore,

for all long-term investors who have made good layouts,

how to ensure success and retreat after harvesting the rewards of the bull market,

and avoid the main downward wave of the next inevitable bear market,

will be the decisive factor in final wealth division.

I said a year ago,

during the two years when the last bear market was bottoming and brewing a rebound,

don’t think about making big money,

the core of investment is “layout for the future”.

And when the bull finally arrives,

and collective madness is sure to happen again,

the core of investment will shift to “timely retreat and preserve gains”.

Although the specific details,

timing, and technical aspects need to be considered at that time,

two points are clear:

First,

be extremely cautious of the frenzy during the bull market and the high valuation pressure in the market,

retreat is the first strategic move when the mind is tense.

Second,

all successful investments are not based on “guessing the top,”

everyone who has been fully positioned at the foot of the mountain in the past two years has the most qualification not to “guess the top” — this is the significance of my previous blog post “Whether the future sell-off is successful depends on now.”

In addition,

as my asset scale continues to grow,

I expect my investment model will also undergo some changes in the next five years.

The overall principle is: the larger the assets,

the more diversified the major asset allocations will be,

the investment style will tend more towards “waiting for safety margins most of the time,

more diversified holdings,

using various measures to hedge and smooth volatility,”

and there are some topics left for detailed research.

In summary,

as assets grow,

the importance of seizing bull market opportunities is relatively less than avoiding bear markets and other major risks.

The key to initial wealth growth is to find a sufficiently long and smooth “snowy road” (long-term effective and replicable correct methods) and persistently push the small snowball to quickly reach a scale (small principal continuously rolling and growing rapidly),

and at the intermediate stage, the snowball has entered a stable “snowy road” (more mature and fixed investment model) with strong self-rolling inertia (the power of compound interest manifests,

large principal doubling every 3-5 years could yield absolute returns surpassing what small principals could achieve in 10 years of tenfold growth),

at this point, the most important thing is not to make the snowball roll faster,

but to avoid being shattered by sudden mountain peaks along the way (avoiding unexpected risks is the top priority,

missing out is not a problem,

mistakes are).

Finally,

I believe someone will ask me how to make a living from professional investing.

I think the answer is very simple:

First,

you must sincerely,

from the bottom of your heart, be interested in investing,

not just for making money,

especially not to “make more money in less time.”

Second,

you must spend a lot of time and effort to learn and think,

you must clearly understand: who are you? Why are you truly suitable for investing? What is the most suitable investment method for you? Honestly,

I don’t think everyone is suitable for investing,

even if they run a good industry or have high IQ and EQ.

Sometimes I even feel,

investing,

may be a reward from heaven for certain people with specific personalities,

values,

thinking patterns.

Third,

a certain asset base is necessary.

It can relieve you from excessive daily material pressure and strengthen your risk resistance.

Generally speaking,

I tend to think that if your “completely investable funds” can generate a 10% return (a moderate annual return under low risk),

and this can at least cover your family’s normal expenses for more than two years (all expenses included,

housing, cars, children’s education,

fixed travel, etc.,

but excluding unexpected and major illness expenses),

then this probably meets a basic condition,

and the longer the better.

But does falling below this base mean it’s impossible? I don’t think so,

but it may require facing greater pressure (especially during market downturns) and more effort.

As for specific skills,

such as how to achieve phased cash flow within a stable long-term investment cycle,

these are more trivial,

and quite simple.

If friends are interested, I will do some summaries for reference in the future.

Originally,

this was just a path of self-cultivation for a retail investor,

but as more friends participate,

it may also be gradually recording and gathering many small parts of people’s investment journeys.

I hope that many years later,

friends who once met here,

can find something valuable on this shared path of investment growth,

and ultimately harvest their own piece of天地…