In recent years, the domestic market has generally been in a hellish mode, where neither individual investors nor institutions can make money. When going out for meals, everyone is complaining, even some relatively well-known market participants.
However, to be fair, since the director entered the market, the overall benefits from the stock market have outweighed the drawbacks, and the gains have exceeded the losses. Through the stock market, the director has earned a lot, a part of which is wealth, but more importantly, wisdom.
Charlie Munger once said that value investing is a kind of universal wisdom. The director used to be somewhat confused about this, but now has a better understanding.
A person who can do well in investing is likely to do well in other things, why?
Because they will gain a normal heart.
In fact, the most precious thing in this world is a normal heart. A person with a normal heart, if they become rich today, will not be anxious and lose sleep because of sudden wealth; if they are poor, they will not feel the embarrassment of being poor. They can be poor or rich, and no matter what the environment is, they can live through it and live every day normally.
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Maybe this is not very understandable to everyone, so let me elaborate. I don't know if everyone has seen it, many people are very easy to get along with when they are poor, but once they become rich, they become very disgusting and distorted. They look down on people externally, and internally they are very anxious, afraid that their wealth will be gone one day; on the other hand, some people are very elegant and easy to get along with when they are rich, and you feel like you are in the spring breeze when you see them. But once they have a bad day and suddenly become poor, they become very strange, haggling, complaining, and complaining to everyone that God has wronged them, just like a Xianglin's wife...
These are all because they don't have a normal heart, and they can't be calm in any environment, and are easily led by the environment.
Why does the director say that the stock market can make people gain a normal heart?
When the director first entered the market, like most people, he watched the market every day and stared at the K-line all the time, as if he would miss a great opportunity if he didn't stare at it for a moment. At that time, the director thought that if he could earn a few points every day, he would become rich in no time, and he happened to be in a bull market when he first entered the market, and he could often eat the limit of the board. At that time, the director was actually very obsessed, calculating every day how much money he had earned and how many days it would take to be financially free.At this time, my inner self was truly twisted and perverted. On one hand, I couldn't focus on my studies (I was still in school at the time), and every day during class or self-study, I was looking at the K-line on my phone, with my mood following the market; on the other hand, I became very restless, looking down on others with a dog's eyes, thinking that the things everyone usually does are meaningless, and feeling that the people around me were all lowly, and I was the most awesome...
Fortunately, the bull market ended quickly, and before long, the bear market came. At the beginning of the bear market, the director was similar to most of his friends, complaining and complaining all day, blaming heaven, earth, and the country, thinking that he could make money, so why were you against me? Then, as the bear market lasted longer and longer, the director became very desperate and depressed, starting to doubt himself, thinking that the money he made in the past was all due to luck, and that the stock market could not make people rich, and even wanted to withdraw from the capital market...
But a new bull market slowly emerged in such a pessimistic and desperate situation. In the new bull market, the director discovered a secret. The market in the last bull market was blowing the stories of those high-quality companies, and there was not much change in this bull market. The stories were still those stories, the points that were optimistic were still those optimistic points, and the big logic was still those big logic, such as the consumption upgrade of liquor, economic growth, and the endless demand for medical care... It's just that the ghost stories in the bear market basically disappeared.
That is to say, as long as it rises, it is all good news, as long as it falls, it is all bad news, the company has always been that company, and the industry has always been that industry. Maotai in the last bull market and the new bull market is the same, and the only thing that has changed is people's hearts and stock prices.
A better understanding of this point was one day in the new bull market, when the director suddenly had a whim and kept staring at Maotai's K-line, really staring, suddenly a bit dazed. You see, his stock price rose by 0.5 points for a while, and then fell by 0.8 points, and then kept going up for a while, and then retreated a little. Guess what the director was thinking at the time?
The director was thinking at the time, these few points reflected in the market value, in fact, it is hundreds of billions, the real world of Maotai is definitely impossible to have a value fluctuation of hundreds of billions within a day, and it is even more impossible for the value to have a difference of several billion between the last second and the next second.
In a second or an hour or a day, Maotai has always been this Maotai, but the market keeps giving it new quotes, and this change can also be very large. It was on this day that the director suddenly realized something and suddenly understood what Mr. Market was, and suddenly understood that it was not the wind that moved, nor the banner that moved, but our hearts that moved.
Let's take a look at the historical PE situation of Maotai, it is not difficult to find that Maotai has always had a valuation center, roughly around 30PE, but the time when it was really in this stage in history was very few, either it rose too much or fell too much, and its PE has always shown a cyclical dynamic change. Even the first market value of the big A, the belief of countless people, and the performance that can be said to be the most suspenseful Maotai is still the case, let alone other companies.
After understanding this point, the director couldn't help but roll his eyes, the so-called stock price and market value, in the long term, is indeed positively correlated with the company's operations, reflecting the value of the company, but this long term refers to a very long time. And most of the time, it actually only reflects the collection of emotions of market participants. Its essence is a super neurotic collection composed of countless neurotic individuals in the market (looking back at the first round of bull and bear cycles, the director is not a neurotic).So, some say that Mr. Market is a "manic-depressive patient," and the director finds this description not at all exaggerated. It is precisely at this time that the director began to lose interest in monitoring the market, even finding many of the market's behaviors quite ridiculous. For example, after a certain day when the market plummeted, there would be institutions convening emergency meetings to analyze the reasons for the sudden drop, and the same would apply after a surge.
It's quite laughable, isn't it? A market composed of a group of "lunatics" is expected to exhibit any kind of behavior, and even more laughable is that some "normal people" are earnestly interpreting the actions of the mentally ill...
It was from this moment that the director became very calm, hardly ever looking at the market anymore, and remained composed regardless of market fluctuations. When someone tells the director about a market crash, the director's response is often, "Oh, let it fall." When asked about their views on a surge or plunge, the director really wants to say, "I have no opinion. Why should I have an opinion on the behavior of a lunatic?"
After the director gradually achieved this mindset, they were able to focus more on research, studying the fundamental logic behind enterprises. When you truly immerse yourself in research, not paying attention to the market or the performance of manic-depressive patients, but only focusing on the corresponding enterprises and the business world behind them, you will become more and more calm, and have a more correct understanding of making money.
Yes, making money in the real world is not easy. Enterprises in the real world rack their brains and work tirelessly to make money, constantly fighting with themselves (improving internal efficiency), competing with rivals (business competition), and struggling against the macro environment (good enterprises will try every means to counter the cycle)...
Why should we expect to get rich overnight when others work so hard to make money? The more you study and understand, the lower your expectations will be. In other words, you will no longer dream of getting rich overnight, nor will you hope that every day's rise is related to you, and you can earn every penny of the market. The more the director thinks this way, the more they immerse themselves in research, the less they pay attention to the market, the more they pursue certain returns, and the less they want to get rich overnight, the more they can actually make money.
A typical example is that from 2024 to the present, it has been another "great bear market" with a general market decline, with more than 3,000 companies falling by more than 20%. However, the director's returns were positive. Why?
On the one hand, a large proportion of the director's holdings are in indices. On the other hand, the director has accumulated more chips at the bottom. The director wrote an article some time ago, although it only talked about the China concept internet, but the director's other holdings are not much different, and the China concept is the most representative of the previous decline.
A little-known fact is that although most enterprises and industries still plummeted this year, indices such as the Hang Seng Index and the CSI 300 have actually risen.
As long as you lower your expectations, stop thinking about getting rich overnight, and calmly observe the market, without being swayed by the market's manic-depressive behavior, it is not difficult to achieve returns. However, achieving higher returns will be very difficult.On the other hand, when you can observe the stock market with a detached perspective, remain calm, not be swayed by market fluctuations, not care about the "sudden rises and falls" of your account assets, and remain "unmoved" regardless of whether the market is "stormy or calm," then you can basically achieve the same composure in other areas of life. You can watch the people around you "make mistakes" with detachment, maintain inner peace no matter the environment, do what you should do, and be less troubled by emotions.
It is this composure that has made the director's life better and better in real life.
Therefore, the director is very grateful to the stock market. It is the stock market that has increased the director's wisdom, harvested a normal heart, and made life better and better. From this perspective, it doesn't matter whether the stock market has made money or not, because the money that can be invested in the stock market is originally unnecessary idle money in life. No matter how much or how little, it actually does not affect the director's daily life. What to eat and what to use will not change due to the surge or plummet of the stock market account.
Of course, this is also what the director repeatedly tells everyone that the money involved in the stock market must be your own idle money. In this way, you can be less concerned.