2025lovepeace

The three pillars of value investing: this industry is perpetual + value reversion + I buy more when it falls. These three logics require no thinking at all and are hard to go wrong over a five-year horizon. The大量的 investment research on Snowball is basically based on these three pillars, constantly setting new propositions, then finding data to test them, and reinforcing impressions through self-study. However, in my opinion, there is only one standard for true value investing: value discovery. Put simply, it means that a company can earn more money in the future and has the potential for sustained and stable operations. This requires a company—first, the management team is reliable; the product may temporarily underperform but aligns with the future development direction of the industry and has no potential risk of being replaced by new technologies or platforms. Second, the industry track the company is in is healthy, non-monopolistic (or the company itself is a monopoly), preferably an undeveloped but inevitably developing track (typical examples now are robotics, AI, satellites). Third, it is undervalued, misunderstood, wrongly killed, or driven by panic. If you look at Moutai from a value discovery perspective today, it is reliable and healthy with a monopoly, but the industry development is already sufficient. The current problem with Moutai is panic; people are overestimating the possibility of deflation and underestimating the country's determination for moderate inflation. So you might think, what's the difference between value discovery and Snowball-style value investing? The difference is that value discovery can also be used to analyze the tech industry and advanced manufacturing. For example, look at optical modules, which are core components of AI communication chips, with high value and even higher value after technological iteration.

Excellent traders have a mindset of "unity of person and sword" when trading, which does not require deliberate effort. As a trading master once said: "When you are struggling, fighting, or forcing yourself to make a trade, you are wrong and out of sync. The best trades require no effort." The most classic discussion on trading psychology is Douglas's "Trading Psychology Analysis," from which I share some excerpts: 1. The difference between excellent traders and ordinary traders is that they can buy and sell fearlessly, without hesitation, regret, or reservation, and are completely confident in their decisions. They can execute their plans with such confidence not because they have a unique analysis system, but because they have learned a special psychological skill that allows them to stay objective, calm, and avoid reckless actions. I call this state of mind the professional trader’s mindset. 2. You must accept the fact that "anything can happen" in the market, and you cannot predict everything accurately every time. 3. Since you know it’s impossible to predict everything perfectly, it’s equivalent to admitting your own insignificance and ignorance, so you will give up trying to predict frequently. 4. Since you have given up predicting, at every "moment," you are prepared to face "all possible changes" in the market anytime and anywhere. In other words, you calmly accept market risks, just as fishermen respect the sea. 5. Since you understand that trading involves risks and truly accept these risks, the current changes will no longer scare you, and you can calmly accept any extreme fluctuations in the market. 6. Since you have a clear understanding

I believe that the core elements of a successful trade are: following the trend, stop-loss, take-profit, rules, and execution. If a trader effectively addresses these five core elements of trading success, and is complemented by appropriate self-adjustment, over time, their mindset will gradually become calm—no longer rejoicing at gains, mourning losses, or feeling anxious about adjustments.
1. Following the Trend
The first rule in the "Twelve Rules of Wall Street" is stop-loss, which I used to agree with. But now, I think the first rule should give way to following the trend. If you cannot follow the trend, your operations will inevitably encounter many stop-losses. Therefore, following the trend is the most important element among the four key factors of trading.
Following the trend is simple—just four words. Every trader knows this, and can even come up with a bunch of reasons why. But how many truly understand it? Judging by the reality of most people's losses, very few truly understand. Whether it’s the overall market or individual stocks, the trend is the "main line." The formation of a trend is the result of all factors working together; any other single factor affecting the stock market can only have a temporary, localized impact on the trend. Once a trend is formed, it will last from several months to several years and is unlikely to change easily.
Therefore, those who follow the trend make big profits, while those who go against it suffer big losses. Following the trend is the first iron law of stock trading. Traders must have their own judgment of the trend; only on this basis can they truly follow the trend.
I now believe that to follow the trend, the following three issues must be addressed:
1. Fix your trend judgment cycle. Any trend judgment must be based on a certain trading cycle. Some people trade based on 5-minute charts, others on 30-minute charts, and some...

1. We all instinctively avoid pain. The simplest way to avoid pain is to convince ourselves that this trade will definitely make money (delving into fantasies) or to find evidence that proves this trade will be profitable. Regardless of the situation, we cannot objectively understand the possible market trends.
2. The comprehensive factors provided by the market environment are all deadly; traders must find ways to survive on their own. Because the information provided by the market comes in many forms, these forms can satisfy any trader’s fantasies, distortions, or expectations. If a trader’s view of trading is only filled with their own fantasies, distortions, and expectations, then they will often feel pain when their expectations are not met. This cycle will repeat until you actively stop fantasizing.
3. There are many factors that contribute to becoming a consistently successful trader, one of which is to let the market tell you what it will do. You need to let the market tell you where it is heading, where the end is. Your personal beliefs about losses, mistakes, greed (never being satisfied), and revenge have nothing to do with market trends.
4. At any moment, your previous trade’s profit or loss and the current market trend have nothing to do with each other. When you believe you must recover your money, your relationship with the market becomes adversarial. The market becomes your opponent, and you have no choice but to confront it rather than coexist harmoniously.
5. As long as you disagree, the market cannot take your money away. If you lose money, or lose more than expected, it means you have handed your money over to the market.
6. Let the market tell you what to do next and give up on fantasies about losses, mistakes, and revenge.

What is volatility? It means that the stock price used to fluctuate daily by about 1% to 2%. For example, one day it might go up by 2 points and down by 2 points. Suddenly, one day it jumps by 5 points, and after two days, it drops by 4 points. The stock price begins to fluctuate wildly and irregularly, but it stays in the bottom range without rising. This is a sign that the stock is about to surge. If it repeatedly rises and then falls back, that is also a precursor to a price increase.
In the view of professional traders, an increase in volatility is a very important signal, indicating that funds are starting to flow in and activity is picking up. There are many such examples, I won't list them all. You can look into it yourself. When those big bull stocks started at the bottom, they suddenly began to fluctuate up and down, with volatility expanding, then they hit two or three limit-up days, then fell back, then rose again, then dropped. But you'll notice that their prices never really broke out. That definitely means the main players are building positions.
Therefore, stock trading requires learning some key indicators, rather than obsessing over mysterious indicators that you don't understand the principles of. Just remember this: volatility. When volatility clearly rises, it is a sign that the stock price is about to surge. $HEI $SHELL $FHE

Those who can truly survive and make money in the crypto and stock circles are not relying on complex indicators or advanced trading strategies, but on mastering simple principles to the extreme. If you follow these nine rules, you'll be more stable than most:
1. When the crypto stock price surges, keep an eye on major shareholders reducing their holdings—if insiders are cashing out, don't be the next bagholder. When crypto stocks skyrocket and are praised across the internet as "divine crypto stocks" and dominate the hot list, first check the movements of major shareholders. If the actual controllers or executives are heavily reducing their holdings at high levels, no matter how compelling the story, stay calm and decisive. If even those who know the company best are fleeing, you should be even more cautious—don't rush in blindly. Last year, a leading energy storage company saw its stock rise from 20 yuan to 45 yuan, doubling in value. During this time, major crypto shareholders announced reductions for three consecutive days, and many influencers were claiming the "main upward wave has just started." As a result, within a month, the stock was halved to 22 yuan, trapping countless retail investors who bought high. The essence of chasing high is using your own capital to gamble on whether the main players will leave you a way out.
2. Avoid investing in companies that do not pay dividends long-term—even if they are profitable—because their cash flow hides big issues. Some companies show profits on paper but never pay dividends or pay very little; this could be due to fake cash flow, appearing profitable but actually lacking funds, or because the company has a small scope and is unwilling to reward crypto shareholders. Truly high-quality companies prove their strength through dividends.
3. Don't chase stocks that have risen too high— the more they surge, the more they fall. Stocks that have increased by 50% in the past two or three months or doubled/tripled over the past one or two years should be approached with caution, regardless of how good the story sounds. Just like I have a friend who bought in last year...

Under the mindset of trend analysis, trends incorporate all information, including logic and fundamentals. When logic and price movements resonate, it is the best time to trade. A trend without logical support cannot go far. Without logical reasoning behind the trend, it is purely wishful thinking. Healthy trends do not rise every day; instead, they move in a pattern of two steps forward and one step back, oscillating upward. If a trend develops daily large bullish candles, it indicates a climax and a sign of a top. Based on the fact of "two steps forward, one step back," it is actually possible to break down the trend into segments for operation—buy low during the "retreat" phase and sell high during the "advance" phase. This way, you participate in the trend while avoiding large retracements. Since trends can be segmented into waves, range-bound oscillations can also be divided into segments (because the market is in oscillation 70% of the time, with very few clear trends). Buy low at the bottom of the range and sell high at the top. As for a downtrend, it must be absolutely avoided. Under the wave operation mindset, the most important aspect is the change in supply and demand patterns reflected in volume and price relationships. First, identify the market background—different backgrounds require different strategies; a strong background indicates a sustained trend with holding positions as the main approach, while a weak background suggests high selling and low buying. Second, recognize upward trends, range oscillations, and downtrends. Third, identify the strongest logic, as logic is the foundation of price movements; trends are the result of logic. Fourth, identify supply and demand patterns—positions where the probability of decline is low and the probability of rise is high. In terms of operation, be good at waiting for signals to appear and trade purely according to signals with a clear mind. $VELODROME $VELO $ELA

Because of poverty, I try to seize every trading opportunity. This is not a bad trait, but a necessity. The first lesson in finance teaches the time value of money, and the first lesson in economics teaches the effect; both tell you that having ten million at 30 years old and at 70 years old are not the same. Value investing paints a picture where you rely on compound interest to earn ten million after thirty or forty years. But the problem is, you're already 70, what do you need ten million for? Once you've entered this market, everyone's original intention is to make quick money. Honestly, how many people, when they first entered this market, didn't dream of defying the odds? And for retail investors, value investing is too slow. If they really use their tens of thousands or hundreds of thousands of principal for long-term trading, even with a stable annual return of 10-15% like Buffett, it would take 5-7 years to double. After twenty years, your 500,000 could grow to two or three million, and then what? Moreover, how many people don't even have 50,000 in principal? To take a step back, even if you do, can you wait? How many 5-7 year periods do you have in your lifetime? Therefore, retail investors don't deserve to talk about win rates; their focus should only be on odds. And high odds always mean low win rates. To turn things around, frequent trading is inevitable. Just like playing Texas Hold'em, short-stack players can't support the back-end strategies that many deep-stack players use to balance their play. If you want to turn things around, you must expand your range to seize a glimmer of hope. There are only two paths: either be continuously exploited and die slowly, or increase your entry rate to gamble, but at the cost of high losses. These require you to have solid post-flop skills to compensate for retail investors.