Gaming, Investing, Learning Math.
Learning about investing doesn’t necessarily mean aiming to become a master investor. Much like learning to cook doesn’t entail becoming a Michelin-starred chef; cooking at home can be a delightful experience. Moreover, it can help you avoid financial losses.
The primary reason stocks rise is simple: holders are unwilling to sell. Long-term investors, especially those with a deep understanding of a company, are even less inclined to sell their shares.
Not all fundamental analyses are more informative than the price movements of stocks. Sometimes, these analyses only amount to elementary-level price trend predictions, indicating that if such standardized products’ prices cannot be predicted, then the prices of many other products are even more unpredictable.
Business models are not secret formulas. Every successful entrepreneur has their unique secret sauce, and not understanding this secret is akin to not understanding the business itself.
Long-term gains are invariably tied to the growth of outstanding companies.
The growth of societal economic value is generated by exceptional businesses. Over time, companies that contribute significantly to societal value have the potential to convert that value into economic wealth.
Short-term price volatility is also crucial; companies with significant fluctuations are less suitable for long-term investment.
One can only aim to avoid systemic risks rather than escaping selective risks.
For the average person, Peter Drucker’s insights might be more practical than Warren Buffett’s.
The essence of business secrets lies in what is being sold: ideals, style, meticulousness, beauty, anxiety, happiness, or tears.
What you wouldn’t want for yourself shouldn’t be wished upon others; businesses that peddle undesirable goods typically don’t last long.
Positioning is crucial, but perception is even more so.
The core objective is to make reasonable decisions under conditions of incomplete information, grounded in an understanding of human behavioral patterns and the core of value creation by businesses.
Value accumulation and feedback are essential.
Individuals should not underestimate the value creation potential of platforms.
The common interpretation of “bad money drives out good” is flawed; understanding the true principle helps identify genuine value.
Key economic principles are simple and direct, such as efficiency arising under constraints and the concept of “bad money drives out good.”
The difference in return on investment between less excellent and excellent companies might not be huge, but it’s significant enough to result in a substantial disparity in investment returns.
Humans are marginal decision-makers and analysts, always prioritizing what is immediately crucial. Thus, all historical experiences must be contextualized within the decision-making background and platform of those times.
Stock price movements fall into three categories: rising, falling, and oscillating. In the long run, good stocks tend to rise. It’s crucial not to overly challenge one’s own understanding. Stocks that contribute societal value, have stable operations, reasonable valuations, and demonstrate long-term growth are typically the investment choices for most people.
The likelihood of an individual picking good stocks and outperforming the index over the long term is quite high, though significantly surpassing the index is less likely without professional expertise, which is rare.
The advantage of professional investors may not always lie in picking better stocks but in avoiding unnecessary risks.