Teaching You to Trade Stocks 95: Cultivate Yourself

2008/1/22 16:10:20

This ID feels that when people are rattled, their learning efficiency probably increases a bit, so I'm writing lessons consecutively — for those with the karmic affinity to receive them.

To defeat the market, you must first understand the beings within it. The market is the product of collective forces, and those contributing to this force aren't machines but living, breathing people.

In the market, the vast majority are clueless — they make money without knowing why, lose money without knowing why, and eventually become frogs sitting in a well, saying: "The sky above the well is so vast and complex — how do I deal with it? Where's my crutch?"

Almost everyone who enters the market has no idea what the market is, yet they keep pouring money in. Eventually some of them, eyes bloodshot from losses, mortgage everything they have and throw it in.

Regarding the market, this ID has a view that may seem a bit extreme but is absolutely correct: in the market, you should aim for zero-investment returns.

Many people are very curious about this ID's investment history. Of course, there are many things that can't be said because they involve too much. But there's one thing this ID can say: in the market, this ID has essentially never invested a single cent of personal money.

This ID's first pot of money came from new share subscriptions in early 1990. The money used to buy those new shares — embarrassingly — wasn't this ID's own. After listing, the principal was returned, and the remaining profit became this ID's first capital in the market. From then on, no matter how much money this ID has operated with, this ID has never put a single cent of personal money into the market.

Of course, replicating the frenzied conditions of the early 1990s is no longer possible. But this ID still believes that the money you put into the market must never increase without limit. If your first investment of 1 million can't make money, what are you still investing for? You can't even handle 1 million — do you think you can handle 1 million squared?

As long as you have stable technique and operations, the initial investment amount is fundamentally irrelevant. Even if you only have 10,000 yuan, after 10 doubling operations it becomes 10 million. And even if you start with 10 million, after 10 consecutive losses you won't have much left either.

The issue isn't how much you invest — it's technique and operation. Everyone who treats the market as a casino is destined for a tragic ending.

For the beings of the market, this ID's first piece of advice is this: manage your first pot of money well, then take your principal back, and finally turn that profit into a massive number. This is the true way to operate in the market.

Real success in the market is measured in decades. No matter how much money you start with, 10 years is enough to elevate you to a sufficiently high plateau — a pot of money with zero cost and zero investment that lets you operate in the market with incomparable ease.

The vast majority of people keep investing more out of greed, then flee in panic out of fear. But the market — once you enter, it's nearly impossible to leave. Those who flee in panic are invariably lured back during euphoric peaks, and eventually the frog gets boiled. Is this scenario really so rare?

Then there are quite a few who make it their business to judge others. In the market, the only judgment that matters is your own operations. Spend that time practicing your operations instead — that's what a market participant should be doing.

The market is not a talent show. Don't treat yourself as a contestant or their fan. In the market, it's blades and blood — contestants and fans are only fit to be boiled.

In the market, the only thing worth considering is improving your operational skill — this is the root of everything. Other people are, at most, your sparring partners.

When studying theory, you must thoroughly trace it to its source, then continuously level up through practice. Skill must be forged through grinding. Use your first pot of money — a sum that absolutely won't affect your livelihood — to create an operational story. That's what it means to be a market operator.

There are many layers to operation — it's a process of continuous cultivation. Get the fundamentals right, and you can keep advancing. Market opportunities are endless. Taking an elevator ride once isn't scary — what matters is that after the elevator, you don't ride it again.

Cultivate yourself. There is no other way to survive in the market.