【The Core Logic of Investing】Listen More in Investing

Reading Notes:

1. Investing is Like Farming
   Investing resembles farming—both depend on external conditions. Since we can’t control outcomes, preparation is key. Store "grain" (cash, bond funds, etc.) in good times to survive bad markets.

2. Debt Resolution Methods

   • Lower interest rates

   • Convert short-term to long-term debt

   • Consolidate scattered debt

3. Banks’ Lending Motive
   Banks profit from interest, not principal (which belongs to depositors).

4. The Nature of Stocks
   Stocks have no utility value; their prices hinge on expectations and confidence.

5. Wisdom from "Happy Dad"
   "Losing money in one place doesn’t mean you must recover it there. Easier gains may lie elsewhere. Adapt to change, let go of the past."

6. Philosophy from "Flowing Cabbage"

   • Investing boils down to valuation and growth.

   • Overvaluation and declining profits are the biggest risks.

   • Future earnings are probabilistic—clear in hindsight, foggy ahead.

   • Most people have owned great stocks, but few hold them for massive gains. Keys:

     • Circle of Competence: Truly understand a company.

     • Moat: Emotional discipline against market swings.

7. Li Xunlei’s Data Insights

   • Despite record highs, nearly half (2,455) of U.S. stocks fell since 2010.

   • Only 12.5% of companies drove market cap growth; the rest contributed zero.

   • Since 1985, average U.S. stock returns: 3,617.1%, but median: just 1.1%.

   • Three Thinking Habits: Empathy, systems thinking, contrarian mindset.

8. Predicting Stock Trends
   Requires imagination—but ultimately relies on luck.

9. "Crystal Flyswatter" on Bull Market Phases

   • Phase 1: Value Reversion
     Prices rebound from extreme lows; most remain bearish amid unclear macro trends.

   • Phase 2: Growth-Driven
     Earnings and growth expectations fuel mid-cycle rallies, with improving fundamentals.

   • Phase 3: Sentiment Frenzy
     Rising prices justify further gains, drawing novice investors. Veterans grow wary but are mocked.

   • Key Takeaway: Each "rise" in a bull market has distinct drivers.