After losing 2 million, I realized! Why is value investing anti human? Here, I would like to share my reading notes on 'Value' with my brothers 1. Choosing who to travel with is more important than going to a distant place 2. Summary of Hillhouse Capital's Practical Experience: The Four Cognitive Black Holes of Value Investing, Most People Fall into the Third One 3. When Laozi Meets Buffett: How to Use Eastern Philosophy to Control Western Finance? Money never sleeps. The term 'pattern' may seem grand, but it is actually closely related to us: Investment requires a broad perspective and insight into real opportunities; Entrepreneurship requires a broad vision and identifying industry trends; Work should have a broad perspective and grasp the essence of the problem. Many people recite Buffett's golden words backwards, but they can never achieve success like stock market gods. Because they simply do not possess the mindset of Ba Lao. In the book "Value", Zhang Lei spends an entire chapter discussing the "Great Pattern View". He broke down this grand proposition into four elements, which are worth savoring repeatedly. 1/5 Profound Insight The first element of the great pattern view is profound insight. The butcher is willing to prioritize insight because it is the source of information and the foundation for forming a great vision. The line from 'The Godfather' hits the nail on the head: those who can see through the essence of things in half a second are destined to have completely different fates than those who will never be able to see them clearly for a lifetime. One manifestation of profound insight is to analyze and judge from the big picture to the details, and to see trends in the blink of an eye. Discovering unmet needs in the tide of the times and finding solutions to meet those needs is the ability of an excellent entrepreneur. Being able to accurately identify and analyze such enterprises, and ultimately make the right investment decisions, is the ability of an excellent investor. Deep insight also requires distinguishing between "change" and "constancy". Only by seeing changes can we know what remains unchanged; Only by seeing the unchanging can one realize what is changing. This dialectical thinking can also help us develop a habit of continuous reflection. 2/5 Strong Empathy The second element of the great pattern view is a strong sense of empathy. Empathy does not equal sympathy: the former is a capacity for empathy, while the latter is a feeling of compassion. Stock god Buffett is a person with strong empathy. He can always stand from the perspective of a business manager, assuming that he is in the same position and environment, analyzing which aspects of the current business situation are caused by the manager and which are not. This ability helps identify the "prince in trouble" in the stock market and unearth companies with real growth potential. We often see different "investment schools" fighting against each other: You are 'technical analysis', I am' fundamental analysis', pinch! You are a 'value investment', I am a 'growth investment', also pinch! Even after arguing a thousand times, they haven't really listened to each other, they just repeat their preconceived views. Lack of empathy can make you narrow and difficult to learn from others. 3/5 focused execution The third element of the great pattern view is focused execution. This element actually includes two key points: focus and execution. Focus is the common answer for successful investors and excellent entrepreneurs. Warren Buffett and Bill Gates have both stated in public interviews with the media that their success is attributed to focus. The Wealth Barrier of Buffett and Gates lists three dimensions of focus shaping: ① Only by focusing on a specific field can you become an expert ② Only by focusing on limited skills can you acquire a special skill ③ Only by focusing on important tasks can you achieve success in your career Focusing alone is not enough, you need execution to push it to the end. Having set a goal and wholeheartedly dedicating oneself to even the smallest things - this is a manifestation of execution. When it comes to execution, many people associate it with specific tasks in the workplace, but in fact, there are far more tasks that require execution. Many people have investment ideas, a few have investment methods, and only a very small number can persist in execution. Without strong execution ability, few people can steadfastly execute their investment strategies amidst external news turmoil, mutual comparison and boasting, and delayed results. Investment is always easier known than done. 4/5 Long Term Concept The fourth element of the great pattern view is the concept of long termism. Many people have formulated savings plans, financial plans, and investment strategies, but ultimately none of them have been implemented. Why? Because 'short-term effects cannot be seen'. I want to save for the future, give up for something I want right now A friend who wants to manage their finances according to a plan but sees that the returns are not as good as those from speculation has given up I wanted to invest strategically, but after holding for a month without seeing any increase, I gave up Those who give up, conform to human nature; But investment requires anti humanity. More precisely, investment itself is anti animal. What is animality? Just seeking immediate enjoyment, unwilling to delay gratification. Chasing hot topics, shearing wool, seeking "free", wanting to make "quick money"... These are animal behaviors that do not require any rational thinking. But investment requires rationality, and more importantly, a mindset of ultimate success: investors must focus on the long term and make "big money" rather than "fast money". Can investment research reports from top overseas institutions help you make quick money? I can't. Why do butchers extract, translate, and interpret these reports? Because practitioners of long termism can enhance their cognition through these; Earn wealth that matches it through higher dimensional cognition. What we earn is not 'fast money', but 'big money'. As provided by the Asset Allocation Research Institute, there are two unique values—— Firstly, channels: crossing language barriers and mastering the investment perspectives of top global institutions; Second, time: improve the learning efficiency, go through the long talk and hit the essence. Investors with long-term vision are lifelong learners. They understand the true value of both. Write 5/5 at the end Finally, let's revisit the four elements of the 'Great Pattern View'. 1. Profound insight requires us to recognize the essence of things and discern between 'change' and 'constancy'. 2. Strong empathy requires us to put ourselves in others' shoes, be inclusive, and learn from others' strengths. 3. Focused execution requires us to focus on one point and achieve the ultimate with strong execution. 4. The concept of long termism requires us to focus on the long term, lifelong learning, and not succumb to animal instincts. I believe that adhering to long termism and not succumbing to animal instincts are essential qualities for successful investors. Encouragement with the brothers in front of the screen~