Recently, I began to understand a truth. The “awe of the market” that we often say is not simply pointing to the market itself, but in essence it is awe of human nature. Mr. Market is inherently capricious, but the one that plagues us most behind the market is the weakness in human nature. One master once said that don’t reverse humanity, which is our inherent weakness, making human beings imperfect, but more complete. In the end, only philosophy and beliefs can overcome human nature. This is also why in investment, philosophy is above mathematics and theology is above philosophy.
The most unneeded in investment is cleverness
The capital market is made up of millions of the brightest people. To defeat the market, cleverness is the least needed factor. Being a good investor also don’t need that. The market is the wisdom of all people, and the cleverness is only dependent on the individual. At no time can an individual overcome an overall organization. Those who believe in smartness are finally eliminated by the market in the long history.
The first kind of smart investors are someone who use others as a leek to harvest and want to make money in the market game. The core part of the market game comes from the fact that you think stocks as simple chips, and then you feel that someone will pick up your chips at a high price. In this game, you think you will never pick up the last one. However, as a group, there are always someone will pick up the last one, and if you are constantly playing in this game, you will definitely be the last one.
The second kind of smart investors think they can predict the future. However, if someone can predict the future, the Roman Empire, the Ming Dynasty, the Ottoman Turkish Empire, and the Mongol Empire will not perish. After reading a lot of history books, I am most impressed that the future is unpredictable. People always think that they can predict the future of stock prices, the future of the industry, and the future of the company. In fact, several correct judgments may have factors of good timing, geographical convenience and good human relations, but the probability that a person will continue to make a correct prediction for the future is zero.
The third kind of smart investors think that they are right and the market is wrong. This is the reverse investor we often see. Historically, most of the reverse investments have been eliminated by the market. Most of the time, the real market is very effective and can reflect the value of a company objectively and correctly. As I mentioned before, the dimension of this company from the world is far better than the individual.
How to stay humble and enterprising for a long time?
No matter investment or life, what we are most afraid of is complacency. Before a little achievement, pride, arrogance and overconfidence will bring devastating blows to the future. In our human nature, the pursuit of success is not only the need to satisfy the material richness, but also the hope of obtaining the recognition of others. Therefore, getting the compliments of the outside world is a driving force for many people to make progress. And this complacency often destroys a person quickly. Whether in the investment world or business, many of great people in history, were eventually brought into the abyss by their complacency and pride.
It is very difficult to maintain humility for a long time. In most time, we can be humility on the surface, but we can't put ourselves down deep in heart. After all, successful linear thinking and path dependence will allow us to pay too much attention to our abilities and ignore the opportunities given by the times. I personally think that only by reading more books, learning more about history, and understanding the smallness of individual, can we truly be humble and keep inner humility in the market.
And how to keep being enterprising? After many people have achieved initial success, they will no longer be as aggressive as they were at the beginning, and will not have the same sense of hunger. However, investment itself, relies on luck and skills in the short term but only relies on skill in long-term. The best way to stay ahead is to stay tuned. Always remember why you invested in the beginning, and treat this as a career you really love, not a tool to make money. Those great investors have kept their original heart during their careers.
Respect humanity is to respect the market
In the past, Lin Lijun, general manager of Huitianfu, wrote an article. In fact, Guo Jing is suitable for investment.
I have read this article at least ten times at different time and in different stages of life, and every time I have a full harvest. In fact, Buffett, Guo Jing, and Forrest Gump are the same kind of people. They are born with human nature talent. They are simple, upright, unselfish and tenacious. After Buffett became the richest man in the United States, he did not change his life. Every day, he drove to McDonald's to buy burgers, drank Coke, and read the company's earnings. After becoming a hero, the heart of Guo Jing has not changed. Forrest Gump’s story, on the surface is “fortune favors fools”, but behind it is hidden character with high moral.
The key is that the morality of these people has never changed with wealth, social status, and ability. They developed a strong sense of mission before the age of 40, and they have been chasing the ideals of the past for the rest of their lives. This group of people is suitable for investment.
There is also a group that suitable for investment, someone has a deep understanding of philosophy, history, and even theological beliefs. They look at the cycle of humanity from a higher dimension and understand human weaknesses. These people have either experienced several cycles by their own or have a deep understanding and awe of human nature. Investment is essentially a mathematical game. But what really powers mathematics is the philosopher, and above philosophy is theology.
So, in the end, everything you do is a projection of the inner world. Your investment method, knowing and doing, also comes from a stronger heart. Those people who have achieved excessive returns in this market for a long time, they must have the values of integrity, and be able to overcome the weakness of human nature and maintain a sense of awe. Whether it is investment or life, long-term happiness and success come from awe of human nature.