Today, let's talk about the understanding of investment and some new thoughts I've had recently.
Among the many profit-related terms, I particularly like the word "winning probability" because investment is essentially a game of probability. Entering the market is like entering a big gambling table. This table is not only filled with institutions but also individuals. Among these participants, there are gamblers, speculators, self-proclaimed value investors, and so on. It can be said that this gambling table treats almost every participant equally, but it is still difficult to win.
All participants hope to win in every gambling session, but the results often go against their wishes. Most participants, for various reasons, are unable to achieve the desired results and withdraw from the game early. Some have lost more times than they have won, and some may have never won at all, eventually permanently leaving the gambling table. It should be noted that once you withdraw, you will never have any chance of winning again.
Never quit the gambling table at any time, especially when you are losing miserably. At least maintain the identity of a participant and leave yourself a chance to win.
Being in the market as a participant on the gambling table, there is never a moment when you are not affected by market fluctuations. These fluctuations are also known as rises and falls. For a qualified participant, this is a normal occurrence. They will not be affected by these fluctuations but instead benefit greatly from them. They will find the right position in the volatility and choose to participate in gambling sessions with higher winning probabilities, ultimately maintaining a probabilistic advantage over other participants, which already surpasses most people.
On a gambling table, if you can continuously participate in gambling sessions with higher winning probabilities, the final result will likely be more wins than losses. That is enough. It is very unlikely to win every gambling session. Recognizing this, at least you will spend more time on this gambling table than others, and naturally, your chances of winning will be greater.
No one can accurately predict the right market position. We can only buy and sell at what we believe to be the right positions. Most of our decisions should be based on some reasoning. Whether this reasoning is right or wrong, at least it can convince ourselves to invest in a certain variety to some extent. Otherwise, any buying or selling operation at this time is just following the trend, either chasing after a rise or on the road to chasing after a rise. As for considering costs and value, considering risks and potential returns, these will be gradually improved later. At the beginning, we definitely won't consider them so thoroughly.
Since it is a game of probability, we must be prepared to lose. When the winning probability is higher, we can appropriately increase the aggressiveness of our assets. When the winning probability is lower, we can take partial profits and combine them with our actual situation to increase the defensiveness of our holdings, continuing to wait for the next opportunity to act. Periodic market fluctuations are the norm and the fundamental source of profits.
That's all for now.