I have shared some of the views of Lin Yuan, a well-known A-share investor, in my articles many times. His views can often give people deep inspiration from a very unique perspective.
Recently, I saw another very interesting video of his. This video is Gelong's interview with Lin Yuan.
In the interview, Gelong mentioned Lin Yuan's experience:
In 2007, the closing price of Moutai stock was 199 yuan, and the net profit of that year was 2.8 billion yuan. In 2013, the closing price of Moutai stock was 113 yuan, and the net profit of that year was 15.1 billion yuan.
During these six years, Moutai's net profit has increased by more than four times, but its stock price has fallen instead of rising based on the annual closing price.
In this regard, Gelong asked Lin Yuan how he had survived these six years and how he had been able to hold on to Moutai and not sell it.
Lin Yuan answered very straightforwardly. He said that for him, this was not endurance.
First, he bought Moutai at a price much lower than the stock price at the time.
Secondly, he saw that Moutai's net profit increased significantly in the past six years, which made him more convinced that Moutai's true value was much higher than its stock price. In this case, he would not consider the stock price at all.
Here, it is necessary to add some background knowledge:
From the end of 2007 to the end of 2013, Moutai's stock price experienced two fairly large bull-bear cycles. In these two cycles, Moutai's stock price retreated by more than 50%.
Combining this background, we see that Lin Yuan managed to completely ignore two major price pullbacks of more than 50% over a period of 6 years, and firmly held on to his favorite investment targets.
This is exactly the same as some of Buffett's operations.
Going further, this is how I understand Lin Yuan’s two statements:
As for the fact that he did not feel pain when the purchase price was much lower than the market price, I guess what he wanted to express was: for him, if he buys an investment product at a very low price, as long as the subsequent price is much higher than his purchase price, he will not feel "painful" psychologically, and will not feel the pain of losing money.
When the real value of an investment product grows significantly and is significantly higher than its stock price, Lin Yuan does not worry that the stock price will always remain low, believing that it will eventually show its value. At least he managed to wait for 6 years without caring about the stock price.
After watching this interview, I immediately thought of the crypto world and myself.
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If I count from the time I first bought Bitcoin and Ethereum to now, the prices when I bought them were much lower than their current prices.
But in this process, I really can't help but "suffer", because although I know that the long-term price trend of Bitcoin and Ethereum is definitely bullish, when I feel that the prices of Bitcoin and Ethereum (in the late bull market) are "too high", I still can't help but sell them - which is what I often call bull market fixed selling.
Although I often talk about selling at the right time in a bull market, and I have practiced this strategy in the past cycles and luckily I got the prize every time, I am actually walking on thin ice because I am not so sure whether I can sell at the right time next time.
So far this year, I have read Dan Bin's book, Munger's book, and now I am reading Buffett's book. Frankly speaking, after reading these predecessors' books, I feel more and more that the profits from those bull market sell-offs were my good luck, not necessarily my good judgment. Now after reading Lin Yuan's interview, I feel this even more strongly.
Now, let’s think about Bitcoin and Ethereum in this way:
First of all, whether from the perspective of internal ecological development, community consensus, or external capital entry, compliance development, etc., I firmly believe that the long-term value of Bitcoin and Ethereum is upward.
But if the same story of Moutai happened to Bitcoin and Ethereum, for example, from this year to 2030, six years later, the prices of Bitcoin and Ethereum would still remain at US$60,000 and US$3,400?
I wrote in an article earlier that if the price of Bitcoin in this round of market does not exceed $100,000, I will not even think of selling it. I will hold it until the next expected bull market in four years.
But this assumption actually has a default premise: that is, in four years, the price of Bitcoin will definitely exceed $100,000.
This is like Lin Yuan's understanding of Moutai, and our understanding and cognition of Bitcoin and this field! #币安合约锦标赛
