Investment is about setting up a game together

What is a project? It is setting up a game.

What is investment? It is participating in setting up a game.

Any investable project is essentially the same, that is, to build a platform, trying to gather as many performers as possible. There will also be some people involved in building this platform. If, during their participation, the number of performers increases, then the platform looks bigger, which will attract more people to join in building the platform, allowing those who participated earlier to sell their positions at a higher price to others.

This is a game; almost no one who builds a platform hopes their profits come from the rent paid by performers.

Everyone will discount the future rent that can be received to the current market value and, at an appropriate position, pass on the right to collect rent to the next person.

As expectations for future rent increase, this part will be taken into account during discounting, so the current price will be extremely high, because no one wants to sell what looks like a very large dream at a low price, thus creating the so-called market dream rate.

However, if how long future rent can be collected appears very unstable, then the current price will be very low. For example, those that can break even in a year have a greater chance of not lasting a year, because otherwise, why would someone sell you this opportunity instead of breaking even themselves? Therefore, the more unstable the future rent expectations are, the lower the present value will be.

Buffett said he doesn't like to invest in internet companies because these companies are very unstable; today it's you, tomorrow it's him, even the largest giants can be quickly eliminated with the birth of new technologies. So he prefers more mature and stable demands, expecting to collect rent for hundreds of years without change.

However, he ultimately surrendered because stability and dreams are two legs; choosing only one is called stubbornness, and the focus is on cost-effectiveness.

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