What is the true competitiveness of individual investors in the crypto circle?

Let’s talk about the true competitiveness of individual investors.

Some believe it is financial analysis and quantitative analysis.

However,

I personally think,

these analyses are not that important,

and not difficult.

The real competitiveness should be that it is truly important,

secondly, that everyone has a certain degree of differentiation in this area.

For example,

arithmetic is a skill everyone can master,

so it’s hard to show differences in this regard.

If no difference can be demonstrated,

how can competitiveness be reflected? Financial analysis is somewhat similar in nature.

Investing is essentially a game,

financial analysis is necessary,

just like arithmetic.

If you can’t even do basic arithmetic,

it’s obviously impossible to participate in math competitions.

Therefore,

not understanding financial analysis is not acceptable,

but financial analysis is just a “two-foot hurdle,”

anyone can cross it with a little effort.

Some people have higher levels of financial analysis skills,

which is like an international high jump champion compared to an ordinary person,

but there isn’t much advantage,

because as long as you can jump over the two-foot hurdle,

the marginal advantage is not obvious.

This is good news for most people: you don’t need to become an accountant.

If everyone’s competition is only about financial analysis,

then the world’s best accountant should be the best investor,

but that’s not the case.

Therefore,

ordinary people only need to have a primary school level,

be able to do basic arithmetic and understand financial statements,

and master dozens of key items.

Although this requires some time accumulation,

most people can do it,

and it’s not very difficult.

Another slightly more complex area is qualitative analysis of companies.

Qualitative analysis is more artistic,

not as simple as mathematics,

but it requires persistent research and industry tracking.

The number of industries is limited,

you can continuously accumulate knowledge through business magazines,

newspapers, and books.

Then,

deeply research certain companies,

perform qualitative and quantitative analysis of companies.

This process requires time accumulation,

so it demands a deeper and more comprehensive ability than financial analysis.

However,

it’s not particularly difficult,

most people will understand it after reaching a certain level.

For example,

tracking a company like Moutai,

you can find various analyses of Moutai on Xueqiu,

after organizing dozens of comments,

you can have a relatively clear understanding of Moutai.

This process may take one or two years,

because you need to continuously accumulate and digest information.

Just reading others’ articles doesn’t mean you truly understand,

superficial understanding and real comprehension are two different things,

there is a certain hierarchy in between.

Therefore,

this process is relatively more difficult.

In this process,

everyone should not focus too much on individual companies.

Industries can be studied more,

because the number of industries is limited,

which can increase your business knowledge; but for companies, don’t spread your attention too thin.

Because human energy is limited,

if you are not focused,

your understanding of each company will be very limited,

and your capability circle will not be deep enough.

When your capability circle is not deep enough,

mistakes in investment are more likely to happen.

Therefore,

broad focus is not necessarily good,

excessive attention can lead to a shallow capability circle,

and the depth of the capability circle is a key factor for success.

The capability circle needs continuous effort to explore and deepen,

this process is relatively difficult,

I think this is a “three-foot hurdle.”

Someone asked whether diligence is necessary in investing.

I think this is different from entrepreneurship,

being overly diligent in investing may not be a good thing.

As long as you maintain a certain level of diligence,

it’s enough.

For example,

Warren Buffett spends five or six hours a day studying annual reports.

Moderate diligence is necessary,

but overdoing it is not needed.

Why? Because the more diligent you are,

the easier it is to generate new ideas,

and let your capital move accordingly.

Human nature is like this,

thinking every day,

acting every day,

easily leads to “hyperactivity.”

When you finally buy a stock you like,

if you always pursue new ideas,

you will lose patience and persistence for your original investments,

and you will prefer to chase emerging industries and companies.

People like to pursue novelty,

which makes me want to do an episode on evolutionary psychology,

to explore why people crave novelty so much.

Diligence itself is not a bad thing,

this virtue and ability are not problematic.

However,

in the financial investment industry,

excessive diligence can lead to “hyperactivity,”

exposing many weaknesses of human nature,

such as greed,

lack of patience,

desire for overnight riches, etc.,

ultimately leading to investment failure.

Therefore,

what I want to emphasize is,

although diligence is important in investing,

it is not that important.

Over-diligence can bring many side effects.

So,

what is the most important competitiveness in investing? Actually,

the most critical competitiveness is human nature.

At its core,

human nature is: what kind of person you are,

whether you can overcome your weaknesses,

or whether you are naturally endowed with some good qualities.

Specifically,

it is about being rational and honest.

What is a “good person”? I think,

the most basic standard is integrity.

Integrity means not being greedy,

not pursuing things you shouldn’t get.

At the same time,

patience is required.

Patience means not harboring illusions of overnight wealth,

not being driven by human weaknesses.

People often like quick profits,

hoping for a few limit-up days,

but as a decent person,

you should understand,

such situations happen occasionally,

but cannot last long.

Therefore,

don’t adopt unrealistic methods.

When a person in marriage expects perfection from their partner,

such an idea is unrealistic.

The same applies to investing,

we should be down-to-earth,

not chasing concept stocks or hot topics,

but focusing on areas we understand.

This is the most basic principle.

Just like shopping in a mall,

you wouldn’t spend a lot of money buying something you don’t understand,

investment also requires rationality,

not driven by desire and illusions.

We need patience,

maintain independent thinking,

and avoid blindly following trends.

When you overcome many weaknesses of human nature,

you will show a good quality in life.

This quality makes people think you are a good person,

honest and upright,

honest with yourself and others.

You won’t pursue illusory things,

nor hold unrealistic ideas.

In the investment process,

these excellent virtues will manifest.

Financial analysis and directional qualitative analysis are important,

but in investing,

what kind of person you are is more critical.

If you temporarily lack these abilities,

through the process of investing,

you will gradually improve.

Some people are naturally stronger in this area,

and you may be somewhat weaker,

but as long as you persist,

you will have significant changes in human nature.

Therefore,

the reason I advocate young people to invest is precisely because of this.

Investing can not only increase your wealth,

but also elevate your human nature,

making you a better person.

I believe,

no other profession in the world can so efficiently realize both wealth growth and human development,

which is also the main reason I want to make this program.

To summarize,

the most important aspect of competitiveness is human nature,

what kind of person you are,

this is crucial,

probably accounting for 70%.

Diligence only needs to reach a certain level,

no need to be overly diligent,

so this is good for lazy people.

In fact, most people are lazy,

to some extent,

which is also a good thing.

Financial analysis is not that important,

doing it roughly is enough.

Industry research and capability circle cultivation are relatively more important,

requiring continuous effort and learning,

but these are all achievable,

and have nothing to do with IQ,

but are closely related to persistence and focus.