# Three Types of People in the Market

There are only three types of people in the market:

**The First Type: People Who Don't Understand**
Chasing trends, chasing emotions, buying high and selling low,
Passionate yet always doing the wrong thing at the wrong time.
They are the most numerous and the loudest.
——I used to be one of them.

**The Second Type: People Who Half-Understand**
They know slightly more than those who don't understand,
Yet are slightly greedier than those who truly understand.
They know the principle of "slow is fast," yet find it too slow, too hard, too boring;
They believe they have exceptional insight and skill, always wanting to catch the big opportunity in one shot, to land safely in one go.
——I used to be one of them too.

**The Third Type: People Who Understand / Who Have Achieved Enlightenment**
They are extremely picky about their targets, almost ruthlessly disciplined in execution;
They believe in the most basic truth: buy good companies, at reasonable prices, hold long-term;
They have truly lived out the teachings of Buffett and Duan Yongping in their daily lives:
Circle of competence, don't do what you don't understand, don't borrow money, don't short, maintain equanimity.
They don't compete with the market; instead, they befriend time and good businesses.
——Such people are extremely rare.
I am now working hard to become one of them.

The vast majority die as the first type,
Many remain stuck in the second type for a lifetime,
Those who truly made substantial money and sleep soundly are almost all in the third type.

**1. Don't Understand the Rules**
Dancing to emotions, flowing with trends.
They are the market's primary "fuel."

**2. Know Some Rules But Refuse to Follow Them**
They've seen the "right method," know it can lead to wealth with high probability,
But feel it's too slow, too difficult, too "boring."
So they pin their hopes on their own "clever wits" to catch one big opportunity.
Most "technical traders" and "market timing experts" actually fall into this category.

**3. Truly Understand and Respect the Rules**
They are extremely picky about targets, extremely disciplined;
They treat buying stocks as buying companies, anchoring prices near intrinsic value;
They go all-in within their circle of competence, absolutely won't touch anything outside it;
They're not in a rush to prove themselves, willing to let time and compounding do the proving.
They are the market's ultimate "harvesters," and also the quietest group.

The first type provides liquidity,
The second type provides volatility and narratives,
The third type takes away the vast majority of profits.

I spent 13 years taking detours on the path from 1→2→3.
From having hundreds of millions in assets down to needing to drive for Didi.
Fortunately, now I'm in the third type.

The greatest truth is the simplest.

Where are you currently positioned?
More importantly——where do you plan to stop?