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Making money is essentially a game of money. 01 Brothers, have you ever felt this kind of frustration? Waking up early and staying up late every day, squeezing into the subway, burning the midnight oil, getting scolded by the boss, being challenged by clients, and at the end of the month, after paying rent and deducting expenses for food and daily needs, your pockets are emptier than your face is clean. You scrimp and save, not even daring to buy a cup of milk tea, but when you look at housing prices, you still feel like you won’t be able to afford a home even in your next life. But on the other hand, some people seem to do nothing, drinking tea, chatting, playing golf every day, yet money seems to run into their pockets as if it had legs. You can’t figure it out: why? The answer is actually very simple: making money has never been about hard work; making money is essentially a game of money. Money is never "earned"; it’s "taken." Don’t misunderstand, this doesn’t mean committing crimes. Here, "taking" refers to the possession and allocation rights of resources. Why did ancient emperors have money? Because "all under heaven belongs to the king," the entire land and population were theirs, and they could collect taxes at will, enough to support the imperial palace. This was the most primitive monopoly. Why did ancient dynasties hold tightly to salt and iron monopolies? Because everyone needed salt, and iron was essential for farming. If you monopolize these two, you control pricing power. You set the price, and that’s not just making money; that’s printing money. So, from ancient times to today, the core logic of making money hasn’t changed: whoever controls scarce resources controls the distribution of wealth. No matter how well you farm, even if one acre produces a thousand jin, the grain price is set by the market, by those who hoard grain. Your hard work for a year can’t compare to their profit from hoarding and selling. This is the power of capital. What is the essence of capital? It’s money that generates money, the power to mobilize resources, monopolize channels, and set rules. In 2026, the society’s "salt and iron monopoly" has changed its disguise; it’s called "platforms" and "systems." Many think that driving for a ride-hailing service means working for yourself, but actually, you’re working for the platform. The platform monopolizes customers and sets commission rules; the more you run, the more the platform earns. Many think opening a store on an e-commerce platform means entrepreneurship, but it’s not. You’re paying rent to the platform. Traffic fees, promotion fees, commissions—layer upon layer of fees—at the end of the year, you find that the bulk of your profits go to the platform. The platform is the "salt and iron merchant" of this new era. It builds a system, and everyone who wants to make money in this system must first pay a toll. This is systemic monopoly, even harsher than ancient salt and iron, because it’s everywhere, penetrating every corner of your life. 02 So, are ordinary people just destined to be exploited? Actually, no. The key is to learn to use "leverage." Archimedes said, "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world." Making money is the same; you have to find your leverage. What is leverage? Labor is leverage, capital is leverage, code is leverage, and traffic is even more leverage. For example, if you run a small restaurant, cooking and serving yourself, you work hard all day to serve only dozens of people—that’s a sole proprietorship, no leverage. But if you run a franchise chain, letting others invest money and effort to open stores, collecting franchise fees and management fees, you’re using other people’s money and labor to make money—that’s leverage. Or if you write code and develop software, the cost for one user is high, but for a hundred million users, the cost remains almost the same; marginal cost is nearly zero—that’s leverage. Or traffic, which is the biggest leverage today. If you have an account with millions of followers, posting an ad can equal an ordinary person’s annual salary. Why? Because you amplify your influence millions of times through traffic leverage. This is the power of IP. You, your name, your face, your opinions—once you form an IP, it becomes an asset that can be infinitely replicated and amplified. But leverage isn’t something everyone can use. You need "background," or in other words, you need a "ticket to enter." In ancient times, to become an official, you needed family background and recommendations. It was hard for poor families to produce talented children because educational and social resources were monopolized by aristocratic families. Today is the same; to play with capital leverage, you need initial accumulation. To play with traffic leverage, you need content creation ability or capital to invest in traffic. An ordinary person without background, resources, or capital who tries to get something for nothing is most likely to be trapped. So, the money game divides people into classes from birth. Some are born in Rome, with several houses at home, collecting rent enough for a lifetime of struggle. Some are born in the mud, with their family selling everything to support their education. You work hard to get into a top university, but after graduation, you find your finish line is someone else’s starting point. You earn 10,000 a month, but after rent and living expenses, only 3,000 remains. So, hard work in front of capital is sometimes a joke. 03 Does that mean ordinary people have no chance? They can only lie flat? Of course not. Although this game is unfair, it’s still a "game." Games have rules, and rules have loopholes, so there’s a chance to break through. So recognize reality; don’t numb yourself with "hard work." No matter how hard you deliver food, you can’t beat the algorithm. No matter how hard you do manual labor, you won’t become a billionaire. You have to stop and think about what cards you hold and what leverage you can use. If you have nothing, at least you have time and attention. If you spend your time scrolling short videos, you’re just platform traffic, someone else’s leverage. If you spend your time learning a skill, writing an article, or making a video, you’re accumulating leverage for yourself. You also need a "productivity" mindset. What is productivity? It’s how much value you can create. If you create 10,000 worth of value a month, and your boss pays you 5,000, he earns 5,000. If you want to earn more, either improve your ability to create value—create 100,000 worth of value a month, and your boss pays you 50,000—or you break away from the boss and create value directly in the market, keeping all the money yourself. The best are those who can organize a team and build a system that runs automatically, and you just take a cut. This is the leap from "worker" to "system builder." Ultimately, the money game is about cognition. If you don’t understand it, you’re just played by the rules. If you do, you can use the rules or even change them. In ancient times, there was a saying: "scholars, farmers, artisans, and merchants," with merchants ranked last. Why? Because rulers knew merchants were too smart; they played the money game and turned others’ money into their own. So they suppressed them. But did they succeed? No. Look at those great merchants—Lu Buwei, Shen Wansan, Hu Xueyan—weren’t they all fabulously wealthy? What did they rely on? Their understanding of the money game. Today, it’s the same for you. You can choose to keep working for a fixed salary and live a stable life. Or you can choose to understand this game, build your own system, leverage, and amplify your productivity. There’s no right or wrong, only choice. Don’t think of making money as too noble, nor too dirty. It’s just a game—a game about resources, power, and cognition. In the end, this game is about cognition. If you don’t get it, you’re just played by the rules. Most people can’t build a system in their lifetime. Starting a company requires people, money, and luck, and the failure rate is high. But there is one thing ordinary people can do today. If you can’t beat the platform, become a shareholder of the platform. What’s inside the S&P 500 and Nasdaq 100? The companies you use every day, the platforms that take commissions, the systems that set rules. Buying an index fund means owning a small piece of these systems; the code is just a formality. They work for you. While you’re at work, these companies are making money, setting prices, collecting rent globally. Profits flow back into the index, and the index flows back into your account. This path requires no background, no connections, and you can start with just a few hundred dollars. You don’t need to judge which company will win. The index does the elimination—bad companies drop out, good companies get added. It’s not exciting, nor fast. But it’s one of the few leverages ordinary people can buy, and it’s leverage on your side. The game continues. You can choose not to play, but as long as you live in this society, you’re already in the game. Rather than passively taking hits, study the rules. Even if you only have a bad hand, find a way to play it well. Because in this game, no one will pay for your life except yourself.

Why do I recommend US stocks instead of A-shares!! The index rose 18%, but retail investors lost an average of 23.6% In 2025, the Shanghai Composite Index rose 18.41%, and the CSI 300 rose 17.66%. In the same year, the average return for A-share retail investors was -23.6%, with an average loss of 21,000 yuan per person. The index is rising, but accounts are losing money — both things are true at the same time. Let's talk about the people first. The overall profit ratio for retail investors is 18.9%, and the loss ratio is 81.1%. Breaking down the data for you guys makes it clearer. Accounts under 10,000 yuan, profit 0.1%, one out of a thousand. Capital between 10,000 and 100,000 yuan, profit 1.3%. Capital between 100,000 and 500,000 yuan, profit 15%. Capital over 500,000 yuan, profit 58.6%. Capital over 1 million yuan, profit exceeds 90%. All people with less than 500,000 yuan combined, 4.72% profit. My personal view is that this is not a matter of skill. Similar people, in a different market, would have completely different ratios. 01) This is a pool where the water is drained faster than it is replenished. In the first half of 2026, major shareholders reduced holdings by 489.4 billion yuan, already exceeding the entire 2025. From April to May, over 500 companies disclosed reduction plans, with a proposed reduction cap exceeding 100 billion yuan. Dividends during the same period were 924.5 billion yuan, indeed more than the reductions. So you can't say this market only drains without replenishing. But the rhythm is uneven: dividends are once a year, reductions can be announced anytime, often chosen at high stock prices. 02) Regarding dividends, short-term holding results in losses. Dividends require ex-rights adjustment; stock price is adjusted down by the dividend amount, so market value decreases while cash increases — essentially a one-in-one-out. But if holding is less than one month, dividend tax is 20%; between one month and one year, 10%; over one year, exempt. For the same dividend, those holding for over a year get the full amount, while short-term holders lose 20%. This rule is in the Finance and Taxation [2015] No. 101 document, intended to encourage long-term holding. 03) Costs are charged per transaction, returns are annualized. People with monthly turnover rates over 300% pay 6% to 8% of their returns in transaction costs annually. Commissions plus stamp duty per trade are not much alone, but add up to more than many people's annualized returns. Given this environment, the only variables you can control are what to buy and how long to hold. The data supports this. Holding for over a year, profit probability is 41.2%. Three to six months, 18.7%. Less than one month, 9.3%. In a market charging per transaction, trying to win by increasing frequency is the wrong direction from the start. My own approach is simple. Don't touch what you don't understand, no leverage, no full positions in one stock, calmly hold US stock index funds, and hold long-term if the buying rationale stands, unless it's emergency money needed.

100 Iron Rules for Making Money Summarized by the Top 10 Richest People, Every Sentence Full of Experience. 1. Jack Ma 1. Today is cruel, tomorrow is even crueler, the day after tomorrow is beautiful, but most people die tomorrow night. The place where you fall is just one night away from dawn. 2. You should still have dreams, what if they come true. 3. Being deceived is not because others are too cunning, but because you are too greedy. 4. Others can copy my model, but cannot copy my hardships. 5. I have never touched money, I am not interested in money. When money is not the goal, it will flow to you. 6. Free is the most expensive thing in the world. 7. Do not carry hatred in competition; hatred will surely lead to failure. 8. Customers first, employees second, shareholders third. 9. If you read many books but don’t know how to summarize from them, you just have a pile of waste paper. 10. Never compare luck with others. I never thought I was luckier than others; maybe I have more perseverance. When they can’t endure the hardest times, I can endure one or two more seconds. 2. Pony Ma 11. When a giant falls, its body temperature is still warm. 12. In the internet era, competition results are often decided within a few months. 13. When making products, think like a novice user, not like a professional. 14. If you feel nothing has changed in one or two years, you are in danger. 15. Resources are limited; you must focus. 16. Don’t try to please everyone; just make a small group very satisfied. 17. When you are slightly better than others, they envy you; when you are much better, they only look up to you. 18. Entrepreneurship is discovering a huge problem and then solving it. 19. Information is the source of power. The more you know, the more choices you have. 20. Excessive responsibility can crush a person; let go when it’s time. 3. Wang Jianlin 21. Forget Tsinghua and Peking University; courage is more important. 22. Set a small goal first: earn 100 million. 23. Even if the Yellow River is tough, I will build a bridge and cross it. 24. Being big is not skill; standing firm and going far is skill. 25. Wealth comes from taking risks; dare to venture and act to succeed. 26. Tsinghua and Peking University are less important than courage, but courage is less important than carefulness. 27. The core of entrepreneurial spirit is innovation and risk-taking. 28. To succeed, you must have faster reaction speed than others. 29. Don’t fear failure; fear is not being able to stand up after failing. 30. Running a business means constantly solving problems; problems are normal. 4. Zong Qinghou 31. I think entrepreneurs need these qualities: poet’s imagination, scientist’s acuity, philosopher’s mind, strategist’s skill. 32. There is no weak market, only weak products. 33. Entrepreneurs must not only know how to make money but also how to save money. 34. Running a business is a marathon, not a 100-meter sprint. 35. I have done only one thing in my life: making a bottle of water to perfection. 36. Don’t follow others just because they make money; see what you can do. 37. Brands are built, not bragged about. 38. If a company doesn’t innovate, death is near. 39. Management is managing people; managing people is managing hearts. 40. Hard work and endurance are basic skills; without them, nothing can be achieved. 5. Zhong Shanshan 41. A good product doesn’t need flashy marketing. 42. Running a business is not for investors but for consumers. 43. I don’t like to join the crowd; I like to do what others don’t want to do. 44. The value of a brand is the sum of consumer trust. 45. Slow is fast; less is more. 46. The core of business operation is the product; the core of the product is quality. 47. Don’t chase trends; when the trend passes, those chasing it fall. 48. A truly good business is one consumers can’t live without once they use it. 49. Entrepreneurs must endure loneliness and resist temptation. 50. If you do one thing to the extreme, the market will naturally come to you. 6. Huang Zheng 51. Consumption upgrade is not about Shanghai people living like Parisians, but about people in Anqing, Anhui having kitchen paper. 52. Cheap doesn’t mean low quality; cheap means reducing costs and benefiting consumers. 53. The essence of business is letting people get a good deal. 54. Don’t compare intelligence with others; compare who can better satisfy users. 55. Being honest means doing what you should and not taking advantage of others. 56. Entrepreneurship is jumping off a cliff and assembling a plane on the way down. 57. Business competition ultimately is competition of efficiency. 58. You don’t need to do everything; just do the most important things. 59. User needs are always simpler than you imagine. 60. Don’t try to educate users; adapt to their habits. 7. Zhang Yiming 61. Delayed gratification means you’ve won half of your life. 62. Don’t try to please everyone; just make a small group very satisfied. 63. Entrepreneurship is discovering a huge problem and solving it. The bigger the problem you solve, the more money you make. 64. Excessive responsibility can crush a person; let go when it’s time. 65. Information is the source of power. The more you know, the more choices you have. 66. When you are much better than others, they only look up to you. 67. When making products, think like a novice user. 68. Resources are limited; you must focus. 69. If you feel nothing has changed in one or two years, you are in danger. 70. Delayed gratification is not about not enjoying, but saving the best for last. 8. Lei Jun 71. Standing at the wind’s mouth, even pigs can fly. 72. Take life and death lightly; if you don’t accept it, fight. 73. The best investment is investing in yourself. 74. After enduring the despair valley, you become invincible. 75. No success comes without risk. Face risks head-on and go all out. 76. Finding people is not three visits to the thatched cottage, but thirty visits. 77. Don’t cover strategic laziness with tactical diligence. 78. Focus, excellence, reputation, speed—these seven words are my internet mantra. 79. You don’t need to compare with others; just be better than yourself yesterday. 80. Making products requires craftsmanship spirit; perfect every detail. 9. Li Ka-shing 81. If you want an ordinary life, you will face ordinary setbacks. If you want the best life, you will face the strongest hurts. 82. When you put aside pride to make money, it means you have grown up. 83. Clear thinking is far more important than hard work. 84. The hardest time is the closest to success. 85. Don’t miss the last penny. 86. Always leave room; don’t do things absolutely. 87. Building a personal brand is the greatest asset. 88. Stay low-key, don’t show off or brag. 89. Learning to spend money is more important than learning to make money. 90. Integrity is the greatest wealth. 10. Liu Qiangdong 91. Quality is the lifeline of e-commerce. 92. User experience is the core competitiveness of business. 93. Logistics is the last mile of e-commerce and the most critical mile. 94. Don’t compare prices with others; compare value. 95. The success of any business model ultimately comes down to cost and efficiency. 96. If you treat users well, users will treat you well. 97. The most important thing in entrepreneurship is the team; the most important thing in the team is trust. 98. Hard work is a basic skill; without it, nothing can be achieved. 99. Don’t make money just for money; make money to create value. 100. As long as what you do is right, persist, and you will surely win.

Buying stocks means letting the best people in the world work for you, brothers. When you look at a company from the perspective of a shareholder, stocks are truly magical. For those companies where your resume is ignored, you just need to buy their stocks, and all their employees will work for you. Look at those state-owned and central enterprises, where masters and PhDs compete fiercely to get in. But you don’t need to take written tests, interviews, or use connections. You only need to spend tens of thousands, or even just a few thousand or hundreds of yuan to buy their stocks, and you become their shareholder. They work inside, leaving early and returning late every day, attending meetings and working overtime to generate profits for you. You just lie at home. The harder they work, the more the company earns, and the more dividends you get. You don’t have to worry about the boss’s mood, clocking in, or layoffs—you are the boss behind the scenes. Someone asks, is it really that simple? Yes, it’s that simple. But there is one premise: you have to buy in when it’s cheap. Then hold long-term, that’s all! There are roughly four types of people in the market. 1. True investors, who walk with the company long-term, waiting for value creation. 2. Arbitrageurs, who correct market pricing errors. In Graham’s words, they buy from pessimists and sell to optimists. 3. Mainly speculators, guessing at what price others will buy or sell a security, caring neither about the security’s intrinsic value nor value creation. 4. Brokers and market makers, providing services to other participants. Most people don’t purely belong to one category but have elements of all four. Index investing, in a sense, is an average of these elements. Value investors focus on correctly identifying prices and waiting for value creation over time. Benjamin Graham leaned more toward arbitrage; Before buying See’s Candy/insurance/Coca-Cola, Buffett was like Graham, mainly an arbitrage investor. After meeting Munger, he focused on value creation but still bought at arbitrage prices. Personally, I think Duan Yongping, after realizing the filter “business model > corporate culture > valuation,” is a very pure "true investor"—buying truly great companies at reasonable prices. Using sell put and sell call arbitrage. When buying Vanke, TCL, and Changhong, Duan Yongping also showed Graham’s style. Munger leans toward "true investor"—buying truly great companies at reasonable prices (disliking buying average companies just because they’re cheap), but Munger is not an entrepreneur by background; he has an intellectual temperament and likes to make his own judgments. Li Lu leans toward Buffett, but he places more weight on "low valuation" than on "good business models." Li Lu himself says it relates to his personality and is hard to change, but later he could hold on even when great companies surged, still valuing price when buying. Also, Li Lu inherited Munger’s tendency to make judgments—a "flaw." Li Lu and Munger are intellectuals and have an impulse to show off by trying to be right? Additionally, Buffett and Duan Yongping are entrepreneurs and pragmatists; they spent a long time running businesses and know many things are hard to analyze clearly, so they tend to take what they see as what they get, making the business model their first priority. Duan Yongping says the margin of safety refers to "your level of understanding of the company." This means you really have to understand it. Of course, for companies with good business models, you have a higher chance of understanding them very well through effort. For companies with poor business models, it’s hard to understand them easily (to see what they’ll look like in 10 years). "Understanding what Moutai will look like in 10 years" is much easier than "understanding what BYD will look like in 10 years." Li Lu says the future is essentially unpredictable, so you need a margin of safety to minimize downside and maximize upside. This is simply emphasizing valuation under the premise of "acknowledging the world’s unknowability." The difference in understanding margin of safety between Duan Yongping and Li Lu actually comes from their personalities. Duan Yongping grew up in a very secure environment; Li Lu and Buffett lacked childhood security and are more stringent on valuation. One premise is that Duan Yongping’s heavy positions are only in companies with established business models, without forecasting. Of course, Duan Yongping’s filter "business model > corporate culture > valuation" dares to put valuation last because he has very strict requirements for business models. Also, he was involved with Subor and BBK, fighting in the consumer electronics red ocean (game consoles, phones, walkmans, DVDs, music phones, smartphones—all without missing), so his implicit understanding of business is incomparable. Therefore, ordinary people learning value investing should honestly start by building their circle of competence. First understand the boundaries of your competence circle, then slowly expand it. Spend 10 years honestly figuring out the core elements of business, then copy Duan Yongping’s homework. Otherwise, it will be very difficult. Personally, I think learning Buffett’s journey—from picking up cigarette butts to deeply tracking company evolution, and if possible, immersing yourself inside a company for a few years, then learning from Duan Yongping—is better. Actually, the gap between us and Duan Yongping is simply that he did business for more than ten years and was a consultant for OPPO and vivo for over a decade, and I wasn’t! So, if I want to learn from Duan Yongping, I have to make up for this lesson. In the process of making up, the key is to be yourself.

Why are tech stocks still plunging despite such strong AI demand? Because "the industry needs more computing power" and "buying related stocks can make money" are separated by costs, profits, and valuations. On October 14, the Nasdaq Composite Index closed down 1.9%, CoreWeave fell 15.5%. Hotter-than-expected inflation data, combined with market concerns about the financing burden of AI infrastructure, put related stocks under clear pressure. AP News reported. On the other hand, ASML announced Q3 revenue of about €11.7 billion and net profit of about €5 billion. There is still real business happening in the industry chain. ASML financial report. These two things are not contradictory. First, strong customer demand does not mean service providers can necessarily retain enough profit. Selling equipment, renting computing power, building models, selling applications—all belong to the AI industry chain but have completely different business models. For companies that need to continuously purchase chips and build data centers, orders are just the beginning. Equipment investment, electricity costs, utilization rates, depreciation, and financing expenses all determine how much money this business ultimately retains. Revenue can grow rapidly, but cash flow may not improve in sync. Second, high interest rates make "future growth" more expensive. If a company relies on continuous financing to expand, rising costs of new borrowing or refinancing maturing debt can squeeze future returns. At the same time, when investors demand higher returns, they may be unwilling to continue paying the original valuation for the same future profits. Therefore, a stock price drop does not necessarily mean AI is no longer used; it may mean the market is starting to recalculate: Is the price paid now too high for this growth? Third, technology implementation is worth attention, but cooperation announcements cannot be directly equated with profits. LSEG's collaboration with NVIDIA to accelerate historical financial market data analysis using GPUs is a concrete application case. LSEG announcement. What’s more worth asking next is: Are customers willing to pay? How much cost can be saved? How much profit can service providers retain? These questions are more important than simply announcing "AI integration." This is also the focus when I look at this round of financial reports: Is the revenue sustainable? How much continuous investment is needed for growth? Can debt and financing arrangements support expansion? How optimistic are current stock prices already? We cannot declare the AI logic over just because of a single day’s plunge; nor should we think related stocks are worth buying just because we are optimistic about AI. Being optimistic about a technology is the starting point of research. Figuring out who can make money, for how long, and at what price you pay is the real investment question.

US September CPI rose to 3.7%, what should we focus on next? Rather than jumping directly to the conclusion that "US stocks will fall, the dollar will rise," I think it's more important to break down this data first. The overall CPI in September increased by 3.7% year-on-year, higher than August's 3.4%; month-on-month it rose by 0.6%. Excluding food and energy, the core CPI rose from 2.4% to 2.6% year-on-year, with a month-on-month increase of 0.3%. Gasoline prices rose 9.1% month-on-month, contributing to more than half of the overall CPI increase for the month. Data source: US Bureau of Labor Statistics This means energy is a key driver of this inflation rebound, but other price pressures cannot be completely ignored. What the market needs to judge next is how long this price increase will last and whether it will change the interest rate path. If the energy price rise is just a short-term shock and how it continues to transmit to transportation, goods, and service prices, the policy implications are different. One CPI report cannot directly announce the Fed's next decision. Specifically for assets, here is how I see it: US stocks: pay attention to interest rate pressure and also whether companies can make profits. If the data pushes US Treasury yields higher, high-valuation growth stocks usually face greater valuation pressure. But it is also earnings season now; revenue, profit margins, and forward guidance will also affect stock prices. You can't just look at inflation and skip over corporate earnings. US Treasuries: rising yields do not mean the bonds you hold have increased in value. If the market raises expectations for future interest rates, the prices of existing fixed-rate bonds may come under pressure, with long-duration bonds usually more sensitive. "Higher yields" and "existing holders earning more" are two different things. Dollar and gold: don't explain all changes with one direction. Higher US interest rate expectations may support the dollar, but you also have to consider other economies. Gold is influenced simultaneously by the dollar, real interest rates, and safe-haven demand. Rising inflation does not necessarily mean gold must rise; rising rates are also not a guarantee that gold prices will fall. Crude oil: affects inflation and has its own supply and demand logic. This time energy pushed CPI higher, but that doesn't mean oil prices will continue to rise after the CPI release. Supply, demand, and geopolitical situations still need to be watched. For those following BTC, you can't judge short-term direction just by the phrase "inflation hedge." Dollar liquidity, risk appetite, and leverage changes can also affect trends. I am more focused on three signals going forward: whether core inflation continues to strengthen, whether US Treasury yields keep rising, and whether corporate earnings can support current valuations. Data is the basis for updating judgments, not a monthly command to overturn our investment plans.

“A bull market is born of pessimism, grows on skepticism, matures on optimism, and dies of euphoria. The most pessimistic time in the market is the best time to buy, and the most optimistic time is the best time to sell.” — John Templeton This is a sentence I recently read in "Contrarian Investment: Templeton's Long-Term Profit Method." 01) Templeton: The Father of Global Investment + Master of Contrarian Investing Templeton (1912–2008) is hailed as the "Father of Global Investment" and the "First Contrarian Investor," ranked alongside Buffett, Peter Lynch, and Graham as one of the "Top Ten Global Fund Managers of the 20th Century." In 1939, with World War II breaking out and the Great Depression's shadow lingering, the U.S. stock market plunged nearly 50%. At 27, Templeton borrowed $10,000 from his former boss to buy every stock on the New York Stock Exchange priced under $1—a total of 104 stocks. Four years later, that $10,000 grew to $40,000. In 1954, he founded the Templeton Growth Fund, achieving an annualized return of about 14.5% over 38 years (1954–1992), outperforming the market by 3.7% annually. Reflection: While others panicked and fled, he borrowed money to enter the market; he didn’t buy the "best prospects," but 104 "unwanted" stocks. He admitted he didn’t know which would win, so he bought "a basket of overly punished bargains," believing "the whole will eventually revert to the mean." 02) Core Investment Philosophy: Extreme Pessimism Investing "Extreme pessimism" was the core principle throughout Templeton’s 70+ year investment career—buying at the point of greatest pessimism. He said, "The right time to buy is when pessimism is at its worst, because then most problems can be resolved." The underlying logic is: when the market panics to the extreme, investors sell frantically without regard to value, causing stock prices to be systemically undervalued—this is the best buying opportunity. Templeton emphasized, "People always ask me where the best prospects are, but actually, that’s the wrong question. You should ask: where is the most pessimistic place?" Reflection: This is an extremely counterintuitive investment philosophy. Contrarian investing emphasizes opportunities during market pessimism, and Templeton directly sought the most pessimistic places—an extreme form of contrarian investing. We are naturally inclined to focus on "the best prospects" track, but few ask: have those neglected corners that have fallen out of favor been excessively punished by pessimism? But "pessimism" does not equal "cheap," nor does it equal "worth buying"—which leads to the next crucial skill. 03) The Ability to Assess the Severity of Problems In extreme pessimism investing, the most important skill is not finding the worst-fallen or lowest-valued companies, but judging the severity of the company’s problems—are they temporary or permanent? If the problems are temporary, holders sell out of short-term disappointment, making it the best buying point. Like Michael Jordan having a few off games, you wouldn’t kick him off the Bulls for that. A company is a real entity; as long as it can sustain itself and generate profits above its cost of capital for its owners, it will continue to operate. Recognizing this is important. If you hold this view and have confidence in the company’s long-term prospects, buying stocks sold off merely due to poor quarterly earnings becomes easy. Therefore, in extreme pessimism investing, the key is the ability to distinguish which problems are short-term and which are long-term. Reflection: To us, this section is the easiest to overlook yet the most important. "Buying in pessimism" is just the entry ticket; distinguishing whether pessimism is temporary or permanent is the real skill. Many try to buy in pessimism but end up trapped long-term—because they mistake "permanent value destruction" for "temporary emotional overreaction." Is Jordan just off his game today, or is he injured? This relies on fundamental research, not just the phrase "be greedy when others are fearful." 04) Pitfalls to Avoid: Contrarian ≠ Catching a Falling Knife Templeton himself admitted he bought many "cheap but mediocre" stocks that underperformed long-term. His true moat was extreme diversification + very long holding periods. "Extreme pessimism" cannot be confirmed in real-time—after a 50% drop, it might fall another 80%, so buying in batches, diversifying, and combining fundamentals is necessary: buying at low prices those values that can survive and recover, not just "cheap" itself. He warned, "The only person who shouldn’t diversify is the one who always gets it right." Reflection: The market often only talks about his "be greedy when others are fearful" phrase, but rarely about his real safety net: diversification + long holding. Diversification is the lifeline for most. Also, the other half of contrarian investing is never courage alone, but homework.