Part One: Regular Investing

Investing is not easy, and successful investing is even harder. But just because something isn't easy doesn't mean there isn't a simple, direct, brutal and effective strategy that almost everyone can correctly master and deploy.

1.1 The Strategy and Results

Regular investing is quite simple:

Regularly invest a set amount in a particular investment over a long period of time.

For example, every week (regularly) for the next five to ten years (a long period of time) invest 200 USD (a set amount) in BOX (a particular investment). Of course, you could change BOX to any investment that is worth investing in and holding over a long period of time, such as shares in Apple, Maotai, Coca-Cola, or an S&P 500 Index Fund.

Is such a simple strategy really effective? The numbers don't lie.

Suppose you started investing in the S&P 500 on October 8th, 2007. Knowing what we know now, that seems to be the worst time to enter the market, because what immediately followed was the 2008 financial crisis, and it was that day that the stock market began to crash. So if you started investing $1,000 USD per week on that day...

What would the result be? Back on October 8th, 2007, it would be really hard to say. But looking at it from today, more than a decade later, the answer is clear: the results were fantastic! We experienced a crash in the market from $1,561 to a low of $683, but we kept buying at that low price. Later, the market recovered, and by October of 2019 the S&P 500 had exceeded $2,960.

But this description is missing an important detail. The chart below shows the value of your total assets (the red line) and the value of your total investment (the blue line).

There is an extended period of time when your asset value drops below your total investments. But towards the end of 2009 the red line passes the blue line, and it almost never drops below it again, growing faster over time.

Note: The historical data in this chart is from Yahoo Finance (^GSPC), and the chart was created in Google Sheets; you can view the data and chart here.

The key point is that you entered the market at the worst time –- on October 8th, 2007, the S&P 500 was at $1,561, and it didn't return to this price until March 25th, 2013.

But if you take another look at the chart above, you'll see that the red line crosses the blue line for the first time in 2009. So while it took the S&P 500 286 weeks to return to its high, your strategy of regular investing began to see steadily positive returns after just 111 weeks. When you started to see positive returns, the S&P 500 was still 30% off its all-time high. When the S&P 500 finally returned to its high after 286 weeks, your strategy was already showing returns of 32.64%.

Let's take a look at an even more striking example. Suppose you started regularly investing in Bitcoin in December of 2017, when Bitcoin was at its all-time high of $19,800. Shortly afterwards, the price crashed, and it still hasn't returned to its all-time high. The chart below assumes you started regularly investing in Bitcoin on December 11th, 2017, and kept it up for 87 weeks.

Note: The historical data in this chart is from Yahoo Finance (Bitcoin USD), and the chart was created in Google Sheets; you can view the data and chart here.

Even though you entered the market at the worst time, your investment has still been profitable in USD terms, with the red line (your assets in USD terms) passing the blue line (your total investment in USD terms) on May 6th, 2019. If you invested $100 each week, by the 87th week you would have invested $8,700, but your Bitcoin would have been worth $16,417, for a gain of 88.71%. This is despite the fact that Bitcoin remained 62.85% of its all-time high, which was when you started investing.

This can seem really flabbergasting at first:

With regular investing, even if you start at what seems like the worst time, such as just before a market crash, your overall investment will become profitable before the market recovers.

Some fans of regular investing always emphasize a partially correct fact, which is that regular investing will effectively reduce your average cost. But the other side of the coin is that it also probably raises your average cost. It's obvious, isn't it? So these fans are using an incorrect reason to choose the correct strategy. But how long can an operating system with an error at the base level continue to run for?

The reason why regular investing is effective is that it matches up with the following reality of markets:

Bear markets are much longer than bull markets.

For example, over the last one thousand days, the blockchain markets have had less than 150 days of a true bull market. The same phenomenon is true no matter which price chart you are looking at, whether it be the S&P 500, Apple, Google, Amazon, Facebook, Tencent, or Alibaba. Bear markets are always very long, and bull markets are always very short. Bull markets are so short that we call them bubbles, like the dotcom bubble at the end of the last century.

Once you understand this key point, you will understand the following;

With regular investing, your profits essentially all come from the bear market!

Most investors don't understand this, and it is the core reason why their investments are destined to fail. They want to make money quickly in the ephemeral bull market. It's really quite depressing: most of the "investors" who enter the market during a bull market are destined to lose their shirts, because before they realize it, the short bull market has ended, and the long bear market has begun. Regular investors, on the other hand, are slowly accumulating throughout the bear market.

In fact, the strategy of regular investing is not only applicable to trading markets, it's useful in almost all important areas of life, whether it be study, work or family. "Lifelong learning" is essentially a regular investing strategy, isn't it? If you could draw a "price curve" for an individual's learning, it would look a lot like the S&P 500. Even though it increases substantially over time, it goes through long periods of flat growth or even drops. Often when you are investing time in learning something it feels like you would be better off not learning it. The "bear market" is long, isn't it? This explains why so few people are able to become true lifelong learners. The reason is the same: everyone wants to make money quickly in the bull market and then leave.

Jeff Bezos once asked Warren Buffett, "Your investment thesis is so simple... Why doesn't everyone just copy you?" Buffett's reply was quite striking:

Because nobody wants to get rich slow.

The most important part of Buffett's strategy is to hold for the long term. He has said that "Our favorite holding period is forever." At its core, the reason why regular investing works is that it is the ideal version of a long-term holding strategy. Most of the time, even Buffett doesn't just buy a target all at once; he enters his position over time. Those who follow the regular investing strategy also continue to buy at regular intervals over the long term, and hold the asset throughout the process.

1.2 How Long Is "Long-term"?

The core of the regular investing strategy is long-term holding. It's well recognized that the longer you hold the more likely you are to make a profit, but there is a key question we have to answer if we are to have a deeper discussion:

How long is "long-term"?

If we don't have an accurate answer to this question, we can't even really use the concept of "long-term". For any concept to be useful it must be clearly defined, and since we must combine concepts together, if we have multiple unclear concepts then the accuracy of our judgment will be severely impacted, just as multiplying 80% by itself five times will leave us with less than 33%. In the course of reading this book, you will encounter several concepts that must be used together, and they must be clearly and accurately defined in order to be useful.

Unlike most people, I have a fairly clear, accurate and useful definition of long-term:

Long-term means longer than two full market cycles.

A clear and accurate definition of "long-term" thus depends on a clear and accurate definition of another concept: "market cycle". So what's a full market cycle? Let's use bitcoin's historical price chart as an example.

A full market cycle is composed of a period of falling price (Period B) and a period of rising price (Period A). In this chart we can see a full market cycle, with Period B beginning in December of 2013, when prices started falling, and Period A ending in December of 2017, when bitcoin reached its historical high.

How can you tell when a market cycle begins? Actually, we can only make this determination after the fact. Since short-term prices can rise and fall unpredictably, it's impossible to know when a high or low point for a given period has been reached. It's hard to know how long after the fact it will be before we can make the determination, but we can be sure that it will be long enough that it will not be useful for short-term trading decisions.

On the same chart, I have marked the three full market cycles that I have personally experienced with bitcoin. The first started around June 8th, 2011, at a price of $32, and ended on April 11th, 2013, at a price of $266; the second started at the end of the first and ended on December 19th, 2013, at a price of $1,280; the third started at the end of the second and ended on December 17th, 2017, at a price of $19,800. Actually, I have experienced more cycles than this, since I entered the bitcoin market two months before the June 2011 high of $32, and I have continued and will continue to hold Bitcoin since the December 2017 historical high of $19,800.

There are several details in this chart that are worth looking at closely. For example, we can clearly see that, as I mentioned earlier, bear markets are much, much longer than bull markets.

Why do we need to emphasize at least two market cycles? Because many people misunderstand trends. They see that today's price is higher than yesterday's, and that yesterday's price was higher than the day before, and they think they have identified an "upward trend". They then erroneously assume that tomorrow's price will be higher than today's. But it's actually impossible to judge a trend in the short term, even over the course of one entire cycle.

Only after two full cycles can we make an accurate judgment about whether a trend is more likely to be upward or downward.

Furthermore, please note the use of "more likely to be" in the sentence above. Even after two full cycles, we still cannot be 100% sure about the future trend based on historical data. At this point in time (October 2019), bitcoin's price has still not returned to its historical high, and we cannot be 100% sure that Bitcoin will ever exceed its historical high. We will only be able to make this determination after the fact –- long after the fact. In the end, from any point in time, we can only make investment decisions based on less than 100% certainty. Since the future is full of risk and unknown factors, we can only use terms such as "more likely". Actually, this is precisely why investing is so interesting.

In the chart above, we can barely see the high reached in June of 2011. But if we separate each historical high into separate charts, we see that they look strikingly similar.

Each of these charts looks quite similar to the overall historical chart, which is to say that even as I am in the midst of my fourth full cycle, and even though I have made similar judgments based on "more likely" before, I still can't be completely sure this time. I still can only use "more likely" as the basis for my judgment. It's just that I've been quite lucky in that my previous three judgments based on "more likely" were proven to be correct.

Let's briefly summarize what we have discussed thus far:

• a period of rising or falling prices does not necessarily constitute a trend –- it's impossible to determine a trend over the short term;
• a period of falling prices (Period B) followed by a period of rising prices (Period A) constitutes a full cycle;
• we can take each historical high as the starting point for Period B of a full cycle;
• we can only determine the historical high of a period after the fact;
• it takes at least two full cycles to determine a trend;
• the best we can do is determine that a trend is more likely;
• an upward trend often results in a new historical high, but we can only determine the highest price of a cycle after the fact;
• long-term holding refers to holding for at least two full cycles, or through two bear markets and two bull markets.

If we use this upgraded way of thinking to look at any price chart, we will get a completely different result than before. Below is the price chart for the S&P 500 from 1956 to 2019:

Note: The historical data in this chart is from Yahoo Finance (^GSPC), and the chart was created in Google Sheets; you can view the data and chart here.

There's an easy way to understand how economic cycles are shaped:

Economic cycles are shaped by participants in the economy coordinating well at some times and poorly at others.

When many parties -– and "many" here refers to so many that some parties don't even know of the existence of others -– are communicating more and more efficiently, the length of cycles will become shorter and shorter, even if fluctuations, which occur when parties are not coordinating well, may never be completely eliminated.

If we look at it from this perspective, we can easily understand why the Great Depression of the 1930s took so long to recover from (i.e., complete the cycle), yet the recovery from the Asian Financial Crisis of the 1990s only took a few years, and the recovery from the worldwide recession brought about by the US subprime crisis was even faster.

The reason is simple and easily understood:

The rapid flow of information makes worldwide cooperation easier and more seamless, so even though crises will continue to occur, recoveries are becoming more rapid.

This is also why blockchain assets see shorter fluctuation cycles. Over the past eight years I've often heard people use the halving of bitcoin's block reward every four years as a way to distinguish bitcoin's cycles. Maybe that was useful early on, but, now that Bitcoin is no longer the only valuable blockchain asset, using the block reward halving as a basis for determining cycles has slowly lost significance.

I think the reason why blockchain asset markets have shorter cycles than stock markets is due to the fact that the players in the market are clearly coordinating more efficiently. We can see this just by looking at the number of trading markets. There are only a few influential stock markets, but there are thousands of markets on which to trade blockchain assets, and trading continues 24 hours a day, 365 days a year. This type of coordination greatly exceeds the coordination of traditional securities markets.

It is truly great news:

Cycles are getting shorter and shorter.

Cycles in stock markets have already shrunk from decades to less than a decade, and they continue to shrink. Blockchain market cycles are already shorter, and they are also shrinking.

In my view, long-term doesn't mean forever, but is a clearly defined concept of two or more full market cycles. In the stock market, two full market cycles will take about ten to fifteen years; in the blockchain market, two full market cycles will take six to eight years. Either way, they are both futures worth waiting on, right?

1.3 Why to Use Money to Make Money

For most people, money only has one use: consumption. Sadly, this is the basic reason why most people are unable to achieve financial independence. They have almost never seriously thought about money's second and much more important use: investment.

For those who only know how to consume and don't understand investment, it's hard to escape their original fate. They can only make money by selling their time, and the amount of time that they can sell is extremely limited –- we have much less time than we think.

There is a set of data that can help us understand how little time we actually have to sell. If we take an average lifespan of 78 years...

• We sleep for 28.3 years;
• We work for only 10.5 years (this is the time that most people are able to sell);
• We spend 9 years watching TV, playing video games, and using social networks;
• We spend 6 years doing chores;
• We spend 4 years eating and drinking;
• We only spend 3.5 years on education;
• We spend 2.5 years grooming;
• We spend 2.5 years shopping;
• We spend 1.5 years on child care;
• We spend 1.3 years commuting.

According to these estimates, we only have nine years left to allocate as we please! The amount of time we have to sell is our work time of 10.5 years plus the nine years we spend on leisure. Even if we allocate all of those 9 years to paid work, we still haven't even doubled the time we have to sell. And we still sleep for longer than the time we have available to sell. Sleep is expensive!

When I was young, I worked very hard just like everyone else.

Upon graduating from college I started working in sales, and there were weeks in which I spent six nights sleeping on a train. I'd get off the train in the morning, find a place to shower and change clothes, spend the day running sales trainings, and then hop back on a train at night to head to the next city, where I'd start all over again.

People who have known me for a long time know that I don't have holidays. This is because, shortly after I graduated from college in 1995, I realized that there are so many holidays! In China, out of 365 days in the year, there are 115 legal holidays (including weekends)! That means we spend a third of the year resting! Something didn't seem right. Later I realized that "legal" holidays are established to limit corporations. If a corporation forces someone to work on a holiday without extra pay, it's illegal, but there's no limit on what an individual can do. There's no law at all that says, "today is a legal holiday, so if you don't rest you're breaking the law!" So, from that point on, I decided that I would have nothing to do with legal holidays. It's been 24 years since 1995, and I have done my best to ignore weekends and holidays. I just do what I want to each day! I've published a lot of books, and most of them have been written by myself over the Chinese New Year while everyone else was on vacation. I've worked very hard, haven't I?

About ten years ago, I suddenly realized what a waste of time it was to worry about hairstyles. Everybody spends a couple of hours to get their hair cut each time, and they often end up waiting for a long time at the barber. So I decided that I would cut my own hair. A good Phillips trimmer only costs about $50, and you can use it for many years. So I've had the same hairstyle for the last decade -- a three millimeter buzzcut. It's easy to just use the trimmer every few days for a few minutes before I shower. Can you see how hard I work to save time?

The numbers, however, are rather disappointing. By not having a holiday in 24 years, how much time have I freed up to sell? Even if I don't rest on holidays, I'm only likely to have four hours of effective work every day. If you've worked for yourself, you know that the amount of truly effective work time you can have in one day is quite limited. So how much effective work time have I created by having no holidays over the past 24 years?

24 x 115 x 4 = 11,040

Just over 10,000 hours. So how many years is that?

11,040 ÷ (365 x 24) = 1.26

You see? I've been so hard on myself, and all for what? All for merely 14% more time than other people who work very hard but still take holidays. And what about the decision I made 10 years ago to cut my own hair? How much time have I saved with that? If you cut your hair once a month, and it takes 1.5 hours, that's 18 hours per year. Over ten years, that's 180 hours. You see? I took such good care of my time and was so hard on myself, but I only saved 7.5 days! All that effort, and I only end up with 0.228% more time than everybody else!

Frank H. Knight, one of the most influential economists of the 20th century, has a famous postulation:

Ownership of personal or material productive capacity is based upon a complex mixture of inheritance, luck, and effort, probably in that order of relative importance.

Of course, this doesn't mean that effort isn't important. Some measure of success can be achieved through effort, but huge success depends on luck, and we all know that we can't control luck (or inheritance!). The problem, as we have seen, is that we have a limited amount of time that we can sell, so effort is of the least relative importance.

However, it's different if we use money to make money. The core of investing is using money to make money, and money doesn't rest –- as long as you make the right investment, it works for you 24 hours a day, 365 days a year. How can your sweat and tears compete with that?

The reason we admire Warren Buffett so much is due to the following fact:

Warren Buffett was born in 1930 and bought his first stock when he was 11. It's now 2019, so he has been investing for 78 years!

78 years! The average person only lives 78 years, and they only have an extra nine years to allocate. But Buffett's money has already been working hard for him 24 hours a day, 365 days a year, for 78 years!

It's not hard to understand what a huge difference investing can make.

1.4 What Can We Use to Regularly Invest?

It's an undeniable fact that most people don't invest. And they have an answer as to why they don't invest:

I don't have any money to invest!

This is a frustratingly common misunderstanding. In fact, in addition to investing money, we have another resource that we can invest -- time.

It's not just non-investors who forget this. Even the few who do invest don't realize that, in addition to money, their time is also an investible asset. They haven't thought about how important time is, and how strong an influence it has over us.

Warren Buffett is undoubtably the most commonly-researched investor in the world, and you'll find his name in most books on investment, this one included. There's no way around it, as most of what he says is correct, and, perhaps more importantly, he's been so successful that most of what he says on the topic must be correct, and most people can't help but agree with him.

Buffett is not just successful, he's also always very open in sharing his thoughts and ideas. The problem is, he's told us everything that we need to do, so why can't we just go do it? Even though the difference between knowing and doing is the difference between monkeys and humans, there is a yet more important reason:

Warren Buffett has a zero cost of capital!

Berkshire Hathaway's key turning point in its early years came in 1967, when it bought National Indemnity Company and entered the insurance industry. Remember, Berkshire was a textile company that Buffett took control of in a fit of anger, and he regretted getting into the textile industry for many years. It wasn't until 1985 that Berkshire finally exited the textile business, nearly 20 years after Buffett took control in 1964.

But after entering the insurance market in 1967, Berkshire became an investing machine. The reason was simple: Buffett not only had a huge amount to invest, the funds also came at zero cost, and they could be used almost indefinitely. This was a huge relative advantage over all other investors in the world.

Books about Buffett talk about his incredible returns, and they treat his investment principles as the Bible. Even a casual statement at Berkshire's annual meeting can be taken as law. But 99.99% of investors will never have access to massive amounts of free capital to invest over an unlimited term, and that's a big reason why Buffett has been extraodinarily successful.

Regular investors are different. They may not have that much money, but they are investing more than just money. Since they are continuously investing over the long term,

they are also using time to invest.

The reason I have been able to hold bitcoin and other blockchain assets over the long term is not, as many people think, because I have "faith". In fact, faith doesn't require logic, and can't depend on logic, because if it did depend on logic, all faith would be shaken in the end.

The core reason I have been able to hold these assets is that I have the ability to continuously make money over the long term outside of the market, because I have upgraded my personal business model.

The vast majority of people can only sell their time once, but, after upgrading, I can sell my time multiple times. For instance, by writing books or teaching online.

Even though there is a ceiling on this business model, it has allowed me to not be tied down by daily expenses. It also allows me to always have money to use for investment that, despite being limited in amount, has no cost, is constantly flowing in, and can be invested over an unlimited term. Without this, all of my achievements in the investment space would have been impossible. So my regular investment into blockchain assets is not just money, but all of the effective time that I have spent working, and the sustainable income that has come from repeatedly selling this time.

So regular investing is something that people with ambition but limited resources can do, and it is something that only this type of person can do. When Buffett purchased a controlling stake in Berkshire Hathaway, he was already not a poor man. After purchasing National Indemnity Company and entering the insurance industry, almost all of his investments were long-term buy-and-hold investments. Buffett didn't need a strategy of regular investing. Or, to put it more precisely, he didn't need to improve upon his buy-and-hold strategy. The simplest strategy in the world was already enough for him.

As for other fund managers, they are even less able to pursue a regular investing strategy, primarily because 99.99% of fund managers (or, everyone except Buffett) have a limited term for their capital. For some it may be ten years, for others it may be three to five years, but no matter how long it is it's still a limit, and that entails great risk. In the investment world it's rare to have a middle ground -- it's either a 1 or a 0. If capital has a term the risk is 1, if it doesn't the risk is 0, and there is no 0.2 or 0.8. Lots of people don't understand this, so they line up like lemmings to take risks and end up falling off a cliff. The riskiest job in the world is President of South Korea, and right after that is the fund manager who guarantees immediate redemption of capital.

To put it another way, most "professional investors" don't have the ability to do regular investing, because they are not managing their own money, and their funds have a deadline after which they need to be returned. Once it's time to settle the funds, it doesn't matter if it's a bull market or a bear market, it's still time to settle, so how can you be sure of your earnings? Most people have never thought about how a fund's success is not dependent on the manager's acumen and strategy but instead dependent on the time the fund was established. Funds that are established at the end of Period B and the beginning of Period A are quite likely to succeed, because during that period you can make money investing in almost anything. The problem is that is the time at which investors are the most scared and circumspect, so it's hard to raise money. The easiest time to raise money is at the end of Period A, when everyone has gone crazy in the bull market. But if they raise money at that time, and the money has a term, it's going to be very difficult to succeed.

Selling one bit of your time more than once is an upgrade of your personal business model. It's such an important upgrade that it is hard for anyone to free themselves from the shackles of increasing daily expenses without it. At first you only have to take care of yourself; then you have to take care of your spouse; then you have to take care of your children and even your parents. Most people are defeated by these basic life expenses. An individual must make enough money to cover these expenses, which first increase and then may level out or even decrease later in life, before they can have money left over to practice regular investing. If you don't upgrade your personal business model, it's hard to have any money left over.

As I see it, regular investing requires a trifecta of successful personal business model upgrades:

• from selling your time once to selling the same time multiple times;
• from only using money to consume to using money to make money (starting to invest);
• from just investing money to also investing time.

Even more importantly, a strategy of regular investing systematically reduces risk.

1.5 The Strategy of Regular Investing Does Not Need to Be Further Improved

We're always trying to find ways to improve our strategies. Everyone wants the strategies that they use to be as good as possible. When it comes to regular investing, though,

any efforts to improve the strategy of regular investing are futile.

From the establishment of the BOX Regular Investing Practice Group in late July of 2019, to October 9th, 2019, 3261 members have joined. After understanding the essence of the regular investing strategy, the group members know that most of the profit from regular investing comes from the long bear market. Because they have a different way of thinking, they now have a completely opposite take on the same world. Each time the price drops, they don't feel disappointment and fear, they feel happy, and even excited, because they can buy more at a cheaper price. Their decisions are the opposite of the outside world.

Below is the historical price of BOX over the past few months:

The chart below adds the daily amount of newly-circulating BOX, which is the amount invested in BOX each day. To make the chart easier to read, the amount of newly-circulating BOX has been divided by 100,000:

Note 1: The charts were created with Google Sheets, and you can view the charts and data here.

Note 2: The amount of newly-circulating BOX on September 2nd, 2019, was 221,010, but it really shouldn't count, because I alone bought 180,621 BOX on that day. I'm an old hand at regular investing, so of course I don't pay attention to daily fluctuations in price.

We can see that each time there is a large drop in price the amount of newly-circulating BOX greatly increases. The clearest example is found on the three days from September 25th to September 27th, which saw newly-circulating BOX of 214,048, 114,240, and 114,505, respectively, with September 25th showing an increase of five times the normal amount!

It's also clear from this data that people's reactions are late, because the drop in price actually happened several days earlier on September 22nd, when the price dropped from $1.68 to $1.41. As we can see in the chart, the increase in the amount of new BOX purchased always came days after the drop in price.

Furthermore, the group members had listened to my classes, in which I repeatedly emphasized the following:

Any efforts to improve the strategy of regular investing are futile.

Yet many of them still couldn't resist being driven by this simple thought: wouldn't it be better if I bought a little more when the price drops?

Let's discuss why this "improvement" to the strategy of regular investing isn't actually an improvement at all. First of all, each time we use the current price as a reason for making a decision, we are always actually making the decision after the fact. Even more importantly, we are neglecting an important fact: the short-term direction of the price after we make our decision is an independent event, and not tied to the prior change in price. After we buy, the price could go up, go down, or stay the same -- we don't know!

Someone who increased their investment amount in July after a price drop would have discovered in September that their "improvement" to the strategy was useless and actually cost them money, because the increased investment in July actually ended up increasing their average cost.

Whether or not an investor has a clear grasp of statistical probability is the factor that has the greatest influence on the accuracy of their decisions. Sadly, too many people don't pay enough attention to this basic knowledge, and they have no idea that this lack of knowledge causes them so much trouble and grief.

A person who understands statistical probability couldn't help but laugh at the following phenomenon:

Some people, lacking basic knowledge of statistical probability, try their best to prove on which day of the week prices are lowest.

Someone made a chart, and did some programming in Python, to support the following conclusion:

After analyzing every 350-day period of weekly regular investing in bitcoin over the 900-day period from July 17th, 2010, to January 2nd, 2013, the following conclusions have been reached:

Investing on Monday performed 1.2% better than the average of the other days. Furthermore, it is best to avoid Sunday, as Sunday performed 0.8% worse than average, perhaps because people have more time on Sunday, or perhaps because they feel more optimistic on Sunday.

Are these sorts of conclusions meaningful? It's basically impossible to use logic to convince people who don't understand the independence of random events, but in an article written in 1984, Warren Buffett gave a fun and yet deep example that might help:

I would like you to imagine a national coin-flipping contest. Let’s assume we get 225 million Americans up tomorrow morning and we ask them all to wager a dollar. They go out in the morning at sunrise, and they all call the flip of a coin. If they call correctly, they win a dollar from those who called wrong. Each day the losers drop out, and on the subsequent day the stakes build as all previous winnings are put on the line. After ten flips on ten mornings, there will be approximately 220,000 people in the United States who have correctly called ten flips in a row. They each will have won a little over $1,000.

Now this group will probably start getting a little puffed up about this, human nature being what it is. They may try to be modest, but at cocktail parties they will occasionally admit to attractive members of the opposite sex what their technique is, and what marvelous insights they bring to the field of flipping.

Assuming that the winners are getting the appropriate rewards from the losers, in another ten days we will have 215 people who have successfully called their coin flips 20 times in a row and who, by this exercise, each have turned one dollar into a little over $1 million. $225 million would have been lost, $225 million would have been won.

By then, this group will really lose their heads. They will probably write books on “How I turned a Dollar into a Million in Twenty Days Working Thirty Seconds a Morning.” Worse yet, they’ll probably start jetting around the country attending seminars on efficient coin-flipping and tackling skeptical professors with, “If it can’t be done, why are there 215 of us?”

In addition to not fitting our basic understanding of statistical probability, another reason why "invest on Monday and not Sunday" is unlikely to work is the following:

If it is really effective, then everybody will start doing it, and then it will no longer be effective.