13. Who’s really cutting whose leeks in the end…

Trading entails risk.

Laws are a lot of fun: if the issuer of a traded item fails to notify the public of the risk involved, they are quite likely to be determined to have committed the crime of fraud. But actually there is absolutely no need to make this kind of notification! Because all trading has risk, and traders should understand this before entering the market!

Regrettably, “leeks” are just that impulsive, and they rush into the market without reading, without thinking, and without learning. The reason that they rush into the market and “buy, buy, buy” is very simple: “Other people have already earned money!” It’s really not easy to protect “leeks”.

It’s the kind leeks who start to research “value investing” once they’re “stuck”, because they at least “silently take responsibility for the losses brought about by their mistaken decisions”, and they hope to improve their lot through “learning”.

More extreme “leeks” are actually more common, and they usually want to “defend their rights”! Once again, they want to “demand a explanation”, an explanation that makes them feel good.

In July of 2018, Lei Jun’s Xiaomi went public in Hong Kong, and that day it dropped below its listing price. Lots of secondary market investors “bought at a high price” and were “stuck”, and lots of them became so called “cut leeks”. So, tell me, is Lei Jun the one who “cut the leeks”?

In this situation, those who thought that they were leeks who had been cut by Lei Jun because they were stuck really have muddled thinking, so much so that they absolutely shouldn’t enter the trading markets, not just because of their muddled thinking, but because they have absolutely no ability to take responsibility for their own decisions and behavior. Ability is not something that you have just because you say you have it, right?

Facebook, a company that today has one of the highest market caps in the world, also fell below it’s listing price. So I ask:

If someone who bought Facebook shares before it dropped below its listing price didn’t sell but held until today, did they make money? Did they make money?!

Obviously, these people were not “cut leeks”, and they didn’t depend on “cutting leeks” to make money. Right?!

If you observe carefully, you will see this truth:

Often, so-called “leeks” are not cut by others; it is more common for them to cut themselves!

We can break their mistake down into three parts:

• First, they are unable to distinguish between value and price, and they make a mistaken buying decision;
• Next, they still can’t distinguish between value and price, so the make a mistaken selling decision;
• Finally, they still can’t distinguish between value and price, but they have no self awareness, so they think that others have cheated them and that they are “cut leeks”…

Above we are discussing the trading of good assets. Does the market have bad assets? (Note that I say “bad” and not “not good”, as there is a large distinction between these two and they should not be confused.) Of course! Not only are there bad assets in the market, there is also a lot of fraud. Malicious market manipulation, improper insider trading, corrupt transfer of benefits… countless types of fraud. In real trading markets (such as stock markets), laws and regulation have been refined over so many years, and the malicious behavior mentioned above has never been eradicated. The law lags behind, but bad people are forever making progress… And the blockchain world? In a world where the laws are less refined and more behind, of course there are more bad assets and fraud!

To take it a step further, those who take advantage of the cognitive deficit of “leeks” to entice them to “buy high”, and then think of ways to make them “castrate themselves” are absolutely bad people! Even if the law hasn’t yet caught up, they are definitely bad people. What is this a little bit similar to? Sometimes on the street you see people who intentionally cover up all or part of their license plate (have you seen those who wipe mud on their license plate so that two or three characters are covered?). These are “definitely bad people”. Why? Because this person is thinking about how to avoid responsibility before they have even been caught… So, these are “definitely bad people”.

But honestly, you haven’t seen the even more ruthless “leeks”!

They know that they’ve “been cut”, so they decide to persist until they can “cut others”. If someone uncovers the truth during this process, and obstructs “their opportunity to cut leeks”, then they will fight with them at all costs.

If you’re interested, you can search online for the “Nanjing Qianbaowang” incident. A bunch of so-called “investors” clearly knew they were participating in a Ponzi scheme, but this is what they thought:

If Xianbaowang went under before they themselves exited, then weren’t they the helpless victims?

So Qianbaowang couldn’t go under before they found the next group of victims! Now you see how scary “leeks” can be, right?