18. Project analysis really isn’t what you need to learn…

The reason to learn anything is so that you can “make use of it”. But the problem is that some skill take a lot of time and discipline to develop. So what about when you can’t wait? If a skill takes a lot of time and discipline to develop, of course the correct conclusion is not to “just not learn it”. The correct conclusion is this:

Learn, but don’t be in a rush to use it. Wait until you’ve learned enough to make use of it…

However, there are always some skills that you can “immediately put into practice”. People who are good at learning are actually just good at distinguishing this attribute of skills. They can judge what needs to be developed slowly through discipline, and what can be learned quickly and used right away.

Leeks who research “project analysis ability” when they are still just copying things mechanically are exactly like the “small town girls researching fashion” that Qian Zhongshu wrote about. They spend time and energy, but the result is that their imitation looks absurd.

Don’t do this. This is a skill that you have to slowly observe, slowly figure out, constantly reflect on, and even constantly negate yourself until you finally get it. Because of this, you must not use it indiscriminately, and you must not use it right away. You must patiently develop it with self-discipline — for at least three years.

So what do you need to learn that you can use right away?

The most important thing would have been: “don’t do anything after you enter the market, and only buy after watching for one year”, because if you had done this then you would already be “smarter”… But there’s no chance to use this, because you are like the vast majority of people and have already “been cut”.

Well… at least you’ve got me! Let me tell you a second thing, which you can use right away, and you still have time to learn and use:

Only buy the two or three targets with the highest trading volume.

This is a kind of wisdom. Temporarily let go of your own intelligence, and believe in the intelligence of the whole market. The market has helped you choose, so why don’t you follow along?

This is really hard to understand and hard to do. On the one hand you need to constantly improve and constantly study, or at least prevent yourself from becoming stupid. But on the other hand you also must temporarily let go of your own wisdom… it’s quite a contradiction, isn’t it?!

Maybe this is why people often incorrectly surmise that “investing is an activity that runs against human nature”?

Actually this is not a contradiction at all, and in fact it is in no way against human nature:

Since at the beginning your wisdom is lacking, you should temporarily let it go, and let it develop of to the side. What’s wrong with this? Setting aside your own intelligence doesn’t mean that intelligence is nowhere to be found! The market has intelligence, and the market is often smarter. Do you really not believe it? Once you have developed your intelligence to a certain level, you will understand…

So doing this is not “against human nature”. To the contrary, it’s just that in fact your past self hadn’t developed your learning habits and methods. In the past you always thought that things had to be fully learned before using them. You didn’t know that there were really things in this world that can be immediately put into practice, and that doing so was truly the best choice.

I will tell you a story, and we will see if it is inspiring.

Once upon a time in the Shanghai Stock Exchange, there was a force that people called “the Daily Limit Suicide Squad”. Their method was quite simple: if they saw a stock that was about to rise to its daily limit, they would buy; if it reached its daily limit on the second day, they would sell at market open on the third day; if it hadn’t reached its daily limit by market close on the second day, they would sell before the market close. Just that simple. This group operated for more than ten years, and incredibly they took tens of thousands and turned it in to who knows how much…

They are very frank, saying, "We didn't really read any books, we're stupid! So we just didn't think about it, since we couldn't understand it in any case. Whenever a stock was about to reach its trading limit, it meant that the market had done the thinking for us, and we just took action!"

Of course you shouldn’t just copy it, but from this example you can see how they avoided becoming leeks. They had a stop-loss strategy, and they had a profit-taking strategy, but, more importantly, they had the wisdom and courage to let go of their own wisdom…

There is another law that supports temporarily letting go of your own intelligence:

In trading markets, that which rapidly rises will rise even more rapidly, and that which rapidly falls will fall even more rapidly… so,

• When everything is rising, you must choose the one that is rising the most rapidly, because the odds say, or the market is teaching you, that it is more likely to rise;

• When everything is falling, you must choose the one that is falling the least, because the odds say, or the market is teaching you, that it is most resistant to falling…

Maybe you will think, “Aren’t you teaching me to speculate!” Don’t worry, you will reach your own conclusions sooner or later. It’s just that in the earliest stages you don’t have enough intelligence, so you must temporarily let go of using your intelligence (not “let go of training your intelligence”).

Observe the “leeks” and you will see how sensible you are. Their “intelligence” jumps around with the %K line, following whether or not their “bet” is doubling… When the price of the coin goes up they are arrogant and bossy, and when the price of the coin goes down they are like a dog who has lost its family. Do you want to be like them? Yes, I think I heard someone far away screaming, “NO!”