Do you feel anxious about your investments all day long? You panic when prices fall, and you panic when they rise. Why? Most likely because you do not really know what you bought and what you are holding.
You need to settle one question at a fundamental level: what is real investing? In Duan Yongping’s words, buying a stock is buying a company, and buying a company is buying the present value of its future cash flows.
What does that mean? When you buy shares in a company, you are investing in that company. You are a shareholder. What you bought is that company’s future: if the company earns money in the future, you earn money. It really is that simple.
An example. Suppose you spend $1 million to buy a restaurant. What you care about is how many customers it serves each day and roughly how much it earns each year — not whether someone might offer you $1.2 million for it tomorrow. Investing works the same way. Within your circle of competence, find one or two genuinely good companies, buy them when the price is cheap, hold them for the long run, and let patience do the work.
Stop trying to make money from the market, from trading, or from luck. Make money from good businesses, from patience, and from an even temper. That is what real investing is.