On October 29, 2025, the Shanghai Composite Index closed above 4000 points for the first time in many years.

Long-time readers of my articles know that I expressed my expectations for the A-shares early last year:

I hoped that the Shanghai Composite Index would reach 4000 points by the end of December this year. However, merely reaching 4000 points is not very significant; it would be best to surpass 6000 points. But if we can't even reach 4000 points, then let's pray together.

Today's article serves as a response to that expectation I had since last year, and it is also an explanation to myself and my readers—my first expectation has been realized.

One important reason I care so much about A-shares is that there are not many investment and financial management options available in RMB domestically. With the real estate market already sluggish, the only option that offers good liquidity, flexibility, and room for maneuver is A-shares.

Of course, some investors might say that one can also invest in overseas index funds using RMB. I have tried that before, but I found that these funds occasionally stop selling. I don't know if it's due to foreign exchange controls and quotas? So, I gradually lost interest in these funds.

So, after comparing various options, if one wants to achieve returns from RMB investments in the current environment, A-shares are an unavoidable topic.

However, our country's stock market is a very special market, and making money in this market requires some unconventional thinking and a strong will to resist the "herd effect."

What does "unconventional thinking" mean?

It means that the movements of A-shares are influenced by many factors; in addition to pure market factors, there are also non-market factors. Therefore, when judging the trends of A-shares and the stocks within them, one must consider many complex factors.

Among these factors, many people find market factors easy to understand and judge, but non-market factors are not so straightforward.

In fact, I believe that non-market factors are not too difficult to judge because they cannot deviate from common sense and basic principles.

Many times, what tests a person more is: when the results you deduce using common sense and principles surprise even you, do you dare to believe in your own conclusions? Do you dare to trust common sense and principles?

What is the will that can strongly resist the "herd effect"?

It is the courage to stick to your own opinion when everyone around you holds the opposite view, mocks you, ridicules you, or even despises you. Do you dare to believe that you are right while everyone else is wrong?

For example: Everyone around you says, "Can you still invest in A-shares? Are you crazy?"

At this moment, do you dare to take a little money that you can afford to lose and try it out for yourself? Even if it's just out of curiosity to understand why it seems impossible to make money? Or to further question whether there are ways to make money?

Another example: Everyone around you says, "A-shares are really strong now, what did you buy?"

At this moment, can you calmly think: didn't they previously say that A-shares couldn't make money? How come they are now saying A-shares are strong? Can this strength really help me make money?

Yet another example: Over the years, we have seen from many sources that despite the widespread belief online and among people around us that A-shares cannot make money, there are still some people who have made money from A-shares in the long term. Making money in the short term can rely on luck, but making money in the long term definitely does not rely on luck.

At this point, have you taken the time to seriously study why these people can make money? And then compare why so many others cannot make money in A-shares? What is the difference between these two groups of people? What experiences and lessons can I learn from this?

I believe that many of these experiences and lessons are not only applicable to A-shares but also to other securities markets and investment markets.

Many people compare A-shares with U.S. stocks, leading to the conclusion that U.S. stocks are easier to invest in.

I think this feeling is likely to be elusive or not withstand scrutiny. Historically, U.S. stocks also experienced a bear market lasting over a decade in the 1970s. During such a bear market, many retail investors were in despair and exited the market; at that time, they would not have thought that U.S. stocks were easy to invest in.

However, Mr. Buffett has always been optimistic about U.S. stocks. The fundamental reason is that he believes that as long as the U.S. continues to have a good market economy and legal system, the future of U.S. stocks will certainly have hope.

Among many Chinese investors who believe U.S. stocks are easier to invest in, how many hold this belief because of faith or a similar belief driven by underlying principles?

I suspect that many investors think U.S. stocks are easier to invest in because the bull market over the past decade has given them a sense of an "eternal bull market," rather than having a deep-seated belief and logic like Mr. Buffett.

For example, many investors now shout, "I firmly believe that American technology will lead the world, so I am investing in the Nasdaq index."

If that is the case, then at the beginning of this year, when DeepSeek emerged and caused a significant pullback in U.S. stocks, and the whole internet was cheering that "China's AI is catching up with the U.S.," did these originally "firm believers" still think that American technology would lead the world and that this pullback was actually a better opportunity to increase their positions?

Do they really have a complete framework or very fundamental logic deep down to believe that the emergence of DeepSeek will not shake the leading position of American technology, thus continuing to invest in the Nasdaq without hesitation?

This deep-seated distinction will differentiate ordinary investors from great investors at critical moments, determining who can profit in the long term in the investment market and who is destined to follow the crowd or rely on luck, ultimately losing money through their own lack of skill.

Today, when sharing about A-shares, my main purpose is not to discuss whether A-shares are worth investing in for every reader, but to share what I believe are important ways of thinking and underlying logic in investing.

If investors do not have their own way of thinking and investment logic, the final result can only be following the crowd, echoing others, and gaining nothing—whether in A-shares, U.S. stocks, or the crypto market, it is all the same.

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