The biggest risk in investing is not having a large position, but placing heavy bets in areas without cognitive advantages. The companies with the greatest cognitive advantages that are truly worth investing in are often those that the market has temporarily misjudged. After reading a very good article, I re understood it myself and rewrote it. This question has been bothering me for a long time, until I finally figured it out after several recent operations. I want to keep up with my cognitive advantages and focus on which stocks have cognitive advantages. I believe many people have experienced that stocks bought with light positions have skyrocketed, while stocks bought with heavy positions are barely alive. In terms of position, buying a 10% light position would only have a 10% impact on the total position, even if it were to double. However, if a stock with a heavy position falls by 10%, all profits will be lost. The research is both positive and optimistic, but it is often the most regrettable that the research results are not ultimately turned into profits. Why? Because your research is only superficial and not sufficient to support the confidence of holding heavy positions, you are often the most bullish on stocks with heavy positions, but it also means that others in the market are equally bullish. There is no expected difference, the pricing is already very reasonable, and there is no excess return. The size of the profit is not only determined by research ability, it is useless to bet even if you are optimistic. The ultimate benefit is the research ability x position size. If you look at a stock the same way, buying 2% and buying 20% will ultimately result in two completely different outcomes: being heavily invested without anyone interested and being heavily invested with a lot of attention. Not every transaction is equally important in trading. When it comes to winning over the world's top investors, it is often a very small number of transactions that truly determine returns. Buffett's Apple, Coca Cola, Soros shorted the pound, Duan Yongping's Maotai, NetEase. Remove these few transactions, the returns are average. Buffett himself has also said that life only requires a few truly correct big decisions. Duan Yongping once said that he has punched 10 holes in his life, but he hasn't used them up yet. Bubble Mart is his latest hole punched. Investing is not about making money on average from 100 trades, one or two big wins are enough to cover up countless small mistakes. But the problem arises, and many people have researched enough and invested heavily. Finally, on the most familiar platforms such as Tesla and Microsoft. As a result, after a year, the index did not even outperform, and instead missed the entire bull market. Research shows that those who are optimistic have not placed heavy bets. They know it's good, but they always find it expensive, and the more they rise, the more afraid they are to get in the car. Why? Because the biggest misconception among retail investors is that this is what I have the most confidence in, and holding it for a long time is what gives me the most advantage. Watch news, research reports, and follow KOLs every day. It will create a familiar feeling that I understand very well, and then place a heavy emphasis. But do you really have an advantage? Or is it just the longest, most familiar, and most sensory experience? These three things will build confidence, but not create an advantage. There is no such thing as liking or disliking in investment, everything needs to be quantified. What we need to focus on is whether the market can read it wrong? My understanding of the market exceeds the market's recognition and expectations? Only when the market is wrong can there be excess returns. The whole world already knows that Nvidia is great, but the fact that it is great itself is not worth it. But in 4 years, if you truly trust Nvidia to say why, it has a cognitive advantage. So what is truly valuable is that you understand something earlier than the market, which is called cognitive advantage. The safety margin that many people understand is to look for cheap undervalued stocks, or stocks that used to be expensive but have now dropped significantly. I think the safety margin is the stocks that you have researched the most deeply or the market has made outrageous mistakes in. Company A's PE is 10 times, and the market is estimated to grow by 5%. You also estimate 5%; B Company's PE is 40 times, and the market is estimated to grow by 20%. After your research, you believe it is 40%. This is why most people would choose A, which is more stable, but institutions are more interested in B because B has a larger expectation gap. In the era of AI, the advantage of information asymmetry has gradually been erased, but the big money in the market often comes not from information, but from interpretation ability and foresight. In the same financial report, some people see a 20% increase in capital expenditures, while others see that AI demand is still accelerating. Information is the same, interpretation is completely different. Only by leading the market can there be profits. How to determine if you have an advantage? It's simple: when the financial report comes out, the market thinks it's ordinary, but you judge that it's actually beyond expectations, and afterwards the market really goes up. That's your advantage. The advantage is not that you think you understand, but that the market often proves you right later on. If you look at Duan Yongping's holdings, you will know that he has many positions that were not heavily invested from the beginning. CRCL's position is only 0.1%, at best only an observation position, while Pinduoduo gradually increased from his position of less than 1% to a 10% heavy position, which is one of the top 5 positions. Understanding the business model increases by 2%, data verification increases by 5%, and financial report confirmation increases by 3%, gradually confirming to a heavy position. The more you understand, the heavier the move. Many people, on the other hand, often do the same thing myself. In the end, the reflection is that the research is not thorough enough and the understanding is not sufficient. When buying, I was very optimistic. A 20% increase in profits was too fast, but suddenly it was already almost there. It was a bit expensive, so I sold first and then took it back later. As a result, it kept selling and rising, and in the end, I watched helplessly as it increased several times. That's also why many people can grab ten times the stock, but never make ten times the profit. There is never a shortage of good companies in the market. All seven giants are good companies, but just knowing one company is good cannot earn excess returns. The real difference lies not only in research ability, but also in whether you can convert cognitive advantages into positions.