The most painful thing in the market now is not the loss of money itself, but the sudden disappearance of the world from operating according to one's own understanding. -You thought good companies would continue to rise, but the valuation collapsed first. -You thought good performance meant safety, but the market says' good news is not enough '. -You thought a certain topic was already too expensive, but it continued to rise. -You thought a callback was just noise, but it turned into a state transition. -You thought you were studying the truth, but later realized that you had just fallen in love with an old narrative. This is the deepest discomfort in investment, we crave certainty, but the world only gives probability; We crave linear returns, but reality is a jumping process; We desire an even distribution, but wealth comes from a very small number of power-law events. Many people's current discomfort essentially comes from three mismatches 1. The cognitive update speed cannot keep up with the changes in the world's state. -What you used to think was a good business model may be being re priced by new technologies. -What you used to think of as cyclical products may be becoming a structural bottleneck. -What you used to think of as stable compound interest assets may lose interface control. -The overvalued foam you thought in the past may actually be a posteriori rise in the final state. -What you used to think was cheap may actually be a value trap after the object is downgraded. This will be very painful. 2. The speed of event dissemination accelerates and narrative jumps The speed of information dissemination is too fast. Financial reports, news, social media, options ETF、 Quantification, AI summarization, institutional positions, and thematic funds can create resonance in a very short period of time So the market is becoming less and less like a slowly flowing river, more and more like a network composed of multiple jumping points. -When you first understand a topic, it may have already been priced. -You initially suspect a risk that may have already exploded in the price. -You thought the sharp decline had ended, and another risk node was triggered. This will make people lose their sense of time. I always feel like I'm half slow. 3. Power law results make ordinary efforts appear ineffective -Many people work hard, but their portfolio returns are pulled apart by a few missed opportunities. -Many people also tried their best to avoid danger, but a left tail that was not dealt with in a timely manner destroyed the whole year. -Many people conduct comprehensive research, but the capital market only rewards the strongest main line. This can create a deep sense of frustration: "I'm not lazy or stupid, why is the result still like this The answer is not that you are not working hard enough, but that you are facing a power-law world. In the power-law world, effort must serve key variables rather than being spread out evenly. In fact, you don't need to be a prophet, you need to be a renewable person. If the market causes you pain, you must first allow yourself to suffer. Because investment is not a purely rational game. It constantly challenges people's self-esteem, memory, identity, patience, and sense of security. -When you make the wrong purchase, you will doubt your judgment. -When you sell flying, you will doubt your courage. When you miss it, you will doubt your fate. -When you suffer continuous losses, you will doubt whether you are still suitable for this game. But from the perspectives of Bayesian, Poisson, and power-law, these pains have new explanations. -Buying wrong is not a failure of personality, but a priori falsification. -Selling is not foolish, it is the path and position design that needs to be updated. -Missing out is not a punishment of fate, it's because the right tail recognition mechanism is not sensitive enough. -Waiting is not incompetence, but a legitimate state under the Poisson process. -Losing money may not necessarily be your fault, but it could also be due to mismatched odds, paths, and time windows. This is not a self comforting escape, but a more precise attribution. So, the primary idea of investment is not secondary conclusions such as "buying a good company," "looking for low valuations," "following trends," or "looking at financial reports. At a deeper level are three mathematical worldviews: -Bayesian thought: The world is not predicted, but constantly updated. -Poisson process: Major opportunities and risks do not come uniformly, but randomly jump in. -Power law distribution: The truth of the market is not egalitarianism, but rather that a few states determine the vast majority of outcomes. These three things together are the profound essence of investment: do not try to see through the future all at once, but build a system that can survive, update, and approach the truth in uncertainty, jumps, and extreme distributions. --Translated from the Beauty of Bayes