Recommend a book to help brothers understand the 'underlying logic' of investment Cycle "is a book that talks about the" underlying logic of investment ". Unlike the previously recommended "practical books" such as "Buffett's Moat" and "Index Fund Investment Guide", this book will not teach you how to buy stocks, funds, or cryptocurrencies specifically .. It teaches how to assess the situation and utilize rules to benefit oneself. For example, how economic crises arise, why do people flock to buy "not so good" stocks, why birth rates affect the economic situation, and why there is always a big drop after a big rise. During the process of reading this book, I was poked in the nose many times and felt sore. Surprisingly, a book about investment showed the effectiveness of psychology reading. The author is talking about investment, and what I see is that he is discussing social laws, career choices, and life planning. Share three points that touched me. 🚩 History does not repeat itself, but it always bears striking similarities. History may repeat itself, but details will not repeat themselves. The first half of the sentence is a famous quote by Mark Twain, which everyone has heard of. The latter half of the sentence is crucial. Speaking from a small perspective, only focusing on investment is important. If you lost money on LeEco stocks a few years ago and gained an experience called 'I will never buy LeEco stocks again', this experience is actually of no use. Because there is no identical stock called LeEco that you can buy anymore. However, if you review the incident of "LeEco losing money" and write down your decision-making psychology and the reasons for your misjudgment at that time, what was the reason you decided to buy it, you will at least not fall into Luckin's trap next time. In general, this is the most important law that runs through the entire life. The reason why experience is experience is that the models extracted from past events can guide future actions. I think the so-called 'shortcut to life' is actually finding patterns faster than ordinary people. Why do teachers always make us pay more attention to wrong questions during our student years? In most cases, the original question that you have solved once will not appear again; The reason for studying wrong questions is that people's patterns of making mistakes are extremely similar. If you make a mistake because you haven't figured out a certain concept, you will make the same mistake again because you haven't figured out that concept. Mistakes themselves are not important, analyzing the root cause of mistakes is to extract a model of 'why I made a mistake here'. Many students feel that learning becomes difficult after entering college because they have not distilled enough "thinking and problem-solving models" from their previous learning experiences; I just memorized some knowledge by rote and knew how to solve this problem. When the proportion of knowledge taught by teachers decreases and more time is devoted to self-study, the advantages of students who are good at researching and solving problems on their own become apparent. And this group of students, after leaving school and entering the workforce, will soon stand out in the workplace due to their outstanding problem-solving abilities. That's why 985 and 211 students are more likely to be favored by companies during school recruitment. It is not ruled out that those with good knowledge and skills may not have the ability to work, but HR faces thousands of resumes. In order to maximize the efficiency of the recruitment process, it is obvious that screening schools will be faster. On the surface, it appears to be a screening of 'grades', but in reality, it is a screening of' thinking and problem-solving abilities'. Of course, as the length of work increases, the weight of "education" will become lower and lower. When you work for 3 years or even more, the next company will judge what position and compensation should be given to you based on your performance in the previous company. Those who have learned knowledge well but lack problem-solving skills will be screened out in this round of screening; At the same time, those with low education but strong problem-solving abilities will stand out in this round. As mentioned earlier, this sentence can be narrowly understood as "investment should pay more attention to decision-making factors", broadly defined as "paying more attention to the laws behind doing something", and further understood as "if you can find more universal laws of social development, interpersonal relationships, and wealth operation, you are more likely to succeed". For example, if you see the "amplifier" effect of the Internet - the low cost of communication, you can greatly increase the efficiency of "selling time to make money". If you find this pattern, your wealth growth rate will be much faster. You used to be a teacher, but now you can face thousands of people at the same time while giving lectures, which is the knowledge payment dividend; Previously, you could only sell to customers who came to your store, but now you can sell to people from all over the country and even the world. This is the e-commerce dividend; In the past, you contributed to newspapers and magazines for very little. Writing on the Internet can gain millions of attention, which is the new media dividend. Of course, 'seeing patterns' is one aspect, and there are many factors to consider such as risks and policies. But I think we should not stop moving forward because of the existence of risks and 'give up eating because of choking'. Knowing the risk and doing a good job of hedging, just keep it within your own acceptable range. Those who are afraid of this and that every day, those who are saturated tomorrow after the dividend period has passed, those who are timid all day, and those who stay at home and don't do anything are the most comfortable. There's nothing wrong with being content with whatever comes your way. The key is to achieve a balance between body and mind, and not to be unwilling and hesitant to take action. 🚩 2. Economic forecasting is basically useless for investment, so it is necessary to study the cycle. In fact, if you have tried any form of investment, you will find that many people are seeking to "predict future fluctuations", and there are also some "masters" telling everyone how to predict the future. Then the former will pay for the latter. So those 'investment masters' did not become rich because they predicted correctly, but because the' prediction cycle 'catered to the needs of some people and charged them fees to become rich. The author believes that predicting the future is very absurd: Some investors know they don't understand the future, but they must pretend to be able to predict it in their words and actions, because if they don't, they will lose their jobs and clients, Some investors have always relied on predictions to make money. Over time, they brainwash their clients too many times, and as a result, they brainwash themselves, even believing that their predictions for the future may be correct. (Seeing this, I burst out laughing) Why study cycles? Because history is similar... (returning to the first point) 🚩 3. The cycle should not only be seen as one event following another, but also as one event triggering the next In fact, people who have some understanding of economics are more or less familiar with 'cycles'. Even if you don't understand, you have heard of a widely circulated saying like 'Life and wealth depend on Kangbo'. Before reading this book, my understanding of 'cycle' was that it is an objective phenomenon. Real estate has cycles, commodities have cycles, and economic crises have cycles. We just need to wait for the arrival of cycles and earn a wave of cycle dividends. After learning more about the cycle, I realized that the focus should be more on the "reasons that affect the rise" and the relationship between these events. In this way, we can roughly infer what chain reactions will occur after something happens. The next time a similar event occurs, it will be easier for us to determine our position in the cycle. Knowing your position in the cycle, you can plan ahead and wait for the rise. That is to say, we need to observe the underlying patterns behind these events and guide investment through analyzing correlations; Instead of "waiting" for the curve to decline and buy when it falls. (The former has a causal relationship, while the latter is static. Please understand the difference between the two.) Encouragement together!