Source: Red and Green As centralized investors, our goal is to have a greater understanding of our companies than any Wall Street investor. If we are willing to work hard and learn as much as possible about our companies, we are likely to know more than general investors, which is all we need to gain a competitive advantage. On the product structure side, the operating income of products worth 10-30 billion yuan is 401/1288/60 million yuan, respectively, in 2023, the overall sales volume of the company reached 18,000 kiloliters, a year-on-year increase of 28.10%, showing significant growth.

Our biggest mistake is not doing what should be done and not buying what should be bought.

"- Charlie Munger"

I. Latest news from famous fund managers II. Oriental Harbor Fund Managers Shortselling Nasdaq-100 ETF III. On Tuesday, Nvidia rose more than 1% to a new high of $2.86 trillion in total market value. Private equity master Dan Bin once again made a fortune with Nvidia. The latest net asset value of Oriental Harbor Marathon Global until May 31 was 7.2533 yuan, with a return of 34.86% this year. IV. However, there seems to be a difference of opinion within Oriental Harbor on investment in Nvidia and Nasdaq. Recently, Dan Bin posted on Weibo, "I saw that out of the eight fund managers at Oriental Harbor, one of them used less than 5% of his position to hold three times the short position of the Nasdaq-100 ETF. I couldn't bear it and discussed it with him. I said be careful! The US stock market is bullish and short-term, suitable for buying!" Dan Bin has also posted, "From start to finish, only I, one of the eight fund managers at Oriental Harbor, held a heavy position in Nvidia!" V. Oriental Harbor's products have previously heavily increased holdings of Nasdaq-100 ETF. According to incomplete statistics from Private Fund Ranking, Oriental Harbor's several products have heavily increased holdings of Nasdaq-100 ETF and Nasdaq Technology ETF, five of which have appeared on the list of the top ten holders of US stock ETFs. VI. Deng Shengjun appointed as the new general manager of Huachen Future Fund II. News summary of fund today IX. Middle Eastern Giants May Buy 10% Stake in China Huaxia Fund X. According to people close to China Huaxia Fund, the Qatar Investment Authority (QIA) intends to purchase a 10% stake in China Huaxia Fund from Primavera Capital. At present, Qatar Investment Authority has reached a preliminary purchase intention with Primavera Capital. Many domestic procedures are still in progress. Only when the CSRC approves it and the change of industrial and commercial registration is completed can the change of equity be officially effective. XI. Public funds' dividends exceeded 66 billion yuan this year. Data from public fund ranking shows that as of May 31, 2023, 125 public fund institutions had distributed dividends for 1654 products, totaling 2122 times and a dividend total of 66.4 billion yuan this year. Compared with the same period last year, public fund dividends have increased across the board, not only in terms of the number of public fund companies and products, but also in terms of the number of dividends and the amount of dividends, with year-on-year increases of 43.38% and 11.87%, respectively. XIII. Bond funds are still the "main force" of dividends. Data shows that as of May 31 this year, bond funds have distributed a total of 1493 dividends, with a total amount of 56.235 billion yuan, accounting for 84.68% of the total amount of dividends. Among bond funds, the dividends are mainly concentrated in medium- to long-term pure bond funds, with a total of 1026 dividends and a dividend amount of 44.011 billion yuan, accounting for 66.27% of the total dividends. In stock funds, dividends are mainly concentrated in passive index funds, with a total of 27 dividends and a dividend amount of 4.846 billion yuan. XIV. Private equity is bullish on investment opportunities in these industries going global. More and more Chinese local companies are accelerating their global market layout, and many private equity firms consider a company's going global as one of their investment research considerations. The results of Private Fund Ranking's survey show that 76.92% of private equity firms believe that going global helps to increase corporate performance; another 15.36% hold a neutral attitude; and 7.69% hold a cautious attitude, believing that global companies have already accumulated a large amount of gains. XV. Regarding investment opportunities in going global industries that they are bullish on, the survey results show that 39.13% of private equity firms are optimistic about the home appliance and home furnishing industry; 30.43% of private equity firms are optimistic about the new third board; 13.04% of private equity firms are optimistic about the electronics industry; 8.70% of private equity firms are optimistic about shipbuilding; 4.35% of private equity firms are optimistic about the petrochemical industry; and another 4.35% of private equity firms choose other industries. XVII. Henan Tiejian Investment's 1 billion yuan fund completes filing XIX. China Shenhua and State Energy Group invest in private equity.

1. Most people are too impatient and worry too much. Success requires a very calm patience, but when opportunities arise, it also requires being sufficiently proactive.

2. Judging risk based on the volatility of stocks is very foolish. We believe there are only two types of risk: one, total loss; two, inadequate returns. Some very good businesses are also highly volatile, like See's confectioners, which usually experiences two quarters of losses in a year. Conversely, some utterly bad companies have very stable business performance.

3. The so-called "earnings before interest and taxes depreciation" is complete nonsense.

4. Buffett sometimes mentions "discounted cash flow", but I have never seen him calculate this. (Buffett replied, "That's right, if value can only be calculated this way, then it's not reliable enough.")

5. If you buy an undervalued stock, you have to wait until the price reaches the intrinsic value you've calculated to sell it, which is difficult to determine. But if you buy a great company, you just sit there and wait.

6. We once bought a textile factory (Berkshire Hathaway) and a savings and loan institution in California (Wesco), both of which later brought disaster. However, at the time of purchase, the prices were lower than the liquidation value.

7. The internet is extremely beneficial for society, but it is a disaster for capitalists. The internet can improve efficiency, but many things improve efficiency while reducing profits. The internet will lead to less profit for American companies, not more.

8. The market's evaluation of every investment expert is consistently above average, regardless of the evidence proving otherwise.

9. Similar to point 5. If you buy a great company, you just sit there and wait.

10. Buffett spends 70 hours a week thinking about investments.

11. People calculate too much and think too little.

12. Whenever you feel that something is destroying your life, that something is yourself. The thought of always feeling like a victim is the most self-defeating weapon.

13. The tax law determines that it's still the most cost-effective to buy a great company and wait for it to take off.

14. If the stocks you buy compound at a return of 15% annually for 30 years, and when you sell it at the end, you pay 35% tax, then your annual return would still be 13.3%. Conversely, if you sell that same stock every year and pay taxes each time, then your annual return drops to only 9.75%. This 3.5% difference over 30 years is staggering (Note from the blogger: After 30 years, the former yields 42.35 times return, while the latter only yields 16.3 times, a difference of 26.05 times).

15. The most important thing is to view stocks as a small ownership of a company and to determine intrinsic value based on the company's competitive advantages. Look for opportunities where the present value of future cash profits exceeds the stock price you pay. This is fundamental; you must understand probabilities—the bet should only be placed when the odds are in your favor.

16. A common reason for people going bankrupt is the inability to control psychological entanglements. You put so much time and money into it, and the more you spend, the easier it becomes to think, "It's almost there, if I just spend a little more, it will work out..." This is how people go bankrupt—because they refuse to stop and think, "What I've invested before can be considered lost; I can take it, and I can recover. I don’t need to be obsessed with this; it could ruin me."

17. Speaking of mistakes I've seen in business throughout my life, an excessive pursuit of tax avoidance is a common cause for doing foolish things. I've seen people make significant mistakes to avoid taxes. Buffett and I may not be drilling for oil, but we pay the taxes we owe, and we’re doing just fine now. If someone tries to sell you a tax avoidance package, don’t buy it.

18. I believe we (the USA) are at or near the peak of our civilization... If 50 or 100 years from now, we (the USA) are only one-third comparable to a certain country in Asia, I wouldn't be surprised at all. If I were to bet, the ones who will do the best in the future are likely to be in Asia.

19. To some extent, stocks are like Rembrandt's paintings. Their prices are based on past transaction prices. Bonds are much more rational. No one expects bond prices to skyrocket. Imagine if all of America’s retirement funds went to buy Rembrandt's oil paintings; they would all appreciate and attract a bunch of followers.

Some believe that what happened in Argentina and japan will absolutely not happen here (usa), and this idea is quite crazy.

Two,

Compared to institutional investors, property/a-reit is more suitable for individual investors. Buffett still holds some of the characteristics of a penny stock investor (referring to his early focus on Graham's style of undervalued investment), which makes him willing to use his own private money to buy some REITs when people dislike them and their market price falls to below 80%. This behavior reminds him of the joy of picking up cigarette butts in the past, so it's quite good for him to dabble in this with some spare cash.

Even smart people can suffer from the disasters brought on by overconfidence. They believe they have stronger abilities and better methods, hence often exhausting themselves on more difficult paths.

'The dealer's advantage' is a very interesting concept in modern finance. Those institutional fund managers look very much like the managers in a casino, only on a larger scale.

In three's, there must be a teacher for me; one must first be a follower before becoming a leader.

We are always learning, correcting, and even overturning various ideas. Rapidly overturning your thoughts at the right moment is an important quality. You must force yourself to consider opposing viewpoints. If you cannot persuade your opponent better than they can persuade you, it indicates that your understanding is not adequate.

In my earlier days, hamburgers were 5 cents each and the minimum wage was 40 cents, so I have witnessed tremendous inflation. But did it destroy the investment environment? I don't think so.

27, most successes in life and career come from intentionally avoiding certain things: premature death, wrong marriages, and so on.

28, there are two types of mistakes: first, doing nothing (ignoring opportunities), which Buffett calls the "finger-licking mistake"; second, when you should buy in bulk, you only purchase a bottle of eye drops.

29, regularly checking against a checklist can prevent mistakes. One should master this basic wisdom. Before referring to the checklist, one should also mentally prepare (referring to maintaining a calm mind); this method is irreplaceable.

30, lawsuits are notoriously time-consuming, labor-intensive, inefficient, and have unpredictable outcomes.

31, an investment that yields 20% return every year for 40 consecutive years only exists in the land of dreams. In the real world, you must seek opportunities, then compare them with other opportunities, and finally invest in the most attractive ones. This is your opportunity cost, which you learned in your first-year economics class. The game has not changed, so the so-called "modern portfolio" theory is very foolish.

32, it’s best to learn profound lessons from the tragic experiences of others rather than your own. Some of our successes were foretold long ago, while some were unexpectedly gained.

33, it is generally considered that the best scenario is sitting in an office and having wonderful investment opportunities presented one after another—until a few years ago, that’s how venture capitalists enjoyed it. But we are completely different—we look everywhere like beggars trying to find good companies to buy. For 20 years, we have invested in at most one or two companies each year…saying we have dug three feet into the ground is not an exaggeration. (Good opportunities) do not have professional salespeople. If you sit there waiting for good opportunities to come, your seat is very dangerous.

34, our biggest mistakes are the things we should have done but didn’t, and the things we should have bought but didn’t.

You will only progress if you learn how to learn.

We have long made an effort to avoid doing foolish things, so our gains are much greater than those who strive to do smart things.

BRK's past performance has been absurdly brilliant. If we also used leverage, even if it was only half of what Murdoch used, we would be five times larger than our current scale.

When we bought coca-cola stocks, it took us months to accumulate 1 billion dollars worth of stocks---which was 7% of coca-cola's total market value. It is very difficult to become a major shareholder.

All large capital will eventually find it difficult to expand, and thus seeks avenues with lower roi.

If you have less capital and are young today, your opportunities are fewer than ours back then. When we were young, we had just emerged from the Great Depression; capitalism was a pejorative term at that time, and criticism of capitalism was rampant in the 20s. There was a popular joke back then: a person said, 'I bought stocks for my old age, but unexpectedly, I had to use them just six months later! I already feel like an old man now.' Your environment is tougher, but that doesn't mean you can't do well---it just takes more time. But damn it, you might live longer.

Three.

Regarding the so-called demographic phenomenon of the 'baby boom' (people born in the USA in the 50s and 60s), its impact is much smaller compared to the effect of economic growth. Over the past century, the USA's GNP (Gross National Product) has grown sevenfold. This was not caused by the baby boom, but rather the success of capitalism in the USA and the development of technology. The influence of these two factors is so bullish, that the baby boom issue is a small fluctuation in comparison. As long as the USA's GNP grows by 3% each year, social peace can be maintained---enough to cover politicians' expenses. If development in the USA stagnates, I guarantee you will witness a real generational gap, and relationships between different generations will become very tense. The baby boom is a catalyst for this tension, but the root cause remains economic stagnation.

In reality, everyone tends to overvalue things that can be quantified because they want to "show off" the statistics skills they learned in school, thus overlooking those things that, while not quantifiable, are even more important. A lifetime has been spent avoiding this error, which seems quite good.

One should understand various thoughts from different disciplines and use them frequently—using all of them, not just a few. Most people are adept at applying a single model, like an economic model, to solve all problems. This aligns with an old saying: "A carpenter with a hammer sees every problem as a nail." This is a very foolish way to work.

For me, categorizing stocks into 'value stocks' and 'growth stocks' is nonsense. This categorization allows fund managers to boast and gives analysts a label, but in my view, all reliable investments are value investments.

Every wise person I have known in my life loves to read. The amount of reading I do, alongside Buffett, could astonish you. My children mockingly say that I am just a book with two legs.

We all love to read extensively; smart people do this, but that's not enough. One should also have a critical acceptance and reasonable application attitude. Most people read without grasping the correct points, and after finishing a book, they fail to apply what they learned.

We often hear these questions from ambitious kids. It's a very "smart" question to ask a wealthy old man: "How can I become you? How can I quickly become you?"

If we were to open another See's confectioners, it would almost cost us no capital. Our capital is so excessive that it's nearly drowning us, essentially at zero cost. For some pancake shops that are extremely short on money, setting up franchise stores would be downright crazy. We prefer to operate directly to better control service quality.

Short selling is very dangerous.

Sitting in a short position while witnessing the stock price surge due to bullish news is particularly frustrating. Life is short, and experiencing such anger is simply not worth it.

One of the most depressing things in the world is that after all your efforts to uncover a scam (and short the company), you can only watch the stock price continue to skyrocket threefold, while those scammers celebrate with your money, and you receive a margin call from the brokerage. Who would want to encounter such a frustrating situation?

The cost of going public has become very high. It makes little sense for a small company to seek an IPO. Many small companies are opting for privatization to escape the burdensome obligations of public companies.

The problem with public bidding is that it often results in people's minds becoming muddled: as others are also bidding, you feel (your bid) has social validation, leading to a feedback tendency, and you may fall into a 'deprivation super-reaction syndrome,' feeling compelled to find ways to prevent your 'favorite' from leaving you... In summary, my point is that this method is designed to manipulate people's psychology, causing them to make foolish decisions.

The issue with dark bidding is that the object is often won by the party that made a technical error, for instance, Shell paid Belec for twice the price. In a public bidding scenario, you cannot pay double the price compared to the losing party.

We prefer to invest large amounts of cash in places that do not require us to make further decisions.

Understanding the essence of investment can also make one a good manager; the reverse holds true as well.

There's something intriguing: you might own a company worth 10 billion dollars, yet that company might struggle to borrow even 0.1 billion dollars. However, since the company is publicly traded, major shareholders can secure loans of several billions using small pieces of paper (stocks) as collateral. Yet if the company were not public, it might not even be able to borrow 1/20th of what those major shareholders could secure.

I frequently see some not-so-smart individuals succeed; they aren't even particularly diligent. However, they are all "learning machines" who love to learn; each night when they go to sleep, they have gained a little bit more wisdom than when they woke up that morning. Buddy, this is incredibly beneficial if you have a long road ahead.

For both private enterprise owners and shareholders of public companies, the standard for buying and selling should be the inherent value of the enterprise rather than past transaction records. This is the most basic value concept, and I believe it will never go out of style.

Buffett and I did not achieve our current success by successfully predicting the macroeconomy and betting on it.

Four,

The questioner is from Singapore, which is probably the most successful developing economy in world history, so this questioner might call a 15% growth rate "conservative." But in fact, this is not "conservative," it is quite arrogant. Only someone from Singapore would dare to call 15% "conservative."

I won't spend a lot of time regretting the past; once I learn a lesson, I won't get stuck in it again.

If you remove the best 15 from our investment decisions, our performance looks rather mediocre. (The focus of the game) is not on a lot of actions but having a lot of patience. You must stick to your principles and when an opportunity arises, strike decisively.

We will throw some decision-making topics into a file cabinet labeled "too difficult" and then look at other issues.

To improve cognitive ability, it is absolutely necessary to forget the mistakes of the past.

In the 1930s, loans obtained through property mortgages could exceed the sale price of the house. This is likely the situation in today's private equity field.

Imitating a large number of people means approaching their average level.

Many opportunities in life only last for a short time, and they persist because others are temporarily unable to seize them. For each of us, opportunities lost cannot be regained, so it's best to be prepared to act at all times and to have enough mental readiness.

Places with huge commissions often have scams.

Admitting that one does not understand something means that the dawn of wisdom is about to come.

Even if one does not like reality, one must acknowledge reality---in fact, the more one dislikes it, the more one should acknowledge it.

We strive to earn money by remembering common sense rather than by knowing cutting-edge knowledge.

In the long term, it's difficult for a company's stock earnings to surpass the company's earnings. If the company earns 6% each year for 40 years, your final annualized return will be around 6%, even if the stock is significantly discounted at the time of purchase. Conversely, if the company's return on assets reaches 18% and continues for two to three decades, even if the stock seems expensive at purchase, it will still bring pleasant surprises.

Just as workers must understand the limitations of their tools, those who earn with their brains must know the limitations of their intellect.

Many markets ultimately form two to three major competitors, or five to six. In some markets, no one can make significant profits, while in others, every competitor does quite well.

For many years, we've been studying why competition in some markets is more rational and shareholders receive decent returns, while in others, competition leaves shareholders with nothing. Let's take airlines as an example. Sitting here now, we can think of various contributions that airlines make to the world—safe travel, better experiences, the ability to fly to your loved ones at any time, and so on. However, since the time of the Wright brothers, this industry has returned a negative profit to shareholders, and it's a significant negative number.

The competition in this market is so fierce that once regulation is loosened, airlines begin deep price cuts that undermine shareholder rights. However, in other industries, such as the cereal industry, almost all competitors are doing reasonably well. If you are a medium-sized cereal producer, you could probably achieve a 15% return on assets.

If you're particularly capable, you might even reach 40%. But why is cereal so profitable? In my view, they engage in all kinds of crazy marketing, promotions, and coupons to compete fiercely and still make profits. I don't quite understand it. Clearly, the brand effect is something the cereal industry has that the aviation industry does not.

This could be a major factor. Perhaps cereal producers have a consensus that no one can compete so irrationally—because if a fool treats market share as a lifeline, for instance, if I were the owner of kellanova and decided to seize 60% market share, I think I could erase most of the market's profits.

In this process, I might destroy kellanova. But I believe I could still accomplish taking over the market and eliminating industry profits. You should have confidence to challenge those who are more experienced than you, provided their cognition is obscured by motivational biases or is significantly influenced by similar psychological factors. However, in other situations, you should recognize that you may not have any novel ideas—your best choice is to trust the experts in these fields.

We found that those 'systems' that excel in business often have some variables that are absurdly maximized or minimized----such as Costco's discount warehouse stores.

Some situations are worse than having a lot of cash with nowhere to invest. I still remember the days of being short on funds---I do not want to go back to that time.

If you always explain your reasons when giving instructions and requests, they will better understand your intentions and find your ideas more important, making them more willing to listen to you.

Live within your means, constantly save money, and put money into accounts where taxes can be deferred. Over time, you will accumulate wealth without having to think too hard.

I try to stay away from those who pretend to know but do not understand.

Five,

I believe that mastering the knowledge organized by others is a more reliable way to learn. I do not endorse the method of blindly experimenting to produce results on one's own. No one can be that clever.

I have an acquaintance whose neighbor's house looks quite unassuming, yet it sold for 17 million dollars. The housing market has extreme bubbles.

Experience tells us that when opportunities arise, if enough preparation is made and you take simple, reasonable actions decisively and courageously at the right moment, you can remarkably achieve wealth. Such opportunities, which arise occasionally, often favor those who are always prepared, constantly searching, and willing to analyze complex matters. When the opportunity presents itself, all you need to do is use the ammunition you have patiently saved through cautious practice to place significant bets on those highly promising opportunities.

The current era is unprecedented in the history of capitalism. Compared to the past, we have the highest number of intellectuals engaged in trading stocks and speculative practices. Many of the things I observe remind me of Sodom and Gomorrah (the cities of sin and depravity). Selfishness, jealousy, and all kinds of counterfeit goods. Such things existed before, leading to terrible consequences.

Our investment style is known as focused investing, aimed at holding ten stocks rather than one hundred or four hundred. Good investments are hard to find, so one should concentrate on those few excellent ones, which is very evident to me. However, 98% of people in the investment world do not think this way. This works out quite well for us.

Be wary of overly strong ideological beliefs. It is very dangerous to have only one thought in your mind.

Like Buffett, I have a strong desire to accumulate wealth. It is not because I like Ferraris or anything, but because I value independence. I have an extreme yearning for independence.

Every person with an engineering mindset feels nauseous when they see accounting standards.

Talk more about your failures and less about boasting your successes; that will be good for you.

Editor/Jayden