Admit your mistake and exit, don't buy just because it's cheap.

I bought KEEP all the way from 5.91 down to 3.54 (a 40% drop from the initial purchase point, with an average cost of 4.25 after the final top-up), buying more as it fell. After the last purchase, there was a brief, short-lived rebound, and I could have gotten out with a small loss (it rebounded to a high of 4.15 on 2026.1.13). However, I was unwilling to accept it and didn't cut my losses in time.

Last week, the US stock market offered a rare "backing up to pick you up" opportunity. Compared to the uncertainty of KEEP, I'd rather trust the certainty of the Magnificent Seven. So I cleared out my KEEP position and used the proceeds to increase my positions in Tesla, NVIDIA, and Amazon (I also bought long calls on Amazon).

So now I strongly realize the wisdom of Buffett and Munger: don't buy ordinary companies just because they're cheap. The biggest cost of holding a cheap company is the opportunity cost.

Maybe I gave up just before dawn. KEEP's ALL-in AI strategy might bring about a second growth phase for KEEP. It's not impossible that one day, riding a wave of market hype about AI applications, it could multiply several times over. But the problem with small-cap companies is that there's just too little information available in the market. What's the current progress of KEEP's AI strategy implementation? I searched the entire internet and couldn't find much solid data to support it.

Furthermore, regarding KEEP's business model, "Self-discipline gives me freedom"—the slogan is very inspirational, but this is an anti-human-nature business. Anti-human-nature businesses are tough.

China has 1 billion people with fitness needs. How many of them consistently exercise? 100 million?

If 100 million people consistently exercise, how many are willing to pay for fitness long-term? 10 million?

If 10 million people are willing to pay for fitness long-term, how many are willing to pay KEEP long-term? 1 million?

Also, for KEEP's business, just holding its ground is an achievement. On the hardware side, it faces direct competition from various smartwatch apps; online, it's being siphoned off by Xiaohongshu and Douyin. It's genuinely difficult. During the pandemic era, KEEP had the highest monthly active users. Its large user base precisely made it the biggest "target." In the food delivery battle, Alibaba could beat Meituan because Meituan's scale was too large. Meituan defended, Alibaba attacked. Even at its best, Meituan could only achieve "not severe losses," and at its worst, Alibaba could only achieve "capturing fewer cities than expected."

Let's review why I bought it in the first place? It was cheap! A fitness app that still has over 20 million monthly active users—intuitively, it shouldn't be worth less than 2 billion.

The Efficient Market Hypothesis is a great way of thinking:

The prices of all stocks in the current market fully reflect all publicly available information. In other words, the prices of all stocks are currently "reasonable."

Then why is it so cheap?

Don't others think it's cheap?

Why is no one buying it even though it's so cheap?

Thinking these questions through before acting might make it easier to hold on.

I remember buying Fu Shou Yuan was the same story. It seems I really have no luck with small caps. Setting a flag here: I don't plan to touch companies with a market cap below 10 billion anymore.

$KEEP(03650.HK) 

$FU SHOU YUAN(01448.HK)