Long-Term Investment Insights from "The NVIDIA Way"

How to find a company worth holding for the long term is a topic many continuously explore. Some focus on financial data, others rely on technical analysis, but for me, what truly brings peace of mind is not cold numbers, but a deep understanding of the company's leader.

An exceptional leader can guide a company through a crisis and propel it forward in times of opportunity. This is the true source of confidence for long-term investment.

Take Dazi for example, I highly recommend a book — "The Way of NVIDIA" (or "The Way of NVIDIA"). This book is not merely a corporate biography chronicling NVIDIA's journey from a small graphics processor company to a global AI and GPU powerhouse; it's also a window into Jensen Huang's leadership wisdom, decisiveness, and how he shaped NVIDIA's unique corporate culture.

The Leader's Impact: The Soul of the Company

Jensen Huang is undoubtedly the soul of NVIDIA. His leadership style, values, and decision-making ability directly determine NVIDIA's fate. As investors, understanding the company's leader is crucial because every choice they make can impact the company's long-term development. Jensen Huang is not only a technical expert but also a leader who can remain calm in crises and strike decisively when opportunities arise.

Whether a company's stock is worth holding long-term often depends on whether its leader possesses the resilience to face challenges and the vision to lead the future.

The Wisdom of Three Crises and Transformations

NVIDIA's success did not happen overnight. It has stood on the brink of bankruptcy multiple times, but Jensen Huang always managed to lead the team to safety. "The Way of NVIDIA" details three key crises and their transformation processes, stories that fully showcase Jensen Huang's leadership wisdom:

• The 1997-1998 Technology Crisis In its early days, due to technological bottlenecks, NVIDIA failed to launch competitive products in time, leading to a rapid decline in market share and bringing the company to the verge of collapse. Jensen Huang decisively invested resources in developing new technology, ultimately launching the groundbreaking product—GeForce 256. This chip, dubbed the "world's first GPU," not only saved the company but also established NVIDIA's leading position in the graphics processing field. This crisis proved Jensen Huang's decision-making ability under pressure.
• The 2008 Financial Crisis The global economic recession hit the tech industry hard. NVIDIA's stock price plummeted, and market demand was weak. Many companies chose to cut costs to survive, but Jensen Huang did the opposite, insisting on investing in AI and deep learning R&D. This decision seemed extremely risky at the time, but it later proved to be the crucial step for NVIDIA's shift from the gaming market to the AI field, laying the groundwork for its explosive future growth.
• The 2017-2018 Cryptocurrency Bubble As the Bitcoin craze faded, NVIDIA faced an inventory crisis due to a sharp drop in cryptocurrency mining demand. Jensen Huang quickly adjusted strategy, shifting focus to AI, data centers, and autonomous driving, successfully resolving the crisis and opening up new growth avenues. This transformation not only helped NVIDIA overcome the difficulty but also further solidified its position as a technology leader.

Corporate Philosophy: The Cornerstone of Innovation and Cooperation

Jensen Huang's leadership wisdom is deeply embedded in NVIDIA's corporate philosophy, not just in crisis management. NVIDIA's operations have two core philosophies for your reference:

• "Deconstructing a Whole Cow" Jensen Huang uses this vivid metaphor to describe NVIDIA's product strategy. Just as a butcher deconstructs a cow into different parts for various uses, NVIDIA subdivides chip technology into multiple product lines—from GeForce for gamers, to A100 for data centers, to solutions for autonomous driving. This strategy allows NVIDIA to flexibly meet the needs of different markets, maximize resource utilization, and maintain a competitive edge.
• "Rough Justice" In relationships with partners, Jensen Huang does not pursue superficial absolute equality but emphasizes a relative balance of interests for both sides. This pragmatic philosophy of cooperation has built long-term trust between NVIDIA and its suppliers, customers, and ecosystem partners. For example, NVIDIA's close collaboration with game developers and AI research institutions is a result of this philosophy. This culture has helped NVIDIA build a powerful ecosystem, allowing the company to stand firm in the market.

These philosophies are not only the cornerstone of NVIDIA's success but also provide clues to understanding a company's competitiveness. When you understand the logic behind these philosophies, you can see NVIDIA's long-term potential more clearly.

Investment Insight: The Long-Term Value of Leaders and Companies

Jensen Huang's experience tells us that an excellent leader can demonstrate resilience in crises and seize opportunities during transformations. This is the true source of confidence for long-term investment. Specifically:

• Resilience in Crisis: Jensen Huang led NVIDIA back from the brink of bankruptcy three times, proving his exceptional adaptability.
• The Value of Transformation: The shift from gaming GPUs to AI and data centers shows NVIDIA's ability to adapt to market changes.
• The Leader's Conviction: Jensen Huang's dedication to technological innovation keeps NVIDIA at the forefront of the industry.

Therefore, long-term investment is not a simple numbers game; it's built on a deep understanding of the company and its leader. When you truly recognize Jensen Huang's leadership wisdom and NVIDIA's intrinsic value, even if the market falls or fluctuates, you can hold your stock firmly and wait for its long-term returns.

With Jensen in mind, stay calm when the market falls 😃