Investment Principles (I)

No fortune teller, only a responder.
"I do not predict market trends; I only make the most reasonable responses to the current market." This statement may seem humble, but it actually reveals the deepest wisdom in investing. It abandons the arrogance of predicting the future and chooses the humility of responding to the present. This shift is precisely the watershed moment from being a losing retail investor to becoming a mature one.

The market is driven by the expectations and emotions of countless participants, and its complexity far exceeds any model. Research by Nobel laureate Robert Shiller shows that in short-term stock price fluctuations, irrational factors such as market sentiment contribute the vast majority. Countless people accurately predicted the 2000 internet bubble, yet they were liquidated due to "premature" short selling long before the bubble burst. The difficulty of prediction lies not just in whether it is "right or wrong," but more importantly in "when it will be right." Building investment on the shifting sands of prediction is no different from gambling against uncertainty.

The "current market" contains three dimensions: the collective expectation reflected in the current price, the temperature of current market sentiment, and the real balance of long and short forces on the tape. These are not vague feelings, but quantifiable and perceptible objective realities—the percentile of the P/E ratio, abnormal changes in trading volume, and whether key support and resistance levels are broken. These "now" data points are the only reliable information source for investors.

After abandoning prediction, "rational response" has a clear action framework: establish a position management system based on probability, build positions step-by-step when the market is undervalued, and gradually reduce positions when overvalued; formulate "if... then..." contingency plans instead of predictive decisions like "I judge that... will..."; set rigid stop-loss discipline to control risk in the blind spot beyond right and wrong.

The shift from prediction to response is not just an upgrade in methodology, but also a cultivation of the investor's mindset. It means accepting uncertainty, admitting ignorance, and letting go of the obsession with a sense of control. This internal transformation may well be the most difficult and valuable part of investing. The future of the market is always like distant mountains in thick fog, but the path underfoot is clearly visible. Smart investors do not look up at the summit, but focus solely on taking every step forward correctly in the present.