How to manipulate the market

First, your capital must be large enough to control the market. If the asset you’re targeting is too big and you can’t dominate the situation, even a meticulously designed scheme will be useless. Next, conduct thorough due diligence: the industry should have no major red flags in the past three years—avoid落后的产能 (obsolete capacity). The company itself should also be free of significant issues over the past three years. You don’t want a chairman with questionable conduct, executives causing trouble constantly, or serious problems in the product line.

Begin with a test sell-off. Dump some shares to see where the current chips are held: among other institutions, large holders, or retail investors. If it turns out to be the former two, you’ll have to abandon the plan—the risk is too high.

If it’s the latter (retail investors), start dumping. Selling off isn’t about skill; it’s about patience. Deliver one sharp sell-off. Retail investors will think the bottom has been reached. Keep going. They’ll think the bottom’s been reached again. Keep going. Dumping for two or three years is perfectly fine.

The goal of dumping isn’t the price—it’s time. Dump until you can’t hold on anymore. Dump until you’re forced to exit. Dump until trading goes cold. Very few retail investors can endure three years. Most will hand over their chips during repeated drops and bounces. You might say, “I’m stubborn—I won’t sell.” But that’s impossible.

The manipulator’s dumping method is simple. In the first round of selling, 30% of investors will already have capitulated. The rest will try to average down. Want to buy more? Fine. Stage a rebound so you’ll chase it. Then dump again in the second round. Another 30% will fold. Want to keep playing? Continue. Stage another rebound, then dump again—deeper each time. How many of the final 40% of retail investors will remain? Maybe 20%? These 20% are down 70–80% and still refusing to sell? No problem. I’ll ignore them for three years. During those three years, all the news from the company’s executives will be negative—entirely orchestrated to torment you psychologically day after day. When you get home, that enormous and persistent unrealized loss will put pressure on you from your wife, your mother-in-law. After three years, won’t you crack? Actually, you wouldn’t even need three years—one or two years is enough.

Even if a few stubborn ones remain at the end, during the pump phase, as soon as they break even, they’ll sell. They’ve suffered long enough that their精神 (mental resilience) is shattered. Once they’re back to breakeven, they simply won’t have the ability to hold their positions any longer.

Then comes the pump. This phase is extremely fast—it’s designed to keep you from getting on board. If too many people react quickly and manage to get in, induce volatility to shake them out. Finally, sell at the highs and complete the cycle.

Look at the U.S. stock market before the 1940s. It was dominated by retail investors. The U.S. market rose for a century—did retail investors make money? No, because they couldn’t hold. At the lows, you’d always be shaken out. At the highs, you’d always be talked into buying the top. When Buffett was making money, U.S. retail investors weren’t. U.S. retail investors gradually exited the market after the 1980s, with mass exodus happening in this century.

Only then did the U.S. market become institution-dominated, with retail investors opting out. They were harvested for generations—harvested to the point of memory loss, too beaten to resist. Eventually, U.S. retail investors all ended up buying index funds. That means over a century of U.S. market gains, retail investors effectively only captured profits from the final 20 years.