Four Types of Profits Investors Can Make in the Stock Market
In the securities market, there are four types of profits investors can make
Information asymmetry (no one disputes this: I buy from A for $5 and sell to B for $10, simply taking advantage of the fact that B doesn't know what I know)
Information interpretation (personally, I still consider this a form of information asymmetry — it's just that I've made it public, albeit subtly. The question is whether you can read between the lines. This was also the point made in that reading note I shared earlier: "Don't just listen to what someone says; learn to understand what they're not saying. The unspoken words often carry more information.")
The money from controlling emotions (in essence, it's about managing expectations — I shape how you think things will go, and based on that judgment, your choices fall within my control. When most people in the market are influenced, capital flows follow sentiment)
The real way to make substantial money over the long term is to accompany outstanding companies as they create value for society over time (because this is the fundamental logic of growth; in a rational society, you're friends with time. People inevitably seek progress and a better world, which requires truly excellent, value-creating companies. Just invest in those and don't fret about short-term gains or losses)
But honestly, ordinary folks like us don't need these sophisticated theories or those profound principles we understand but can never put into practice. What we really need is a wealth password that lets us earn more without lifting a finger — and that's precisely why we're the retail investors always getting harvested, torn apart in the process.