Crypto investment requires ultimate faith

Source: Daoshuo Blockchain

In the previous article, I wrote that Mr. Buffett believes that the stock price of a good company is only temporarily lower than its intrinsic value, and in the future its undervalued price will eventually reflect its true intrinsic value.

This is the fundamental reason why Buffett has always been loyal to the US stock market for decades and has always invested most of his positions in US stocks.

When Buffett was asked by investors why the undervalued price will eventually rise to reflect the intrinsic value in the future, Buffett said:

He believes that as long as the United States adheres to the market economy and the rule of law, this is true---this is Buffett's ultimate belief in investing in US stocks.

Buffett said that if he was born in another country (such as Bangladesh), this would not be true.

In fact, it is not just the US stock market. For any investment market, if you want to immerse yourself in it for a long time, you must be able to profit from it for a long time, and not be blinded by short-term twists and turns and ups and downs, and finally point to an ultimate belief.

If investors do not have such an ultimate belief in their hearts, it is impossible to make money in the investment market, because the slightest disturbance can shake them out.

This is easy to say, but very difficult to do.

In the era when Buffett lived, the United States witnessed the Soviet Union launching the first artificial satellite, experienced the social unrest in the 1960s, fell into the Vietnam War in the 1970s, triggered the collapse of the Bretton Woods system, and was helpless in the face of the aggressive expansion of the communist Soviet Union. It was forced to extend an olive branch to Beijing...

These events have set off huge waves in American society, shaking people's beliefs again and again. Even some so-called social elites have begun to question this system:

The market economy is not working, and the Soviet-style planned economy is the hope of mankind...

Faced with so many doubts and challenges, Buffett has repeatedly stated in his shareholder letters that he believes in entrepreneurs under the American system and believes that these entrepreneurs can create miracles.

What Buffett firmly believed was true:

Silicon Valley had Fairchild Semiconductor, HP, Apple, Microsoft, Cisco, Oracle, Google, Facebook, Nvidia...

The Soviet Union, which once seemed aggressive, turned out to be just an empty shell when people peeled off its surface.

Wall Street's experience was equally turbulent: the S&P 500 plummeted 15% in 1962, 36% from 1968 to 1972, 59% in 1973, 22% in a single day in 1987, the collapse of the Internet bubble in 2000, the outbreak of the financial crisis in 2007, and the stock market crash triggered by the COVID-19 pandemic in 2020...

These crises have strongly impacted the U.S. financial system and shaken people's confidence time and time again. Every corner of society and every voice in the media are saying:

The U.S. stock market is finished, and America is finished.

Also facing so many doubts and challenges, Buffett has repeatedly shown his dazzling achievements in his shareholder letters:

Coca-Cola continues to expand its business territory globally, American Express continues to reap huge profits, and Berkshire Hathaway continues to create miracles in the investment market...

Compared with these countless storms and waves, what are the twists and turns that the crypto ecosystem is encountering now?

When encountering twists and turns, it is important to reflect on the mistakes in past cognition. The purpose of reflecting on mistakes is to better walk on the right path and to make fewer mistakes in the future.

If this kind of reflection on cognitive errors is regarded as doubt, it can only mean that the so-called "beliefs" in the past are false.

When there is no solid faith in the heart, seeing the sun briefly obscured by dark clouds will make people think that the world will be dark forever. In this mentality, it is not surprising to read the opposite meaning of straightforward text.

The Sixth Patriarch Huineng said: "It is not the wind that moves, nor the flag that moves, but the heart of the benevolent that moves."

I would change this sentence to: "It is not the article that moves, nor the author that moves, but the heart of the one who moves."