Crypto Coin News reports:
I have shared some perspectives of Lin Yuan, a well-known A-share investor, in previous articles. His viewpoints often provide deep insights from unique angles.
Recently, I came across a fascinating video featuring Lin Yuan, an interview conducted by Gleam.
In the interview, Gleam mentioned an experience of Lin Yuan’s:
In 2007, Maotai’s closing price was 199 yuan, with a net profit of 2.8 billion RMB that year. By 2013, Maotai’s closing price was 113 yuan, with a net profit of 15.1 billion RMB.
Over these 6 years, Maotai’s net profit increased more than fourfold, but its stock price declined instead of rising.
Regarding this, Gleam asked Lin Yuan how he endured these 6 years and managed to hold onto Maotai without selling.
Lin Yuan responded succinctly, stating that for him, it wasn’t about endurance.
Firstly, he had purchased Maotai at a much lower price than the prevailing market price at the time.
Secondly, over these 6 years, seeing Maotai’s substantial increase in net profit further convinced him that Maotai’s true value far exceeded its stock price. In this situation, he never considered the stock price.
It’s important to add some background here:
From the end of 2007 to the end of 2013, Maotai’s stock price went through two significant bull and bear cycles, with price retracements exceeding 50% in both cycles.
Given this background, we see Lin Yuan completely ignored two price retracements exceeding 50% over 6 years, steadfastly holding onto his favored investment without wavering. This is reminiscent of certain actions by Buffett.
Furthermore, interpreting Lin Yuan’s statements, I understand it as follows:
Regarding not feeling distressed when buying at a price significantly lower than the market price, I speculate he means: for him, if he buys an investment at a very low price and subsequent prices are much higher, he doesn’t psychologically feel the “distress” or the pain of losses.
When the intrinsic value of an investment significantly grows, far surpassing its stock price, Lin Yuan isn’t concerned that the stock price will forever linger low; he firmly believes there will be a day when its value shines through. At least, he managed to wait 6 years without caring about the stock price.
After watching this interview, I immediately thought of the crypto world and my own experiences.
Starting from when I first bought Bitcoin and Ethereum, the prices were much lower than they are now.
However, throughout this process, I couldn’t achieve the same lack of “distress” because even though I know the long-term trend of Bitcoin and Ethereum prices is bullish, when I feel their prices (in the late stages of a bull market) are “too high,” I still can’t resist selling—what I often call “selling at the peak of the bull market.”
Although I often talk about selling at the peak of a bull market and have successfully practiced this strategy in past cycles, luckily hitting the mark every time, deep down, I walk on thin ice because I don’t have the confidence each time that I’ll be able to time it right again.
Up until now this year, I have read books by Don Bin, books by Munger, and now I’m reading Buffett’s books. To be frank, after reading these predecessors’ books, I increasingly feel that the profits from selling at the peak of those bull markets were due to my good luck, rather than necessarily strong judgment. After watching Lin Yuan’s interview, this feeling of mine has become even stronger.
Now, let’s consider Bitcoin and Ethereum through this lens:
Firstly, whether from the internal ecosystem development, community consensus, or external capital inflows and regulatory developments, I firmly believe the long-term value of Bitcoin and Ethereum is upward.
But if Maotai’s story happened to Bitcoin and Ethereum, for instance, from this year until 2030—6 years later—will Bitcoin and Ethereum still be priced at $60,000 and $3,400 respectively?
Earlier, I wrote in an article that if Bitcoin’s price doesn’t exceed $100,000 in this round of bull market, I wouldn’t even consider selling; I would hold onto it until the next expected bull market four years later.
But this assumption actually has an implicit premise: that four years later, Bitcoin’s price will definitely exceed $100,000.
This is akin to Lin Yuan’s understanding of Maotai—our understanding and cognition of Bitcoin and its field!
