Why do major influencers in the crypto world all follow a value investing approach?

The three main axes of value investing: this industry is sustainable + value reversion + I buy more when it drops

These three logics are completely brainless,

They are hard to go wrong with over a five-year horizon — just common sense.

On Snowball, most investment research is basically based on these three axes,

Constantly setting new hypotheses,

Then finding data to test them,

And reinforcing impressions through this process.

However, in my view,

True value investing has only one standard:

Value discovery

Put simply,

It’s about a company that can earn more money in the future,

And has the potential for steady, sustainable operations.

This requires a company —

First,

Reliable management,

The product may perform poorly temporarily,

But aligns with the future development direction of the industry,

And has no potential risk of being replaced by new technology or platforms.

Second,

The industry track the company is in is healthy,

Not monopolistic (or the company itself is a monopoly),

Ideally, it’s a track that hasn’t fully developed yet,

And will inevitably develop (typical examples are now robots, AI, satellites).

Third,

Undervalued,

Misunderstood,

Wrongly killed,

Driven by panic.

If you look at Moutai from a value discovery perspective today,

It’s reliable and healthy with a monopoly,

But the industry development is already mature.

The current problem with Moutai is panic,

People are overestimating the possibility of deflation,

And underestimating the government’s resolve for moderate inflation.

So you might think,

What’s the difference between value discovery and Snowball-style value investing?

The difference is,

Value discovery can also be used to analyze the tech industry,

Advanced manufacturing.

For example, look at optical modules,

They are core components for AI chips and communications,

High value,

And their value increases after technological iteration.

Although in the future, scale production might lower prices,

Large-scale production also means cost reduction,

And overall AI computing demand for optical modules is continuously increasing,

It’s a track that has developed but is still evolving.

So even if gross margins decline in the future,

The overall profit can still increase because of higher volume.

Moreover, domestic computing power needs optical modules,

Overseas computing power also needs optical modules,

The competitive landscape of optical modules is still in an incremental stage,

And currently, the competition is favorable.

If you say optical modules have risen too much in the short term,

Then you’re right.

If you say optical modules have peaked here,

Then we’ll have to see.

Hot knowledge:

Tencent rose from 178 to now 673,

Almost quadrupled,

But the P/E ratio is still 27.

This is the benefit of value discovery,

It requires a broad, forward-looking perspective,

To view an industry.

The problem with Snowball-style value investing is,

When they encounter industries like optical modules, they just talk nonsense,

For example, can you hold optical modules for ten years?

They themselves might not even hold liquor for ten years —

I mean,

They can only be trapped in liquor for ten years,

They can’t make money while holding for ten years.

And I’m already making money on optical modules now,

Once I reach my target price, I start taking profits in batches,

Switching to other value discovery fields,

Why would I hold for ten years?

Asking others if they can hold for ten years,

Is often from people who have been trapped for ten years,

Not from those who have made ten years’ worth of money.

So you can see,

The core advantage of Snowball-style value investing is,

It’s a method born from losing,

If you haven’t done enough research,

And get trapped,

You keep encouraging yourself to hold on.

Snowball-style value investing doesn’t encourage you to discover value,

It encourages you to repeat the same logic,

Join Lao Deng,

And avoid looking at new things.

Of course,

Snowball-style value investing can also make money,

Because if you buy good quality companies,

You will still encounter moments of revival.

But as an investment research method,

Snowball-style value investing is a way for big V’s to escape responsibility,

Anyway, if you lose money, it’s just value investing,

No timing, no opportunism,

Mainly about taking hits without fighting back.

If you look at it long enough, you’ll realize,

These people don’t teach you position control,

Nor industry allocation,

Just a turtle’s shell to respond to all market changes.

However,

If retail investors truly have this mindset,

Can firmly believe in their logic,

Hold through major corrections,

Maintain their positions,

Keep adding on dips,

And not go all-in

——

Are they still just leeks?

**#价值投资 **#Crypto Market Observation