The Essence of Capital Markets: Monetizing Insight

I want to share some of my views on the capital markets with you—views that might differ from what you usually hear. Many people believe that making money in the capital markets is about luck, about "single bets," and that if you gamble correctly, you can get rich overnight. But I want to tell you that this is a massive misunderstanding.

True wealth is never accumulated through one or two successful gambles. It stems from long-term, correct decisions that allow wealth to roll like a snowball, growing constantly through the compound interest effect. Therefore, the core of the capital market is not to pursue so-called "quick money," but to strive to identify and seize opportunities with higher certainty.

This requires a profound understanding of market operating laws, especially the cyclical nature of the primary market. Only when you truly understand the cycle can you seize the real, massive opportunities amidst the waves, rather than being easily thrown off by the market's short-term fluctuations.

You must remember: The essence of investment is cognition. The height of your cognition determines the height of the wealth you can reach. Look at those who are truly wealthy; not a single one of them succeeded by "taking a punt." They all relied on making correct decisions over the long term, making time and compound interest their most powerful friends. They understand that the market is not a casino, but a place that converts your cognition into wealth.

The Power of Compounding: Warren Buffett

Speaking of this, I want to share a name we are all very familiar with—Warren Buffett. Do you know how he used his cognition to exchange for the compounding of time?

Buffett is called the "God of Stocks" by many, but his true wealth code isn't that he "bet" on a magical stock. It is that for decades, day after day, he persisted in making long-term correct decisions and let compound interest exert its astonishing power.

The story goes back to 1958. That year, Buffett began buying stock in a company called Berkshire Hathaway at a price of about $1.30 per share. At the time, this was just a very ordinary textile company, and the entire market was bearish on it. Many felt the textile industry was a sunset industry, and some even mocked Buffett, saying he picked the wrong track.

But Buffett was not swayed by the market noise or short-term pessimism. He knew deep down that true wealth comes from the intrinsic value of a business, not the momentary fluctuation of stock prices. Later, by continuously acquiring high-quality companies with excellent business models and optimizing asset allocation, he eventually transformed Berkshire Hathaway from a textile mill on the verge of bankruptcy into a massive, respected investment empire.

As of 2025, Berkshire Hathaway's stock price has reached an astounding $771,250 per share. From the initial $1.30 to today, it has grown more than 60,000 times. But think carefully: was this huge wealth completed in a single trade? Of course not. This was accumulated by Buffett over long years, relying on countless correct decisions, combined with the magic of time and compounding—step by step, just like rolling a snowball.

This is actually exactly what I have been doing, and it is the underlying logic of capital operations I often talk about—in-depth post-investment management and refined due diligence. Behind this is the assurance that every decision we make is based on profound cognition and judgment of value.

Buffett’s story is the classic case of "Monetizing Insight." It tells us: The market is often short-sighted, but true winners know how to position themselves early, wait patiently, and ultimately enjoy the generous gifts brought by time. This is also why I have the confidence to be your mentor today.

The Vision of the Primary Market: Peter Thiel

Beyond Buffett, I also want to talk about another legendary investor from Silicon Valley—Peter Thiel. We call him the Godfather of the "PayPal Mafia."

I was honored to meet him at the Global Internet Venture Capital Summit in 2015. He had a critical influence on my investment banking career over the past decade. Even today, we maintain the habit of a weekly phone call to share our latest views on the market, or simply to chat.

His daughter, Helena Thiel-Danzeisen, is lovely; we are like sisters. However, although Peter Thiel is a legend in the capital world, in my heart, he is not exactly a qualified father. Just listening to the name "PayPal Mafia," you can sense that he often makes decisions that seem inconceivable, even somewhat cold, to ordinary people.

For instance, in 2004, he made a decision that no one understood at the time: he invested $500,000 to purchase a 10% stake in Facebook. At that time, this investment was what we would now call a Pre-IPO round. Facebook was just a social website limited to university campuses, with no clear business model, and almost no one in the market was optimistic about its future.

But Peter Thiel’s cognition surpassed that of all ordinary investors at the time. He saw what others did not. He said: "Internet social networks will become the core trend of the future, and Facebook happens to be at the starting point of this huge wind." He was not disturbed by short-term profit expectations or market noise but firmly held onto this investment that looked extremely risky at the time.

Eight years later, in 2012, Facebook successfully went public. Peter Thiel gradually sold his shares after the IPO, ultimately gaining a return of over $1 billion—a return rate as high as an astonishing 2,000 times.

This is a real-life case happening around me regarding understanding market cycles, positioning early, and seizing massive opportunities.

Imagine if Peter Thiel didn't have that level of cognition. If he were like an ordinary retail investor in the secondary market, staring at short-term price fluctuations every day, thinking about making a quick buck and running, while constantly worrying about getting trapped by changes in market sentiment... then, when he saw Facebook failing to turn a profit for so long, he would likely have sold his shares long ago. In that case, he would never have enjoyed the astonishing dividends of over a thousand-fold return.

Oh, the market! What kind of person does your short-term emotionalism create? And what kind of person is required to truly read your long-term rationality?

I often share a saying with friends when discussing the market, and today, I want to give this sentence to you:

"Don't look at what is happening in the market now; look at what will happen in the market in the future."

Conclusion

What I want to tell you is that whether it is Buffett’s long-term compound growth or Peter Thiel’s precise layout in the primary market cycles, the core of their success was not "good luck," nor was it "betting on the right horse."

Ultimately, they achieved such huge success because their cognition was deeper than that of ordinary people, and their perspective was longer-term than the market.

So, please remember:

The height of your cognition determines the upper limit of your wealth.

The market is never a casino; it is a place where your cognition is realized as cash. I sincerely hope that under my guidance and help, you can continuously improve your understanding of the market and ultimately become a truly wealthy person.