📖Li Lu
Market Cycles Awareness
Understand where you are in the market cycle.
Markets move in cycles driven by human emotion. Understanding where you are in the cycle helps you prepare for what comes next and position accordingly.
🏠 Everyday Analogy
📖 Core Interpretation
Li Lu highlights that many investment mistakes are psychological, not analytical. Managing behavior under stress is as important as finding ideas.
💎 Key Insight：Cycle awareness improves investment timing.
AI Deep Analysis
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❓ Why It Matters
In volatile markets, fear and greed push investors to buy high and sell low. A behavioral framework reduces avoidable, self-inflicted errors.
🎯 How to Practice
Pre-write decision rules, slow down trades during stress, and separate market emotion from business facts before adjusting positions.
⚠️ Common Pitfalls
Following crowd emotion at extremes
Mistaking confidence for certainty
Forcing trades to quickly recover losses
📚 Case Studies
1
Financial Crisis Bank Bets (2008)
During the global financial crisis, high‑quality U.S. financials traded at distressed prices despite strong franchises and survivable balance sheets.
✨ Outcome：Purchases made at large discounts to conservative intrinsic value estimates produced substantial gains as panic subsided and earnings normalized.
2
Investment in BYD (1999)
Li Lu analyzed BYD’s technological and cost advantages in batteries and autos, seeing a durable moat in engineering talent and vertical integration.
✨ Outcome：Backed BYD early; Berkshire Hathaway later invested, and BYD became a multibagger over the following decade.
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