📖William Gann
Understand Before Investing
Only invest in what you can explain simply.
Never invest in a business you cannot explain in simple terms. If you can't describe why a company is valuable, you don't understand it well enough to own it.
🏠 Everyday Analogy
📖 Core Interpretation
W.D. Gann emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Simplicity of explanation tests depth of understanding.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Black Monday Crash Setup (1987)
An analyst applied the Square of Nine to the S&P 500, noting geometric resistance and time cycles converging in late summer 1987, warning of a sharp correction before Black Monday.
✨ Outcome：Exited index positions in advance and re-entered gradually after the crash at lower prices.
2
Pre-Crash Speculation in U.S. Equities (1929)
A trader buys stocks on margin in mid-1929, ignoring Gann’s rules on overtrading, trend analysis, and protective stops.
✨ Outcome：Severe losses in the October crash; portfolio wiped out due to no stop-loss and failure to follow trend-reversal signals.
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