Duan Yongping Investment Analysis Prompt

Three misconceptions:

**Misconception 1: "Duan is just lucky"**
- Buying NetEase at $0.8 → selling at $100 isn't luck
- Long-term Apple holding isn't coincidence — deep business model understanding
- Being "lucky" repeatedly itself proves capability

**Misconception 2: "His method is just buying and holding forever"**
- He also sells: cleared NetEase when it reached fair valuation
- Key is "knowing what it's worth," not blindly holding
- If fundamentals change, he exits

**Misconception 3: "He only invests in large companies"**
- When he invested in NetEase, it was tiny and near delisting
- He invests in "good businesses," not "large companies"
- Key criteria: business model and management, not market cap

Duan Yongping's method is one of the most suitable for ordinary people:

✅ **Why suitable for ordinary people**:
- Doesn't require complex financial knowledge
- "Don't invest in what you don't understand" itself lowers the bar
- Find investment targets from your own work and life
- Long-term holding reduces trading frequency and decision pressure

⚠️ **Learning pitfalls**:
- Misunderstanding "simple" as "no research needed" — Duan's simplicity is built on deep understanding
- Copying his holdings without understanding the logic
- Thinking buying Maotai or Apple means learning from Duan

💡 **Learning path**:
1. Read Duan's Q&As on Xueqiu
2. Learn to analyze a company's business model
3. Start practicing with small positions

Duan Yongping is Buffett's most successful practitioner in China:

**Similarities**:
- Both emphasize understanding business essence
- Both value management integrity and capability
- Both practice concentrated, long-term investing
- Both emphasize margin of safety

**Differences**:
- Duan focuses more on consumer tech (Apple, Tencent, NetEase)
- Buffett mainly invests in US companies; Duan invests in both China and US
- Duan emphasizes "do the right thing" at a philosophical level
- Duan has deeper understanding of internet business models (OPPO/vivo founder background)
- Duan doesn't use insurance float model; pure personal investing

Duan Yongping's method is best suited when market conditions align with Integrity, common sense, long-termism, Chinese value investing characteristics. Investors should decide whether to adopt this strategy based on their risk tolerance and investment objectives.

Duan Yongping's investment philosophy can be summarized in three keywords:

**1. Don't invest in what you don't understand**
- Only invest in businesses you truly understand
- Can explain in one sentence how the company makes money
- Would hold even if stock market closed for 10 years

**2. Do the right thing**
- Companies should do the right thing (correct strategic direction)
- Investors should also do the right thing (think independently, wait patiently)
- "Doing the right thing" matters more than "doing things right"

**3. Buying stocks is buying businesses**
- Not buying stock codes, but buying businesses behind them
- Focus on business essence: moat, management, business model
- Classic examples: Apple, Maotai — based on deep understanding of business essence

**Duan Yongping** is a representative figure of value investing in China. He founded well-known brands like BBK, OPPO, and vivo, and achieved huge returns investing in NetEase (from $1 to $70) and Moutai. His investment philosophy is deeply influenced by Buffett and Munger, but incorporates Chinese culture's concept of "Ben Fen" (doing one's duty properly).

**Duan Yongping's core principles**:
1. **Ben Fen investing**: Only do business you truly understand, invest within your circle of competence; don't chase excessive profits, don't try to catch the last penny. The essence of Ben Fen is **rationality, restraint, and long-termism**
2. **Contrarian thinking**: Be greedy when others are fearful (bought NetEase in 2008), be fearful when others are greedy (reduced Apple holdings in 2021). "Don't go where the crowd goes"
3. **Margin of safety**: Only buy when price is significantly below value, leave room for mistakes
4. **Long-term holding**: Hold quality companies for 10+ years, enjoy compound growth

Duan emphasizes that the most important thing in investing is **"what not to do"** rather than "what to do". Avoiding mistakes is more important than catching every opportunity.

Duan Yongping's method is battle-tested in A-shares:

✅ **Effective parts**:
- Choosing right industry and company works in any market
- Judgment on consumer and internet companies (Maotai, Tencent)
- "Don't invest in what you don't understand" avoids many pitfalls

⚠️ **Differences to note**:
- A-shares more volatile, need stronger psychological tolerance
- Higher retail investor ratio, less market efficiency
- Policy factors have greater impact

💡 **Key insight**: Method works, but requires truly understanding business essence, not just buy-and-hold

⚠️ Check whether AI truly understands Duan Yongping's "doing the right thing" investment philosophy.

Duan's core isn't complex financial analysis, but:
- "Do the right things" (choose right business model)
- "Do things right" (choose right management)
- Business model > Management > Price

✅ Verification:
1. Did AI analyze the company's business model essence? (not just financials)
2. Did AI evaluate management's integrity and long-term orientation?
3. Does AI's valuation leave sufficient margin of safety?

✅ Duan Yongping's decision framework is very simple:

1️⃣ Can you understand this company's business? (Don't invest if not)
2️⃣ Is management principled? (Don't invest if not)
3️⃣ Is price at sufficient margin of safety? (Wait if too expensive)
4️⃣ If all three are "yes", buy heavily and hold long-term
5️⃣ Don't try to make too many investments, you only need a few big right decisions in life