Lin Yuan said: “A friend has been investing in stocks with me since the 1990s. Now my assets exceed 10 billion, while he only has a few hundred thousand. Why is it that he participated in all the big bull stocks I’ve traded in my life, yet he makes so little money?

There are three main reasons. Friends who want to make big money in the stock market must avoid these three situations.”
First, always participate with very little money
We know that one of the secrets to making big money in the stock market is to hold large positions in good stocks. The most painful thing is buying the right stock that skyrockets 100 times, but only buying the minimum amount, say 100 shares, wasting a once-in-a-lifetime opportunity. Participating with a small amount of money results in small gains.
Second, lacking compound interest mindset, taking profits and spending them
Anyone can make big money with compound interest. Investing 15,000 dollars each year in good stocks with a 20% annual return, after 40 years, you can earn 108 million dollars. Lin Yuan found that his friend lacked a compound interest mindset; every time he made a few hundred thousand dollars, he sold and spent the money. As a result, after 30 years of trading, he only had a few hundred thousand in assets and couldn’t make big money. Compound interest is generated by reinvesting earnings to grow continuously. If you take the money out, the power of compound interest diminishes.
Third, stubbornly sticking to one’s own opinion and not correcting mistakes
In this world, only a few are capable of leading; most are followers. Lin Yuan’s friend has been trading stocks with him for 30 years, buying the same stocks as Lin Yuan. He always takes profits after making some money and doesn’t listen to advice. As a result, he doesn’t earn much. Knowing that his skills are insufficient but still making decisions on his own without reflection is a major taboo in the stock market. Most followers need to learn the comprehensive thinking of successful investors, not just one or two aspects.
In April 2021, Lin Yuan achieved annualized returns of 44.45% and 24.75%, once again ranking first in the top 10 private equity fund managers for nearly 5 and 10 years respectively. His 32-year long-term investment returns surpass Buffett’s returns during the same period.
To summarize:
1. The earlier you start investing, the better.
2. Have a compound interest mindset—interest on interest.
3. Avoid detours; stay with the best companies.
Among these, the third point is the most difficult for most people to achieve:
Because
First, they cannot select good companies or quality stocks;
Second, they cannot hold long-term;
Third, they cannot hold large positions…